Posted on 02/08/2014 6:07:06 AM PST by Hojczyk
New Jersey’s shakedown tactics have spread. California, Massachusetts, New York, Pennsylvania, Illinois, Nebraska, and Virginia have been among the states named in congressional testimony for trying to levy corporate taxes on firms whose only substantial connection is a visiting truck.
In one typical case, when a small Milwaukee transportation firm, LTL Trucking, answered a Nebraska tax questionnaire by acknowledging that its trucks had driven through the state in recent years, it received a back-tax bill of $1,321, despite having no inventory, customers, or sales there.
Manufacturers delivering products to customers in locations where the firms don’t otherwise operate have found themselves similarly dunned. Monterey Boats, a company based in Williston, Florida, does only about 2 percent of its sales in Michigan, but this didn’t keep it from getting slammed with a $376,000 bill for Michigan’s gross-receipt tax in 2010.
In this instance, too, the firm had no ongoing physical presence in the taxing state. Some 20 states now claim the right to tax the income of an out-of-state business that merely ships products to customers in their state. “What’s particularly challenging—if not chaotic—is that states are imposing these business activity taxes inconsistently,” Monterey’s chief financial officer, Mark Ducharme, wrote in a 2012 opinion piece in the Tampa Bay Times. “Some states reach across their borders and some don’t.
Some businesses are targeted, others are not.” The tax grabs have become so outrageous that some states have threatened to retaliate against businesses in the tax-greedy states. Several years ago, Colorado’s legislature issued a resolution calling the state’s tax department to beef up enforcement against trucking firms from states that “unreasonably” go after Colorado businesses.
(Excerpt) Read more at city-journal.org ...
“Tax” Lock
Absolutely correct. Therefore if Congress legislates on it or the SCOTUS rules on it, they will completely get it bassackwards wrong as they always do.
The Sheriff of Nottingham had nothing on these scum.
The practice is very old.
Years ago, my little company was subject to periodic sales tax audits. Tennessee has a use tax that covers items purchased out of state. Paid invoices were audited to confirm payment of the use tax. It was my practice to wait for the audit rather than spin wheels trying to keep the tax paid from the many out of state vendors.
Tools and consumables were taxed. Materials used for production was not. It was easier to argue with the auditor than try to make all the decsions as they arose.
I received an e mail recently from Amazon. It listed all my purchases for the last year and advised the State of Tennessee had been notified. I’m looking for the auditor to come to collect the $12 in state use tax
Amazon settled with Tennessee by informing on customers
This is how pirates or caravan raiders on the Silk Road [the real one, not the interweb] operated.
“I received an e mail recently from Amazon. It listed all my purchases for the last year and advised the State of Tennessee had been notified. I’m looking for the auditor to come to collect the $12 in state use tax”
For that reason if you’ve made any out of state mail order, or ecommerce purchases, it is a good preventative measure to declare some amount of purchases and pay the use tax on your state income tax filing. A few years ago I received a letter from my state charging me taxes, interest and penalties on an item I purchased at a store in another state. The store was audited by its state’s tax authority. The tax authority then sent a list of the store’s out of state shipments to the state revenue bureaus of every other state. If you just declare an reasonable amount of out of state purchases (say $243), and pay the use tax, you’ll likely not be bothered even if your true purchases are much more.
In medieval Germany they were called Robber Barons.
Question 1) What was the value of the goods which your company transported through Nebraska in the previous calendar year?
Answer: "Gee, mister, our company is going under... We haven't sold any products in over two years. So, nothing, I guess..."
Question 2) Does your company make use of any infrastructure in the State of Nebraska?
Answer: "Great, there go the lights! I was wondering when the electric company would get around to cutting off our power. And we were only eight months in arrears on our electric bill. Say, could the State of Nebraska maybe grant us a small-business loan so we could at least pay our light bill?"
Question 3) How many road-miles of Nebraska State Highways did your vehicle fleet use last year?
Answer: "Twenty-nine, thirty, thirty-one, THIRTY-TWO! So, we have only three dollars and thirty-two cents left in assets. Nope, can't stop the repo company from repossessing all of our office furniture. I'm sorry: What was your question again?
Regards,
Yes, the one TRUE place where Congress has authority, but I inject one caveat that our ‘educated’ Congress can’t seem to grasp (ala 2nd A): ‘regulate’ = ‘make regular’, to standardize, NOT ‘rule over’
IE: I fear they will, again, read too much into the simple English of the Constitution to usurp ever more power and authority.
Tennessee has no income tax
“Tennessee has no income tax”
Understand.
Some left wing state rep in Texas tried to get the state legislature here to impose a state income tax. His opponent ran political ad after political ad with that message. The next year, he was history.
Ha...back in the 1990’s we got a tax bill from NY...for stock sale...we lived in Washington. ..threw it away...but imagine a lot of people would get scared and just pay up.
Well, the State of OR is taking 10% of my wifes retirement(she taught in OR for 20 years), and we don’t live in that state.
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