Category Archives: Taxation

Automatic Revocation of Exemption List

Source: Internal Revenue Service, Page Last Reviewed or Updated: June 10, 2011

The IRS has started publishing a list of organizations that have had their federal tax-exempt status automatically revoked for failing to file an annual information return or notice with the IRS for three consecutive years. The Automatic Revocation of Exemption List (Auto-Revocation List) is available in Adobe and Excel formats, and divided into separate lists by jurisdiction. The Auto-Revocation List provides the name, employer identification number (EIN), organization (subsection) code, last known address, effective date of revocation, and date on which the name was posted on IRS.gov.

ALEC: American Legislative Exchange Council – The Voice of Corporate Special Interests in State Legislatures

Source: People For the American Way Foundation, 2011

When state legislators across the nation introduce similar or identical bills designed to boost corporate power and profits, reduce workers rights, limit corporate accountability for pollution, or restrict voting by minorities, odds are good that the legislation was not written by a state lawmaker but by corporate lobbyists working through the American Legislative Exchange Council. ALEC is a one-stop shop for corporations looking to identify friendly state legislators and work with them to get special-interest legislation introduced. It’s win-win for corporations, their lobbyists, and right-wing legislators. But the big losers are citizens whose rights and interests are sold off to the highest bidder….

… ALEC’s major funders include Exxon Mobil, the Scaife family (Allegheny Foundation and the Scaife Family Foundation), the Coors family (Castle Rock Foundation), Charles Koch (Charles G. Koch Charitable Foundation and the Claude R. Lambe Charitable Foundation), the Bradley family (The Lynde and Harry Bradley Foundation) and the Olin family (John M. Olin Foundation). These organizations consistently finance right-wing think tanks and political groups.

Members of ALEC’s board represent major corporations such as Altria, AT&T, GlaxoSmithKline, Johnson & Johnson, Koch Industries, Kraft, PhRMA, Wal-Mart, Peabody Energy, and State Farm. Such corporations represent just a fraction of ALEC’s approximately three hundred corporate partners. According to the American Association for Justice, over eighty percent of ALEC’s finances come from corporate contributions….

…The Issues ALEC Lobbies For:
– Undercutting Health Care Reform: Pulling out all the stops to weaken the health care reform law.

– Corporate Power and Workers’ Rights: Curbing protections for workers while eliminating checks and regulations on corporations.

– Voter ID and Election LawsBoosting corporate clout by making it harder for young and low-income Americans to exercise their right to vote.

– Tax Policy: Encouraging tax cuts for the rich that exacerbate state budget problems.

– Private School Vouchers: Taking aim at public education by bolstering risky, wasteful, and ineffective private school voucher programs.

– Obstructing Environmental Protection: Using energy industry dollars to fight climate change policies and regulations on polluters.

Amazon.Com And The States Untapped Revenue Streams

Source: Sujit Canaga Retna, The Southern Office Of The Council Of State Governments, Fiscal Alert, May 2011

States continue to tussle with the fallout from the Great Recession, a downturn that caused cumulative budget shortfalls of nearly $550 billion during the 2009 through 2012 fiscal years. But even when the national economic recovery is more robust and states begin to experience a noticeable pickup in economic activity and revenues, they will have to contend with the structural flaw in their tax systems that largely prevents the collection of sales taxes on e-commerce purchases. This is because a 1992 U.S. Supreme Court ruling–Quill Corporation v. North Dakota–held that online retailers are required only to collect sales tax on a transaction if they have a physical presence in a the state of the purchasing customer.

In addition, the 1998 Internet Tax Freedom Act places a moratorium on any new taxes on e-commerce transactions, presenting another federal hurdle that states must overcome. For a number of years now, online-only retailers like Amazon, Overstock.com and diamond Internet retailer Blue Nile have resisted collecting sales taxes on behalf of state and local governments. The driving force behind this resistance is that applying a sales tax effectively raises the price of items, a move that would make the online retailer less competitive compared to a bricks-and-mortar store. While a permanent solution must involve federal legislation, states have not been sitting idly by awaiting that action.

Competitiveness of state and local business taxes on new investment: Ranking states by tax burden on new investment

Source: Robert Cline, Andrew Phillips, Ernst & Young LLP., April 2011

As states recover from the recent recession, legislators and policy-makers are focusing attention on state policies designed to retain and expand employment and attract new investment. State and local business tax policy is an important element of this policy discussion, and legislators want to know how a state’s current business tax system compares to other states considered to be competitors for jobs and investment.

This study provides a state-by-state comparison of the tax liabilities that new investments in selected industries or types of economic activities would incur in each state, taking into consideration state and local statutory tax provisions and the financial and economic characteristics of the new investments. The analysis focuses on capital investments in industries that have location choices, such as factories or headquarters, rather than those that are tied to a specific geography, such as retailers or hotels. The estimated tax burdens on selected investments are combined to provide an overall measure of the business tax competitiveness of each state.

Tax Evasion: The Real Costs

Source: David Callahan, Dēmos, April 15, 2011

Tax evasion will cost the U.S. government $305 billion in 2010 and has cost $3 trillion over the past decade. It is a major contributor to budget deficits and the accumulation of national debt since 2001. Tax evasion also costs state treasuries billions of dollars. Every tax filer will pay an extra $2,200 in 2010 to make up for the funds lost to tax cheating. Even modest success in reducing tax evasion would free up significant new resources for spending or deficit reduction. Yet last week’s budget deal nixed a proposal by the Obama Administration to strengthen the IRS’s enforcement capacity….Not everyone has an equal opportunity to cheat on his or her taxes. Employees who have income withheld have fewer options for tax evasion than people who are self-employed or have complex business or financial dealings. Likewise, large corporations with foreign subsidiaries and sophisticated accounting departments have more opportunities to cheat. In all, it is wealthier Americans who are most likely to cheat on their taxes.

Sales-Tax TIF for Cedar Rapids: Poor Solution to Big Need / Better Alternatives Exist for Financing Flood Protection

Source: Peter S. Fisner, IFP Policy Brief, March 30, 2011

Cedar Rapids Mayor Ron Corbett has come calling at the State Capitol seeking support for a plan to help his city recover from the devastating floods of 2008. He arrived with a plan that lawmakers have seen before from others — and approved with the promise that it was a one-time arrangement.

The proposal: a tax-increment financing plan using sales-tax revenues, known as a sales-tax TIF. (The city calls it a “Growth Reinvestment Initiative” or GRI.) This would permit diversion of sales-tax revenue from the state general fund to local projects, much as lawmakers permitted in 2005 for the Iowa Speedway project in Newton, but on a much larger scale. That arrangement was for a maximum of $12.5 million; the Cedar Rapids proposal would cost $200 million to $214 million over 20 years.

Simply put, the rest of Iowa would be paying for the cost of Cedar Rapids flood levee construction, to the tune of $14 million per year for 15 years

Reforming the U.S. Tax System

Source: Bob Carbaugh and Koushik Ghosh, Challenge, Volume 54, Number 2, March-April 2011
(subscription required)

From the abstract:
The suddenly enormous budget deficit has unleashed discussion of tax reform in the United States. The intricate web of deductions, credits, and various loopholes distorts incentives. But reforming the tax system could also enable the country to raise more tax revenue in economically efficient and socially just ways. The authors provide a primer about the available choices.

Unnecessary Austerity, Unnecessary Shutdown

Source: Chuck Collins, Alison Goldberg, Scott Klinger, Sam Pizzigati, Institute for Policy Studies, Program on Inequality and the Common Good, April 2011

From the summary:
This Tax Day report identifies two prime drivers behind our current budget “squeeze.”

One, we have indeed become wealthier than ever. But our wealth has become incredibly more concentrated at our economic summit. U.S. income is cascading disproportionately to the top.

Two, we are taxing the dollars that go to our ever-richer rich — and the corporations they own — at levels far below the tax rates that America levied just a few decades ago. We have, in effect, shifted our tax burden off the shoulders of those most able to bear it and away from those who disproportionately benefit from government investments the most.

These two factors — more dollars at the top, significantly lower taxes on these dollars — have unleashed a fiscal nightmare. Can we wake up in time to avoid the crippling austerity that so many of our political leaders insist we must accept?

State Government Tax Collections Summary Report: 2010

Source: Melissa Braybrooks, Julio Ruiz, Elizabeth Accetta, U.S. Census Bureau, Governments Division Briefs, G10-STC, March 2011

From the press release:
Income Tax Revenue Down 4 Percent, Corporate Tax Revenue Down 7 Percent

State government tax collections decreased $14.3 billion to $704.6 billion in fiscal year 2010, the U.S. Census Bureau reported today. There was a $65.8 billion decrease in 2009.

These new data come from the 2010 Annual Survey of State Government Tax Collections [PDF], which contains annual statistics on the fiscal year tax collections of all 50 state governments, including receipts from licenses and compulsory fees. Tax revenues also include related penalty and interest receipts of the governments.

Quarterly Summary of State and Local Government Tax Revenue: 2010 4th Quarter

Source: U.S. Census Bureau, G10-QTAX4, March 29, 2011

From the press release:
2010 4th Quarter Summary of State and Local Government Tax Revenue
Tax revenues grew in the fourth quarter, marking the fifth straight quarter of positive growth. Corporate income tax revenue, general sales tax revenue and individual income tax revenue increased, while property tax revenue declined. The decline in property tax revenue is the first decline since the first quarter of 2010.

This summary shows quarterly tax revenue data on property, sales, license, income and other taxes. Data are shown for individual state governments as well as national-level estimates of total state and local taxes, including 12-month calculations. This quarterly survey has been conducted continuously since 1962.