Archive for the ‘New Mexico’ Category

I’m Shocked to Find That People Move from High-Tax States to Low-Tax States

Sunday, June 3rd, 2012

Well, not really. This post by the Tax Foundation notes that New Yorkers are finding other states, such as Florida, far less taxing and are relocating there. The story references the New York Post; that newspaper ran a story noting that $20 billion of income migrated south.

Foundation analyst Nick Kasprak said taxes play a role in people’s decisions to relocate.

“You generally see people moving from higher-tax states to lower-tax states,” he said. “Certainly, taxes are one way that states compete with one another.”

Now, you know that, I know that, but do the people running California know that? Back in December I posted about how California has lost $48 billion of AGI (Adjusted Gross Income) from 1993 to 2008. In total, the Bronze Golden State lost just over 720,000 tax returns while losing that income. However, at the same time, California’s population increased by 5 million.

The conclusion is obvious: High income individuals have left and were replaced by low income individuals. People like me left the state and have gone to less taxing environments.

Another conclusion is equally obvious: California must make fundamental reforms to its taxation system. This is going to be horribly painful (especially if you are in a public employee union). Both the number of employees, what they do, what they’re paid, and what their benefits are, must all be cut–and cut substantially. Even the most golden of climates can turn ugly.

Bozo Preparer Gets Four Years

Tuesday, September 21st, 2010

When I last reported on this story, I noted that Gayle McIntyre only received 54 years the previous time she committed tax fraud. Luckily for her, that sentence was suspended. She didn’t learn from the past.

In January she was indicted on 23 new counts of tax fraud, identity theft, forgery, and other charges in Albuquerque. She pleaded guilty to 16 of those counts in April. She was sentenced today in Santa Fe to four years in prison, and five more years on probation.

Of course, when she was indicted in January she was on probation for five years. I am hopeful that she will learn from this mistake but I don’t want to set odds on that.

I Only Got 54 Years Last Time

Sunday, February 14th, 2010

We have yet another nominee for the Bozo Tax Offender of the Year award. Let’s head to Albuquerque, New Mexico. Back in 2005 Gayle McIntyre pleaded guilty to 36 counts of state tax fraud. She was sentenced to 54 years in prison, but the prison time was suspended; Ms. McIntyre instead received probation and had to make restitution of $127,000. Back in 2005 Ms. McIntyre told the judge, “Living is expensive.”

Let’s fast forward to last week. Ms. McIntyre made the news again, for all the wrong reasons. She’s being accused of 23 counts of tax fraud, forgery, and identity theft. Ms. McIntyre, who used to work for New Mexico’s state tax agency, allegedly filed seven phony tax returns for $7,400 in refunds last summer; she’s also accused of depositing one refund of $1,700 into her own bank account.

These are just allegations at this point; Ms. McIntyre’s trial is set for August 12th. But if you’ve committed tax fraud in the past, wouldn’t you realize that you’d be under special scrutiny? Judge Michael Vigil knows what could happen: “One year could be added to each of those counts because you’re a habitual [offender]…You’re looking at almost 100 years, if everything got stacked.”

Nexus, My Nexus, Where Have You Been?

Monday, January 9th, 2006

There are two concepts that tax accountants have trouble explaining to clients: basis and nexus. And this leads to two recent items that have as their basis nexus.

First, on December 31st, the New Mexico Supreme Court ruled that a corporation with no physical presence in New Mexico can be forced to pay New Mexico income tax. The case dealt with a subsidiary of Michigan based K-Mart. K-Mart put intellectual property into the subsidiary. The subsidiary had no physical presence in New Mexico. New Mexico claimed that the subsidiary was formed just to lower the corporate parent’s tax bill, and served no real business purpose; thus, the subsidiary must pay corporate income tax. (Also argued was whether New Mexico’s gross receipts tax applied to the subsidiary. The New Mexico Supreme Court held unanimously that it doesn’t.)

Now, this case is interesting, but it likely will not be the last word. I mean, do corporations really structure transactions to avoid taxes? And do states write their tax codes to force businesses to structure deals in bizarre ways just for tax purposes? Well, I should probably tone down my sarcasm….But really, until a case comes up where a corporation has no physical presence in a state, and that state attempts to force the corporation to file and pay that state’s corporate income tax, will I be worried about the impact on small companies.

Separately, Business Week recently commented about the coming of a uniform sales tax allowing all Internet transactions to be taxed. The Streamlined Sales Tax Project is a group of states working on a means for a uniform sales tax so that states can get around the famous Quill Corp v. North Dakota decision. Business Week believes that the streamlined sales tax will happen really soon.

I believe the reality, at least for Californians, is that we won’t see this for many years. Perhaps other states are working towards a streamlined tax, with few differences in rates. California, though, continues to pass sales tax rate changes for numerous special districts. Consider just Fresno County. Fresno County has one tax rate, while the City of Clovis has another. And both of those rates are different from anywhere else in the state. There are at least two sales tax increases on the June ballot in California. Thus, I don’t see sales tax uniformity coming any time soon to the Golden State.

News Story: Santa Fe New Mexican

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