The State Legislature just ended its 40 day session. There are some important tax changes that you should be aware of and follow up on.
Last year the Governor and Legislature appointed a special tax reform study group. One of the ideas was to find a way to lessen the State Income Tax or remove it completely. The current tax is 6% for most persons.
The Study Group looked at a variety of issues that would do so without changing the total amount of taxes collected. Here is what the Legislature did to try and move towards that goal but did not make it.
1) Internet shopping: From now on, or rather after the Governor signs the bill, you will be liable for taxes on purchases on items that you buy on the computer. Currently, it is estimated that up to one-third of retail purchase happen that way.
It is a big loss of sales tax revenue for the state and a loss for brick 'n' mortar stores. Some large chains (Wal-Mart, Target) have internet sales but you still have to pay the tax when you pick it up at the store.
From now on you are liable for purchases that come to your door from out-of-state vendors. How this will be enforced is still to be worked out.
This has been a hot issue for several years both on State and Federal radars. The arguments are significant and difficult for legislatures throughout the country to figure out. And, of course, special interests are right there bombarding them with studies, visits, letters and so on pushing one point or the other.
Auto Purchases: This is very complicated so much so that I cannot possibly distill it in these pages. In fact I watched a panel of long time legislative "watchers" who could not make sense of it.
If you are looking to buy an auto of any kind, new or used ("pre-owned") you had best get up to speed on this. You might first try www.gpb.org/lawmakers and go from there. Wait several weeks because it has to be signed and before that deciphered.
Big Businesses: They will no longer have to pay sales tax on energy used for manufacturing. The location of the new Caterpillar plant hinges on this and so do some other possible plants.
The change in auto fees still worries local officials. But, the State promised them that their "net" revenue will not be changed. Like everything else involving splits between the state and local governments, it will take a few years to find out just how this will work. We shall see.
There were some other bills that were hotly lobbied that ended up passed or dead. Most of these involved "social" issues. Legislators don't always like dealing with these kinds of things, but they are "wedge" issues for one party or the other.
The legislators did manage to get the main part of their work done in record time and that is the budget. Like local governments if they do nothing else the law requires all to have a budget enacted by a certain time.
Thanks for reading this,