Archive for the ‘Utah’ Category

2021 State Business Tax Climate Index: Bring Me the Usual Suspects!

Tuesday, November 3rd, 2020

Every year the Tax Foundation publishes its State Business Tax Climate Index. As they state, they look at how each state taxes, not on the how much. Per usual, the names at the top and the bottom haven’t changed much.

The top ten states are:

  1. Wyoming
  2. South Dakota
  3. Alaska
  4. Florida
  5. Montana
  6. New Hampshire
  7. Nevada
  8. Utah
  9. Indiana
  10. North Carolina

The bottom ten states:

41. Alabama
42. Louisiana
43. Vermont
44. Maryland
45. Arkansas
46. Minnesota
47. Connecticut
48. New York
49. California
50. New Jersey

This is what the Tax Foundation states about the bottom ten:

The states in the bottom 10 tend to have a number of afflictions in common: complex, nonneutral taxes with comparatively high rates. New Jersey, for example, is hampered by some of the highest property tax burdens in the country, has the second highest-rate corporate and individual income taxes in the country and a particularly aggressive treatment of international income, levies an inheritance tax, and maintains some of the nation’s worst-structured individual income taxes.

I deliberately waited until election day to make this post. Why? Because some states have ballot measures today that will impact their rankings. For example, Californians will vote on whether to have a “split-roll” property tax, where business properties would be assessed annually based on current value rather than only when a property is sold. California today ranks 14th in property tax; if this measure passes, the ranking will fall dramatically. Illinois votes today on changing their personal income tax from a flat-rate tax to a progressive system.

Nevada, my state, ranks seventh. It’s not that every tax is great in Nevada (we have a poor sales tax system and unemployment insurance taxes); however, we lack income taxes. (We do have a gross receipts tax, called the Commerce Tax, that large businesses must pay.)

Some states, like Utah and Indiana, have most taxes but they administer them neutrally, simply, and with relatively low rates. Contrast that with California, which has an awful income tax system, high rates, and ridiculous regulations.

Below is a map (from the Tax Foundation) of the United States with the rankings of each state. If you’re considering locating a business, it makes sense to look at taxes (and other factors, too); the Tax Foundation’s annual guide is a tremendous resource.

When You Move, Do the Little Things

Saturday, February 2nd, 2019

Something I tell my clients when they move is to do all the little things such as going to the DMV and getting a new driver’s license and re-registering your cars. Another thing that needs to be done is to register to vote in your new state (especially if you were registered in your old state).

A news story out of Salt Lake City highlights the issue. The Utah State Tax Commission is going after individuals who leave the Beehive State if they don’t ‘unregister’ to vote in Utah. (In theory, when you register to vote in your new state, the Registrar of Voters in your new state notifies your old state to remove you.) At least one individual who moved from Utah to Austin, Texas was assessed Utah tax when he was a resident of the Lone Star State. He’s fighting the assessment, and he does stand a good chance of winning. However, it’s a lot easier to not have to fight the battle so if you move, do all the little things.

Can We Kill the Death Master File?

Monday, November 26th, 2012

Years ago, having the Social Security Administration publish a “Death Master File” was probably necessary. This may have been the only manner for various government agencies and insurance companies to learn that individuals had passed on.

Today, though, the information should only be disseminated to those who need it. Insurance companies should be able to subscribe to the list (as well as government agencies). However, is there any reason why John and Jane Doe need to have access to the list?

Well, one reason the Does need access is to commit identity theft: Three Utah men are accused of using the Death Master File for just that purpose. The men then created fake documents from phony employers to obtain tax refunds. The refunds reportedly were on the small side ($1,046 to $2,624). In any case, the IRS discovered the scheme and the men are now facing numerous charges of false claims, wire fraud, and aggravated identity theft.

While these three alleged identity thieves were caught, many more are finding the US government a great source of revenue while ruining the lives of innocent taxpayers. (Jason Dinesen, an EA from Indianola, Iowa, has run a story about a woman who is dealing with identity theft related to her late husband. This is almost certainly another case which stems from the Death Master File.) Identity theft makes the lives of victims miserable for years and is far too easy a crime for the thieves to commit. Ending the sale of information from the Death Master File would be a nice start to combating identity theft.

Companions to ClubFed

Sunday, July 11th, 2010

After a hectic Sunday, there’s nothing like that old standby, the Escort Service, to lighten an evening. I reported on Companions earlier this year. The owners of this Salt Lake City club did quite well but somehow forgot to report all of their income on their tax return. When the unreported gross receipts total $1.2 million and the IRS finds out, ClubFed is in your future.

Jodi Hoskins was found guilty earlier this year. Last week she was sentenced. Besides restitution of over $736,000, she’ll spend two years at ClubFed. Her then husband, Roy Hoskins, was sentenced to five years at ClubFed earlier this year.

As usual, it’s a whole lot easier to just pay the tax in the first place…but that rarely occurs to Bozo tax offenders.

Taxing Strip Clubs: OK; Taxing Escort Services: No

Monday, November 23rd, 2009

Somehow, strip clubs and taxes seem to follow each other. Usually I report on strip club owners who somehow forget that cash income is just as taxable as any other income. Today, however, it’s time to head to Utah and look at the application of taxes on strip clubs and escort services.

Back in 2004 the Utah legislature voted to impose a 10% tax on strip clubs and escort services; the tax would fund sex offender treatment for some incarcerated sex offenders and fund the Utah Attorney General’s task force looking at crimes against children. The tax is imposed on businesses where there’s nudity for more than 30 days, and impact admissions, user fees, food and beverages, and Utah-produced merchandise that is sold in the businesses.

The tax was upheld on the strip clubs:

In this case, the tax is triggered by nudity, which the (U.S.) Supreme Court has specifically declared ‘is not an inherently expressive condition. We find nothing in the record before us — either (in) the tax’s legislative history or in the text of the tax itself — establishing that the tax was enacted with the predominant purpose of suppressing protected expression.

However, the tax was ruled unconstitutional as far as escort services. The statute doesn’t relate escort to nudity, and so it was ruled too broad:

The tax defines an ‘escort’ as anyone who accompanies another for compensated companionship…Therefore, according to the plain terms of the statute, individuals who are paid for providing care for the elderly as well as those who are paid as tour guides would fall within the definition of an ‘escort,’ and any person or business who employs them would be subject to the tax.

So good news for escort services, for now, but bad news for strip clubs. Unless the nudity vanishes—and that would, one assumes, defeat the purpose—Utah’s strip club tax is constitutional.