Kelly William Cobb
eTax Wrapped into Rhode Island Budget
The following is cross-posted at www.stopetaxes.com.
An etax on all goods purchased online has been roped into the Rhode Island House Budget and is slated for a vote tomorrow.
The "affiliate nexus tax" was previously under consideration by the House Finance Committee, who also drafts the state budget. At the time, Stop eTaxes reported that the Committee pegged the tax hike at roughly $100 million.
However, since including the etax in the state budget, the House Finance Committee Budget Report has downgraded the tax hike from $100 million to zero. This is likely the result of the tax being unconstitutional and thus unenforceable by the state.
In addition to leaving a law inviting costly legal challenge on the state's books, the etax inadvertently punishes in-state advertisers and other businesses. To circumvent federal interstate commerce law, it expands the definition of doing to business to include an out-of-state retailer that advertises through a Rhode Island based website. This means retailers could simply end advertising agreements with in-state advertisers to avoid paying the unconstitutional tax.
CLICK HERE NOW to write your Rhode Island legislator in opposition to the etax included in the budget package.
Click here for ATR's letter opposing the affiliate nexus tax. Also, click here for ATR's letter opposing the entire budget, which includes a massive 12% spending increase, as well as higher gas and capital gains taxes.
(photo by J. Stephen Conn)
New Jersey: Moving from Highest Tax Burden to...Higher-est Tax Burden
- Extending the 4% corporate tax surcharge that was set to expire at the end of June.
- A $350 million payroll tax hike that resulted from so many people collecting unemployment checks (probably the result of business taxes that dramatically stifle job creation).
- Raising the health insurance tax from 1% to 2.25%, which will also make health care most costly.
(photo by mtstradling)
Louisiana Legislature Pushing Internet Access Tax
The following is cross-posted on www.stopetaxes.com.
Last Thursday, the Louisiana House of Representatives approved a 15-cent per month tax on Louisianans’ internet access. While it sounds like a small sum, the bill (HB 569) is expected to generate $2.4 million a year beginning in 2010.
The tax hike also attempts to circumvent federal law. Under the Internet Tax Freedom Act, recently reauthorized in 2007, states are barred from adding any new taxes on internet access, which is precisely what HB 569 attempts to do. Calling the tax a “fee” to bypass this law is not only misleading, but would invite significant and costly legal challenge if adopted.
While proponents of the bill, such as Attorney General Buddy Caldwell and bill sponsor Rep. Mack "Bodi" White (R-Denham Springs), argue the money will go toward the commendable goal of fighting cybercrime, funding for investigations and prosecutions should come from existing budgets set for these priorities – not new taxes on Louisiana residents. Claiming that more revenue from another tax is necessary shows that this is the lowest – not the highest – priority.
The bill passed 81-9 in the House and now heads to the State Senate. Luckily for Louisianans, Gov. Bobby Jindal is expected to veto the measure if passed by the legislature.
Click here for a copy of ATR's letter to the Louisiana State Senate in opposition to the measure.
(photo by stevesheriw)
Tennessee eTax Stalls in Committee
The following is cross-posted on www.StopETaxes.com.
Good news for Tennessee taxpayers. A proposal to tax online purchases in Tennessee stalled today after the bill was pulled from committee consideration. One of at least seven "affiliate nexus tax" proposals around the states, the bill would tax all online sales by Tennesseans if the retailer advertised through an instate company, website, or blogger.
Instead of bringing the bill (HB 1947/SB 1741) before the House Finance, Ways, and Means committee, however, the measure was "taken off notice," meaning it is up to the bill sponsor to put it back on the committee's agenda.
While the "amazon tax" attempts to curb federal interstate commerce law that prevents states from forcing out-of-state retailers to collect sales tax, the Tennessee Department of Revenue (DOR) even admits in its fiscal note that the bill would likely not be sufficient to permit the state to collect taxes. Similar proposals in other states have been estimated to raise taxes by hundreds of millions of dollars. However, likely recognizing that the measure is currently undergoing significant legal challenge in New York, the DOR argued the amount of new revenue would be insignificant, as its enforcement is unconstitutional.
CLICK HERE NOW to write your legislator and ensure this onerous bill is not brought back up in committee.
Also, click here for ATR's letter of opposition to the House and Senate Finance, Ways, and Means Committees.
(photo by euthman)
eTax on Internet Purchases Pending in Rhode Island
This following is cross-posted on www.StopETaxes.com.
In addition to being a $100 million tax increase on Rhode Island consumers, House Bill 6164 would fly in the face of a supreme court ruling and the interstate commerce clause of the U.S. Constitution that bars states from requiring out-of-state retailers to collect a sales tax. The bill will also put Rhode Island at a competitive disadvantage with other states working to ensure that internet transactions remain tax free.
The House Finance Committee has decided to reevaluate the measure and held it for further study following their hearing, however it is likely that the measure will reemerge in the coming weeks.
Rhode Island residents, CLICK HERE NOW to write your state legislator in Rhode Island and tell them to oppose taxes on internet purchases!
Similar proposals were also under consideration in Minnesota and have been passed by the legislature in Hawaii. Click the following links for letters to Hawaii Gov. Linda Lingle and Minnesota Gov. Tim Pawlenty urging their opposition to the bills.
Also, see below for ATR's letter of opposition to the Rhode Island House Committee on Finance or click here for a PDF copy.
Urge Governor Quinn to Veto the Alcohol Tax
On Tuesday, ATR reported on the Illinois legislature's massive tax hike on alcohol, soft drinks, and candy. Now the bill containing $600 million in new annual taxes has landed on Governor Pat Quinn's desk. The backroom deal struck by legislators would raise the tax on distilled spirits by 90%, wine by 90%, and beer by 21%.
Gov. Quinn has rightly stated his reluctance to such tax increases on the hospitality industry, especially as the city vies to host the 1016 Summer Olympics. However, your help is needed to urge him to veto the bill.
Illinois residents, CLICK HERE NOW to write Gov. Quinn and urge him to veto HB 255.
See below for ATR's letter to the Governor requesting his veto of this onerous tax increase or click here for a PDF copy.
207 State House
Springfield, IL 62706
Wisconsin's Latest Round of Budget Fixes
Add Wisconsin's cell phone tax to the list of temporary tax hikes that are anything but temporary.
Earlier this year we reported on Governor Jim Doyle's proposed budget with $1.7 billion in higher taxes, as well as his "state economic stimulus bill" that amounted to $1.2 billion in tax hikes. Now, Doyle has announced further proposals to rectify the state's $6.6 billion overspending problem, including extending the tax on cell phones.
In 2003, the state created the cell phone tax to upgrade 911 response services. When the upgrade was done, it left a balance of $20 million in the state's coffers, which was slated to be returned back to consumers as a credit on their phone bill.
However, Gov. Doyle has now proposed extending the cell phone tax, raising it by 75-cents, and then making it applicable to all landlines as well. Oh, then he would then add another 56-cent tax to cell phones for the state's Universal Service Fund, which has nothing to do with cell phone usage. All told, the proposal amounts to a $100 million per year tax increase on cell phone users.
The latest round of budget fixes also includes raiding the $165 million hospital tax just passed in February. While the tax hike was originally sold as a way to provide increased care for medical assistance patients, it would now go toward fixing Governor Doyle's fiscal mismanagement.
The proposals are currently being considered by the Joint Committee on Finance, which is aiming to complete the FY2009-2011 budget by the end of the month.
CLICK HERE NOW to write the Governor and your state lawmakers urging them to oppose any new tax increases in the Wisconsin budget.
(photo by imdrugfree)
Shocker: Illinois Legislature Makes Backroom Deal to Raise Taxes
Surprise! The Illinois legislative leadership made an eleventh-hour deal to dramatically raise taxes on alcohol, soft drinks, and candy and shoved it through the legislature within two days. Ok, who really expected accountable government to return to the Prairie State after all?
To help fund a massive transportation spending package (HB 255, HB 312, HB 2400), a backroom deal was made between Senate President John Cullerton (D) and legislators to raise taxes by some $600 million per year. The tax amendment was proposed last week on the 20th and passed both chambers of the legislature by the 21st.
If signed by Gov. Pat Quinn (D), the tax on distilled spirits would rise by 90% to a staggering $8.55 per gallon. Similarly, the tax on wine would rise by 90% and the tax on beer by 25%. The amendment also sneekily restructured the tax code to reclassify the tax status of soft drinks and candy to raise even more money.
While all tax hikes are avoidable, the worst part is that these taxes were especially so. The revenue will be directed toward a $26 billion transportation infrastructure spending plan. However, as the legislature could have learned from their fellow Democrats in Chicago or from the neighboring state of Indiana, privatization projects for transporation could have fixed or built new infrastructure without raising taxes.
In 2005, Chicago leased the Chicago Skyway landing the city $1.8 billion in new funding and allowing them to pay off debt and use the money for other operating costs. Similarly, in 2006, the Indiana Toll Road was leased for an upfront payment of $3.8 billion. Privatization projects invest in infrastructure, create jobs, promote economic growth, and bring billions into the state’s coffers, all while avoiding unnecessary tax increases.
As the legislature considered the tax increase, Gov. Quinn rightly stated his hesitation to raise the alcohol tax. Don't get too excited though: the Governor is continuing to push for a 50% increase in the income tax.
Click here for a copy of ATR's letter to the legislature opposing the tax increase.
(photo by Vidiot)
Governor Tim Pawlenty: Hero of the Taxpayer
After the legislature proposed billions in higher taxes this year, Minnesota Governor Tim Pawlenty (R) announced yesterday that he will trim and balance the state's budget without raising taxes.
Earlier this week, the legislature finished passing a series of budget bills that authorized $34 billion in spending over the next year. However, in a glaring sign of fiscal irresponsibility, the legislature's budget overspends anticipated revenues by nearly $3 billion. Gov. Pawlenty, a signer of the Taxpayer Protection Pledge to oppose all tax increases, announced he would use a line item veto to balance the budget, while maintaining his commitment to veto any tax increases.
The Democratic-Farmer-Labor (DFL) led legislature has been pressing for numerous tax hikes since the beginning of the legislative session. The Senate proposed $2.2 billion in higher income taxes, while the House proposed $1.5 billion in higher taxes on resident and small business income, digital goods, cigarettes, and alcohol beverages, as well as eliminating a number of tax deductions.
Legislators recently approved a bill proposed by the Tax Omnibus Conference Committee that would raise $1 billion in higher taxes on income, alcohol beverages, and credit card companies. However, Gov. Pawlenty - maintaining his no-tax pledge - quickly vetoed the bill last week.
Below is ATR's press release commending Gov. Pawlenty or click here for a PDF version.
Hawaii: The Islands of Aloha...and Higher Taxes
Well, it's official. The "Islands of Aloha" just became the "Islands of...eh...I can probably find a better deal in Puerto Rico."
- SB 1111 increases hotel tax occupancy tax by 28%. This is an especially good idea given that Hawaii’s tourism industry is already suffering. What better way to continue to discourage tourists to spend their money in Hawaii than making accommodations more expensive?
- HB 1747 increases the top income rate to 11% - now the highest in the nation. This tax increase will be imposed on individuals and about 37,000 small-business owners in Hawaii, arguably the backbone of the Hawaiian economy.
- HB 1741 raises the tax on sales of property and second home purchases. Apparently, now is not the time to buy or sell in Hawaii.