Lunch Links: South Dakota Internet Tax Court Filings; Time for Nebraska Tax Reform; Sales Tax Holidays Coming Up

July 26, 2016

Today is July 26, the date in 1788 when New York became the eleventh state. New York has some pretty high taxes (top individual income tax rate of 8.82 percent, average sales tax rate of 8.49 percent, and the highest state-local tax burden. However, as late as 1946 the state income tax was just 3.5 percent, the corporate tax was 4.5 percent, and there was no sales tax (until 1965). In 2014, the state adopted a corporate tax overhaul that significantly reduced the complexity and burden of that tax.

Here are some interesting links I came across:

  • Who Pays Payroll Taxes?: My colleague John Olson gives a rundown. (Tax Foundation)
  • Dying Early Inheritance Tax Payments: Consumer advocates in Britain argue that 30,000 families overpaid inheritance taxes because the government is slow to enact higher thresholds for the tax. The new rules were announced in April 2015 but don’t go into effect until April 2017. (Daily Telegraph)
  • Sales Tax Holidays in 2016: Next weekend, many states will hold a sales tax holiday (see table). The number of states is down, though, with the latest news being Massachusetts dropping theirs. Sales tax holidays sound great but distract from real, permanent, and economic beneficial tax reform. There’s little economic growth effect because consumers mostly shift the timing of planned purchases, not buy more. (Tax Foundation)
  • South Dakota Internet Tax Court Filings: Defendants Wayfair, Overstock, and Newegg got the nexus case moved to federal court and have filed for summary judgment, citing the existing 1992 Quill precedent. Retailers, meanwhile, are trying to get the case back into state court. The lawsuit is over South Dakota’s new law collecting sales tax on Internet sales into the state. (State Tax Notes / Retail Industry Leaders Association)
  • Massachusetts Governor Opposes Airbnb Tax Proposal: A proposal to extend the state’s 15 percent hotel tax to short-term rentals, coupled with expanding the EITC from 23 percent to 28 percent, hit a roadblock when Gov. Charlie Baker (R) came out against it. Senate President Stan Rosenberg (D) says he hopes to find a compromise. (Boston Globe)
  • Time for Nebraska Tax Reform: Jim Vokal of the Platte Institute writes that Nebraskans pay more income and property tax than those in other states, and broadening bases while lowering rates can boost economic growth and diversification. (Lincoln Journal-Star)
  • Wisconsin’s Tax on Investment and Equipment: Nick Novak of the Wisconsin Associated Builders & Contractors criticizes the state’s personal property tax on business equipment, which besides the high rate also has inconsistent exemptions. (Daily Reporter)

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