So how creative is YOUR state?

[DonPriebe]

The Empire (state) Strikes Back

In addition to the much publicized effort to protect taxpayers from incompetent preparers by insisting that all commercial preparers pay a $100 registration fee, New York is saving money this year by ...

Not mailing out any tax forms.

Closing all walk-in tax service centers.

Eliminating toll-free tax help phone lines for out-of-state callers.

Not sending out 1099-G forms to recipients of NY refunds who itemized last year.

This last one is my personal favorite, since the NY 1099-G used to reflect only that portion of the refund which was due to overpayment. It did not include the portion of the refund attributed to refundable credits [and we have a lot of them] or sales tax adjustments. That math is now left to the preparer.

[Snaggletooth]

More NY Stuff

Don, looks like the IRS would have a huge problem with the way NY is issuing 1099-Gs. The taxing authorities rarely create a problem with each other "vertically" although they couldn't care less about other states. In fact, vertical authorities actually will "tag team" a taxpayer.

Driving home today I heard a blurb about one of the major internet vendors filing a lawsuit against NY because they were taxing internet sales out-of-state. Barely heard the blurb through the static and didn't catch the name of the seller. Maybe you can elaborate.

Much of what is exempt under sales tax law for internet sales ends up taxable under "use tax" anyway (if the strict letter-of-the-law is followed). Yet an internet sale from a vendor with no physical presence is entitled to an exemption according to two supreme court rulings ten years apart.

[S T]

Federal Requirement

Not sure, but isn't there a Federal Requirement that the State issue the 1099G for the refund that they issue? and then what about the 1099 G forms for State unemployment,etc.

California trying to collect on internet sales or purchases has been long standing - a lot of money will be spent to try to acquire the add'l sales tax revenue, it will be interesting to see the actual statistics a year or two from now if business' own up to the tax and pay it. Without actual records of purchases, not sure how California is going to pursue and collect.

I realize that States have to cut costs and raise revenues, but between California on the West coast and New York on the East Coast, aren't both of these States going to extremes

Sandy

[veritas]

Oregon Corporation registration

presently $50 dollars now $100 per year.

S-Corps and partnerships now pay a $150 minimum tax.

And for those evil people making too much, a new 11% individual tax rate.

All retroactive to 1-1-09.

[Snaggletooth]

Ultimate in Asheville NC

This topic spotlights the City of Asheville NC with a new low.

Lady backed into my car while I was parked at a seminar. Was honest enough to leave me a note with her name and address. After getting out of the seminar, called her back to the scene and also the Asheville police dept to write up an accident report.

Policeman appeared in about 20 minutes on a motorized scooter. (Not a bike mind you, but a skateboard with a 2-cycle engine) Writes out an accident report so the lady and I could give to insurance companies. Or so we thought.

Cop then finds a piece of scrap paper and gives to us with the case number. Then tells us to simply report the case number to insurance company. Insurance people are then supposed to call Asheville City Hall for details. He explains to us that Asheville no longer wishes to pay for duplicate stationary so that drivers can have a complete copy of an accident report. According to him, "Insurance companies are making all the money, we ain't. They can deal with this."

'Nuff said I suppose.

[AuditorTurnedGood]

Mn decided to confrom with Fed. rules

Which in this case meant dropping the M1NC (non-conformity) from last year's return, and simply sticking the laundry list of federal deductions you can't take on the MN return onto the usual M1M, additions and subtractions.

So they didn't actually adopt any changes, just changed the way in which you add them back. Maybe this year Drake will do it automatically (last year you had to force the MN AGI number).

Also, sales tax audits are through the roof, including use tax. And we cancelled MN/WI reciprocity, so for all the folks I see on I-94 eastbound in the morning, they'll be filing 2 returns from now on. The percentage of rent attributed to property taxes for the purpose of a property tax refund for renters was dropped from 19% to 15%, resulting in smaller refunds.

ATG

[BOB W]

I have always like the higher price tax software because they seem to include these weird situations within their program. Lets hope this continues with all these State issues. I use Ultra Tax (Creative Solutions).

[Nashville]

Good Point

Bob W, good point. Some of these measures being taken by Revenue-starved states have "last-gasp" mentality, and pull the rug out from undertaxpayers just before they file their taxes. These states know if they don't drop the bomb in Nov-Dec, they will have to go without this extra revenue for a whole year before the chance comes again.

I guess what you're saying is you have to question your confidence in whether software will be able to assimilate these changes. I don't think they will, not even the finest and most expensive such as Creative Solutions and Lacerte. In order to do this, these software companies would need a dedicated staff to track state legislation continually and turn-it-around in the software, and the cost of this would appear to me very prohibitive.

I have even endured a couple of state changes AFTER the state instruction booklets were printed, and numerous federal changes after Dec 31. I believe all tax software packages have updates during the tax season, but most of them are for bugs rather than new legislation.

[FEDUKE404]

Paying big bucks for tax software

I have always like the higher price tax software because they seem to include these weird situations within their program. Lets hope this continues with all these State issues. I use Ultra Tax (Creative Solutions).

Your point is accurate but the more ethereal costs normally are there for those "extras" and/or seldom-used forms that do not appear in the lower price versions. For instance: What happens if you need to fill out three Forms 1116 or you have a terribly messy AMT scenario??

Most states will not APPROVE the use of any tax software that "inaccurately" prepares certain tax situations, to include "communicating properly" with the federal numbers. Most of the aforementioned federal vs state issues should fall into that category.

(I liken it to whether buying a complete bells & whistles product such as Word Perfect is necessary when a far less expensive software product such as MSWord can meet the needs of most users.) And even further down the totem pole, there are some fairly useful word processor software programs that are free!

On a side note, I expect it likely that MANY state software packages (regardless of the cost) will be delayed in being released in January due to all the inherent confusion currently out there!

FE

[BOB W]

Since I already own UT all I can hope for is that the price will equal the product. I know in the past remarks stated on this board seem to indicate incomplete issues on low and moderate tax programs. I am no "wiz kid" and my output product depends on software that is acurate and complete. So I spend the extra bucks to be more than who I am.

[JohnH]

This topic spotlights the City of Asheville NC with a new low.

Lady backed into my car while I was parked at a seminar. Was honest enough to leave me a note with her name and address. After getting out of the seminar, called her back to the scene and also the Asheville police dept to write up an accident report.

Policeman appeared in about 20 minutes on a motorized scooter. (Not a bike mind you, but a skateboard with a 2-cycle engine) Writes out an accident report so the lady and I could give to insurance companies. Or so we thought.

Cop then finds a piece of scrap paper and gives to us with the case number. Then tells us to simply report the case number to insurance company. Insurance people are then supposed to call Asheville City Hall for details. He explains to us that Asheville no longer wishes to pay for duplicate stationary so that drivers can have a complete copy of an accident report. According to him, "Insurance companies are making all the money, we ain't. They can deal with this."

'Nuff said I suppose.

You're lucky you didn't have the type of conversation I had with a police officer a long time ago in ? (Alabama, I think, or maybe Mississippi). He took a look at my NC plates and the conversation began "You ain't from around these parts, are ya son?". Things kinda went downhill from there...

[Nashville]

Home Cookin'

(Alabama, I think, or maybe Mississippi).

John it was probably Tennessee, that glorious land who adorns its lofty crown in the Great Smoky Mountains and washes its gold-laden slippers in the waters of the Mighty Mississippi. The domain of well-manicured lawns and honest politicians.

Our official state welcome is "You ain't furm here, are ya" And the local police use it because they're too stupid to realize it is a redundancy. If you were "furm" here, they wouldn't have stopped you to begin with...

[Nashville]

Counter-Measures

So, for entertainment purposes and/or holiday venting, let us all know how creative your own state has become to resolve its financial woes via the back of the taxpayer with the tax return preparers getting caught in the swinging doors too!

How can the population respond when this happens, regardless of your state?

Nothing can be a more powerful tool than public knowledge. A public that tracks the voting records of their legislators, an ever-watchful press, grass-roots campaigns and dissemination of information. "The one thing no evil can withstand is the light of day on its activity..."

In particular is the stoppage of NEW taxes. If a tax does not exist, then it can't be raised.

Proponents of "new" taxes claim this just puts pressure on states to raise EXISTING taxes. You bet it does!! But the raising of existing taxes can place the taxing structure so far out of balance that it becomes counterproductive.

I raise the issue of the Oklahoma legislature raising the cigarette tax by $2.30/pk. in a single year. The statisticians figured how much revenue it would bring it. At an additional $23 per carton, two things happened: 1)Lots of people simply quit smoking, and 2)The heavy smokers bought their smokes from Indian Reservations, tax-free. You can't yawn in Oklahoma without bumping your head on an Indian Reservation - they're everywhere.

I must add to this the stoppage of new TEMPORARY taxes. There are very few instances of "temporary" taxes which have become rescinded, even those passed by a sunset provision. The overwhelming majority of these temporary taxes become permanent.

In vogue these days are the "voluntary" taxes. Poorly described, but these include the so-called "sin" taxes, such as taxes on alcohol, tobacco, and lottery tickets. If we have to have them, I pay very little on alcohol, zero on tobacco, and zero on lottery, so these may be popular with people like me.

So I would implore people wherever they are to become educated. We can't stop it, but we can vote them out if we know who they are. A more moderate position requires us to realize that it DOES cost money for a state to provide services, and we should be willing to understand accordingly. But when our household suffers a loss of revenue, we have no choice but to cut back, and governments should be willing to do the same.