Caroline Sayers

Wayward State: Kansas Governor Acts Alone to Impose Internet Sales Tax

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Posted by Caroline Sayers on Tuesday, August 20th, 2019, 11:20 AM PERMALINK

In a power move that will face legal challenges, Kansas Governor Laura Kelly had the state department of revenue issue a notice demanding any and all online sellers remit sales tax.

The notice says “any remote seller doing business with Kansas residents must register with the department and collect state and local sales taxes and forward the revenues to the state, starting Oct. 1.” It makes Kansas the owner of the most aggressive internet sales tax in the nation.

The Supreme Court’s decision in Wayfair vs. South Dakota outlined a series of requirements that the court felt made the law acceptable. These included a minimum sales or transaction threshold, specifically preventing states from going after small businesses and sellers that were doing very little business in a state. (Tax Foundation lays out the full “Wayfair Checklist” here).

Kansas has no such exemptions for small businesses, which should make Kelly's new tax unconstitutional. The great irony is that Governor Kelly cites the court case in her notice.

Americans for Tax Reform has warned that states would start pushing the boundaries on the court’s decision, once the door was opened for state governments to reach across their borders and grab money from taxpayers who cannot vote for them. As ATR stated in its amicus brief to the court:

“if this Court overturns Quill, retailers with no presence in a taxing state will face complex and costly collection obligations, the threat of expensive and intrusive audits from thousands of taxing jurisdictions, and potential retroactive tax assessments,”

Incredibly, Kelly vetoed legislation this session that would have followed the guidance of the Wayfair decision, instead falling back on a previously passed bill that was not legal under the previous Quill v North Dakota decision.

The Governor was not happy that the bills passed by the Republican-controlled legislature significantly cut taxes to try and make up for the new burdens created by a new online sales tax.

The aggressive nature of the Kansas mandate sets the state up to lose businesses, revenue, and face potential lawsuits. Diane Yetter, founder of the Sales Tax Institute, said, “I think they’re insane. I just think Kansas is setting itself up for a lawsuit — and embarrassment, truthfully.”

In fact, a lawyer from the firm that represented Wayfair in the famous Supreme Court case believes the Kansas notice is legally on thin ice if does not include some type of sales threshold. A number of Kansas lawmakers, as well as the Kansas Chamber of Commerce have also commented that they were concerned about the notice. Legislators have said they will likely be taking up the issue again next session.

Under the Governor’s unilaterally-imposed notice, Kansas is hurting its business-friendly tax environment. The state is risking driving away out-of-state online retailers, and creating compliance nightmares for individuals who sell to a Kansas resident.

This is not what the Supreme Court promised in its Wayfair decision. This could be the first example of a state abusing its new taxing power, with many more to come.

Photo Credit: Flickr

Expensive, Unnecessary Nuclear Bailout Must Be Avoided in PA

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Posted by Caroline Sayers on Friday, July 12th, 2019, 1:47 PM PERMALINK

Pennsylvania is currently home to one of the strongest energy markets in America, yet the state legislature has been considering legislation which would jeopardize the state’s future ability to stay competitive in the energy sector.

Luckily, plans to prop up two of Pennsylvania’s five nuclear plants with taxpayer dollars, have fallen on the back-burner.

The plan would update the Alternative Energy Portfolio to allow carbon-free energy producers, including nuclear plants, to gain access to more tax credits in order to further subsidize them. The state would add a category of zero-emission power reserved largely for nuclear producers to supply 50 percent of the state’s electricity demand. This intricate bailout request comes after nuclear plants were already subsidized to the tune of almost $10 million from taxpayers to cover “stranded costs”. 

It’s good the bill has sputtered, the bad news is the push is likely to be renewed in the fall, perhaps with different legislation. However, following Exelon’s announcement that Three Mile Island will close, pressure could be amped up to do something to save it.

Three Mile Island was the only plant out of five in the state that is not profitable, and the other four are projected to make more than $600 million in profit this year. Arguing for a bailout without Three Mile Island will be tougher going forward.

Though bill sponsors pegged the cost at $500 million, an independent analysis found that the plan will cost around $900 million a year. There is no end date, meaning ratepayers will pay more on their energy bills indefinitely, and the burden may increase over time.

Lawmakers will be putting other energy companies at a disadvantage. The state's natural gas industry and energy analysts say the bill will undermine the state’s competitive electricity market. The Industrial Energy Consumers of Pennsylvania and American Coalition for Clean Coal Electricity say that the bailout would force them to cut jobs.

The plan would be merely putting a band-aid on the larger issue. Public Utility Commissioner Andrew Place sent a memo to members of the state Senate stating that the proposal does more harm than good, stating:

“While human health and environmental quality; job creation and retention; and maintaining a robust tax, base are all cornerstone public policy goals, this bill, in its current form, is far from the least cost mechanism to achieve these goals.”

Other states that have enacted similar schemes are already facing legal challenges over taxpayers dealing with higher electricity prices, and these policies have added billions of dollars in costs for consumers.

Pennsylvania legislators should let this sleeping dog lie. 

Photo Credit: Flicker - Brad K.

Death and Death Taxes: Only Two things Certain in Maine

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Posted by Caroline Sayers on Monday, July 8th, 2019, 10:53 AM PERMALINK

While Maine Governor Janet Mills (D) recently enacted a regressive paper bag tax that will disproportionately harm low income households, it hasn’t been all bad news for Maine taxpayers this year. On Monday, June 17th the Maine House of Representatives voted down LD 420, legislation that would increase the state’s death tax by reducing the exemption level from $5.6 million to $2 million.

Governor Mills’ predecessor, Paul LePage, recognized the economic harm caused by the state death tax and also the fact that for all the damage done by the estate tax, it fails to generate significant revenue for state coffers:

“Mainers with significant liquid assets only need to change their residency to escape our oppressive estate tax,” then-Governor LePage said in 2016. “Our business owners and farmers, who have fixed assets in Maine, are the ones that retain their residency and whose families are burdened by the estate tax.”

State Estate Tax Inheritance Tax Map 2018

This rejection of a death tax hike is a particularly smart move considering Maine already ranks as the third highest state where retirees are leaving rapidly. In fact, the National Bureau of Economic Research found that states lose up to one-third of their estate taxes because people simply move to states without state level death taxes.  When wealthy residents leave, they also take their revenues with them. A Heritage Foundation study found that states with death taxes were losing out on revenue due to the amount of people fleeing the state. For example, Rhode Island’s death tax raised $341.4 million, but the state ended up losing $540 million in other taxes due to out-migration.

 Increasing the death tax would only further drive retirees from the state towards more tax-friendly states like Florida, Tennessee, and North Carolina. In addition to having much more hospitable winters, those three states boast no death tax at all.

The federal death tax rate is currently 40% for the top earners, with an exemption of up to $11.2 million, after the Tax Cuts and Jobs Act doubled the exemption, up from $5.6 million. Maine is one of only 14 states that impose a state death tax in addition to the federal estate tax. 

It wasn’t a great year for taxpayers in Maine, but the defeat of the proposed death tax hike in the Democratic-controlled Maine legislature demonstrates that even blue state lawmakers recognize the damage cause by death taxes.

Photo Credit: Julia Ess

Photo Credit: Tax Foundation

New Hampshire Democrats Want To Raise Taxes

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Posted by Caroline Sayers on Wednesday, June 26th, 2019, 2:08 PM PERMALINK

The New Hampshire legislature is expected to vote on the state budget later this this week. As its currently written, this budget would raise taxes on businesses, electronic cigarettes, and vaping products. 

New Hampshire’s historically low taxes have resulted in it having the lowest poverty rate, the third lowest unemployment rate, and one of the highest average incomes in the nation. As noted in the letter, tax increases will hinder the state’s future:

“If implemented, these provisions in the budget would impose massive tax hikes that would result in lower wages and fewer jobs. Indeed, scholarly research over the years has concluded between 75 percent and 100 percent of corporate taxes are born by workers.”

In addition, the budget would also impose new taxes on vapor products and electronic cigarettes. These products are a healthier alternative to traditional cigarettes, so imposing sin taxes on them would send the wrong message to adult smokers – that switching to vapor products is not encouraged by the state.

Americans for Tax Reform opposes the tax increases that are included in the state budget, and sent lawmakers a letter urging them to oppose these provisions. The full letter can be found here and is below:


Dear Members of the New Hampshire House of Representatives and Senate,

On behalf of Americans for Tax Reform (ATR) and our supporters across New Hampshire, I urge you to oppose the tax increases included in the state budget for fiscal years 2020 and 2021. If implemented, these tax hikes would inflict a great deal of harm on the hardworking individual taxpayers, families, and employers across the Granite State.

New Hampshire is almost one of the seven no income tax states – soon to be eight, as Tennessee is in the process of phasing out its Hall Tax – and one of the five states that do not impose state sales taxes. Unsurprisingly, these pro-growth policies have resulted in New Hampshire having the lowest poverty rate, the third lowest unemployment rate, and one of the highest average incomes in the nation.

The state budget undermines this success, however, by imposing considerable tax hikes on businesses, and electronic cigarettes and vapor products. Back in 2015, there was agreement that the corporate taxes imposed in New Hampshire were preventing further growth. To mitigate this issue, legislation was enacted that started phasing down the Business Profits Tax (BPT) rate, which was a whopping 8.2 percent that year, and the Business Enterprise tax (BET) rate, which was 0.72.

To build upon that success, the 2018-19 state budget instituted further reductions. The BPT was reduced from 7.9 percent to 7.7 percent in 2019 – this year – and will be reduced again to 7.5 percent in 2021. Similarly, the BET was reduced from 0.675 to 0.6 percent this year, and will be reduced again to 0.5 percent in 2021. That is, if lawmakers allow the law to be fully implemented.

The committee on conference’s budget, which fortunately does not include the 0.5 percent income tax and the 5 percent capital gains tax, would take the BPT rate back to 7.9 percent and the BET rate back to 0.675 percent, imposing a retroactive tax hike for 2019. In addition, it would also prevent the 2021 tax cuts from taking effect. Contrary to claims that the latter provision simply prevents a future tax cut, it is accurately described as a tax increase since, under current law, rate reductions are supposed to take effect.

If implemented, these provisions in the budget would impose massive tax hikes that would result in lower wages and fewer jobs. Indeed, scholarly research over the years has concluded between 75 percent and 100 percent of corporate taxes are borne by workers. Not owners, as proponents of big government often claim.

Adding insult to injury, the committee of conference’s budget would also impose taxes on vapor products and e-cigarettes. E-cigarettes and vapor products are at least 95 percent less harmful than traditional cigarettes according to Public Health England and the Royal College of Physicians. Subjecting these products to sin taxes works at cross purposes with the effort to reduce the harm associated with cigarette use. It also sends the wrong message to adult smokers – that switching to vapor products is not encouraged by the state.

Ranging from the Food and Drug Administration to government-funded public health agencies around the world, the public health community is embracing the harm-reducing potential of vapor products more and more by the day. In fact, the American Cancer Society has affirmed that “using current generation e-cigarettes is less harmful than smoking cigarettes.” These smoke-free alternatives to cigarettes are innovative and raising their price with needless tax hikes would not only send the wrong message to smokers, but would also harm businesses in New Hampshire.

ATR opposes the BPT and BET tax increases, as well as the new taxes on e- cigarettes and vapor products that are currently included in the state budget and urges lawmakers to vote NO on these provisions.


Grover G. Norquist

President, Americans for Tax Reform


Photo Credit: AlexiusHoratius

North Carolina Legislature Passes More Tax Relief for Taxpayers and Businesses

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Posted by Caroline Sayers on Wednesday, June 5th, 2019, 2:22 PM PERMALINK

The North Carolina Senate approved their budget last week and it includes significant tax relief for businesses, individuals, and families across the Tarheel state.

The Senate budget proposal is very similar to the one already passed in the House. Both reduce the corporate franchise tax by nearly a third and provide income tax relief by increasing the standard deduction. The reduced franchise tax is designed to favor North Carolina-based companies and discourage them from moving elsewhere.

Overall, the proposed tax cuts are predicted to save taxpayers and businesses in North Carolina about $250 million a year and encourages more businesses to move and stay in the state. These pro-growth cuts were aided by revenue collections that are beating projections by close to $640 million, the largest surplus North Carolina has experienced since the Great Recession.

"This budget continues those policies [tax cutting policies]," Berger, a Rockingham County Republican, said at a news conference. "Those are policies that have brought about North Carolina's success story."  

"Over the past decade North Carolina lawmakers have been able to generate repeated budget surpluses while providing billions of dollars in tax relief. How? By doing what their counterparts in Kansas and other states have failed to do, which is keep spending in check,” said Grover Norquist, president of Americans for Tax Reform. “I commend both the North Carolina House and Senate for approving new budgets that keeps growth in state spending in line with population growth and inflation.”

While the North Carolina Senate and House have passed budgets that include tax relief for the entire state, the proposals still faces an obstacle in the form of Democratic Governor Roy Cooper, who has promised to veto more tax relief. Because the Republicans cannot override a veto alone, the budget process still has a long fight before being able to provide real relief.

Photo Credit: North Carolina General Assembly

McAuliffe: Municipal Broadband Networks Plunge Cities into Debt

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Posted by Caroline Sayers on Wednesday, June 28th, 2017, 2:55 PM PERMALINK

Americans for Tax Reform’s Katie McAuliffe, the executive director of Digital Liberty and federal affairs manager, wrote an op-ed for the Hill on the false promise of 'municipal broadband' networks. McAuliffe found that while Americans may want faster internet, municipal broadband networks tend to be failures:

“The problem is – building and operating broadband networks is expensive and complex. They need to be rebuilt and updated almost continually to stay ahead of the breakneck pace of innovation in this space and the constantly spiraling demand for higher and higher speeds online.”

According to McAuliffe, most attempts to create municipal broadband networks results in horror stories, like “the failed iProvo network that cost the city $39 million to build but was ultimately sold to Google for $1 dollar are legion. Indeed, according to new data, over half of these municipal fiber systems fail to bring in enough revenue to cover their ongoing operating costs, bleeding red ink every day they operate and falling further and further into debt.”

These municipalities struggle to keep up with large private companies that can easily invest millions in maintaining the infrastructure for the broadband. Of the 20 municipalities that have tried to implement broadband networks, “only two bring in enough revenue to recover construction costs before the networks become obsolete in 40 years. The rest won’t be paid off for decades after they become useless – or even centuries!”

These risky investments seem troubling at a time when most governments are scrambling to fund more necessary projects, like education and transportation. 

Read more here

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PA Gov. Wants to Bring Back the “Tech Tax”

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Posted by Caroline Sayers on Thursday, June 22nd, 2017, 4:11 PM PERMALINK

Governor Tom Wolf wants to bring back the job-killing “tech tax.”

In more detail, this proposal – included in his 2017-2018 budget – would eliminate the sales and use tax exemptions in place for computer services and other industries, extending the 6 percent state rate and various local rates to data processing, hosting, and related services; custom computer programming services; computer system design services; and computer facilities management services.

Gov. Wolf’s proposed “tech tax” would not only put Pennsylvania in the same outlier category as the four states that currently tax such services, it would also make the Keystone State’s the most burdensome. Estimated to bring in about $349 million each year, the Governor Wolf’s “tech tax” would inflict a great deal of harm on taxpayers, consumers, and the state economy.

Pennsylvania has become a hub for technology businesses thanks, in large part, to its repeal of a similar “tech tax” six years ago through bipartisan effort. The Pittsburgh Technology Council found that 302,535 individuals in southwestern Pennsylvania are employed in the tech industry, making up 24 percent of the area’s workforce. But bringing back the “tech tax,” however, would put this sector of Pennsylvania’s economy at risk.

If the “tech tax” were brought back, businesses in Pennsylvania may be forced to offset the associated compliance costs by cutting wages, laying off employees or even moving to other states (Relocation is not hard for tech companies because they often have mobile business models). In that vein, the “tech tax” would also push business owners and selectors looking for a new place to launch or expand their operations away from Pennsylvania, as it suggests that lawmakers in the state care more about new ways to burden them with taxes than actually helping them grow. 

Along with chilling business growth and investment, the “tech tax” would have more immediate negative consequences in store for the people of Pennsylvania, as business would likely push at least part of the financial burden onto consumers.

Gov. Wolf’s tech tax would stifle a vibrant part of Pennsylvania’s economy. Overall, the tax would be detrimental to the people and businesses of Pennsylvania. If the legislators really care about their constituents they will reject this tech tax and prove that Pennsylvania is both pro-business and pro-growth. 

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In Ukraine, Former Communist Statue Site May Be Replaced By Reagan Monument

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Posted by Caroline Sayers on Tuesday, June 13th, 2017, 4:00 PM PERMALINK

The Ukrainian Economic Freedoms Foundation has started the formal process of getting a permit to construct a monument to Ronald Reagan in the center of the capital, Kyiv. If approved, the Reagan monument would be placed on the former site of a statue of Communist criminal Dmytro Manuilsky. The statue was destroyed in 2014 during the Revolution of Dignity.

"Ukrainian Economic Freedoms Foundation is looking to get permit to build a monument to Ronald Reagan in the Kyiv city center, on the place where the statue of former communist leader stood up until it was demolished during the 2014 Revolution of Dignity,” said Maryan Zablotskyy, President of the Ukrainian Economic Freedoms Foundation. “This is to underline the great impact Reagan had on the destruction of Communism. Reagan met Ukrainian diaspora and proclaimed: ‘your struggle is our struggle’. And we are forever thankful for that. Ukraine now has special laws in place that forbid the use of any communist regalia and symbols. We think this victory over totalitarianism should be polished with a monument to Reagan, who led the anti-communist movement globally. We have so far developed a concept of the monument with the help of locally known architect Kostyantyn Skrytytsky and will be going through necessary public debates and permit procedure.” 

Since 2011, 11 monuments to Reagan have been built across Eastern Europe, such as in SofiaBudapest, and Tbilisi. There are currently 150 domestic dedications in 32 states and the District of Columbia, and 17 international dedications in nine countries.

The Ronald Reagan Legacy Project, founded by Grover Norquist, endorsed the project in a letter to the UEFF.

Placing the statue in the same location where the statue of the prominent leader of Communist party of Ukraine once was will serve as a reminder to Ukrainians of their unwavering independence. Zablotskyy has put the petition on the official website of the Kyiv City State Administration to demonstrate support of the Reagan statue. This petition gathered over 1,000 signatures in 90 days.

The site of the proposed Reagan monument is located at the intersection of Str. Lypska and Instytytska, right next to Parliament and government buildings. At the other side of street is a monument to the author of first Ukrainian constitution.

“So far we have developed a draft concept of the monument. The monument will represent a larger composition, which includes elevation to step up to Reagan,” said Zablotskyy. “This underlines the importance of Reagan. The height of statue itself is 2.4 meters (7 feet, 10 inches). Thus visitors will be able to go up a few steps, shake Reagan’s hand and take a photo while being slightly smaller in size compared to Reagan. Behind Reagan will be a small wall which will feature his quotes about Ukraine and Ukrainian diaspora, for example: ‘Your struggle is our struggle.’

Also this wall will have broken and melted symbols of USSR. Elements of the Berlin Wall will be used in construction.”

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Ohio Legislatures Work Hard on Budget and Help Taxpayers Save Big

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Posted by Caroline Sayers on Tuesday, May 30th, 2017, 2:11 PM PERMALINK

With the end of the current fiscal year one month away, the Ohio House and Senate continue working to finalize a new budget that avoids increasing costs to taxpayers. The House budget (HB 49), passed on May 2, and spends $123 billion in state and federal and funds over the next two years, while avoiding the tax increases proposed by Gov. John Kasich earlier in the year.  HB 49 will have its first hearing in the Senate today.

In addition to ongoing budget negotiations, Ohio lawmakers have another opportunity to save taxpayers money by approving pending legislation, HB 121 and SB 95 that would lift protectionist local laws that restrict competition in the piping materials that can be used in water infrastructure projects. 

HB 121 & SB 95, if passed, would allow more competition by lowering the price of materials and increasing flexibility. In localities where competition is restricted, the American Chemistry Council found that municipalities pay between 32% and 35% more for materials. Passing state legislation to ensure open competition for water infrastructure projects could save taxpayers nearly $100,000 per mile of pipe.

Ohio localities with closed competition laws mandate the use of piping materials that are both more costly to taxpayers, are more corrosive, and have shorter lifespans. State preemption of closed competition laws will allow aging water infrastructure to be replaced at less cost to taxpayer. Ohio legislators have the opportunity in the coming weeks to save taxpayer dollars by both passing a budget that does not included tax increases, and by approving HB 121/SB 95.

ATR sent the following letter to Ohio legislators in support of HB 121/SB 95;

Dear Members of the Ohio Legislature,

On behalf of Americans for Tax Reform (ATR) and our supporters across Ohio, I urge you to support House Bill 121 and Senate Bill 95, legislation that would enable Ohio to rebuild its aging water infrastructure while reducing costs to taxpayers through open competition.

Arcane laws and procurement codes in many localities across the country, including Ohio, require water infrastructure to be made of pre-specified piping materials without considering project specifics, this prohibits the use of other materials that are less costly and just as, if not more, effective. This is classic protectionism. It’s another example of the government setting policy that picks industry winners and losers.

In this case, the big losers from local closed competition statutes for water infrastructure are taxpayers, who are forced to pay the heightened costs of lower-performing piping materials whose use is mandated under local law. HB 121 and SB 95 will fix this problem by opening competition to all piping materials, which will yield taxpayer savings.

HB 121 and SB 95 is a free market, pro-taxpayer reform that deserves your support. ATR will be educating your constituents and all Ohio taxpayers as to how lawmakers in Columbus vote on HB 121, and other important fiscal and economic matters throughout the legislative session. Please look to ATR to as a resource on tax, budget, and other policy matters pending before you. If you have any questions, please contact Patrick Gleason, ATR director of state affairs, at (202) 785-0266 or


Grover G. Norquist 


Americans for Tax Reform

Photo Credit: Jim Bowen

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