Dear John, er, California

Posted on September 12, 2011 by Russ

Back when California passed the Amazon tax, I noted:

Additionally, it’s likely that large affiliates may relocate out of California to another state so that they can maintain their status. That will exacerbate the hit to California.

Well, while the California legislature and Amazon have struck a deal, other California companies are acting.

Savings.com CEO Thomas Swalla told SoCal Tech (right after the Amazon tax passed) that it would likely take them 60 days to evaluate the new law. Well, they’ve done so:

Dear California,

We’re terribly sorry to have to do this but we’re no longer a good match for each other. And trust us when we say it’s you, not us…we just can’t afford you anymore.

Ever since you and your new BFF–the Affiliate Nexus Tax–started hanging out, people just don’t want to do as much business with us anymore.

It’s unclear where Savings.com will end up; in the SoCal Tech article, their CEO speculated on moving to nearby Nevada. No matter, there will be 400 individuals not paying taxes to California, and one business entity not paying taxes to the state. Given that each paying job supports other jobs of other companies, this is a much bigger deal than you might realize.

Still, Democrats seem to have blinders on. Governor Brown still wants to pass tax increases (I kid you not). It’s time for California to cut taxes and regulations, or the state that was an entrepreneur’s haven in the last century will become a desert for entrepreneurs in this century.

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The TaxSlayer.com Bowl?

Posted on September 11, 2011 by Russ

I enjoy college football. Today, my school won a thrilling game in overtime.

Way back when, there were only a few college bowl games. And their names were simple: Rose, Sugar, Cotton, and Orange. The second tier games also had simple names: Blue-Bonnet, Fiesta, Peach, and Gator. Now, we’re treated to the [name your favorite sponsor]’s bowl. Well, TaxSlayer.com will now be the official sponsor of the Gator Bowl for the next three years.

TaxSlayer.com is what you’d expect from the name: income tax software. A partnership between a tax firm and a college bowl makes some sense; after all, income tax season follows the new year.

So on January 2nd, you and I will enjoy the TaxSlayer.com Gator Bowl in Jacksonville.

Hat Tip: Don’t Mess With Taxes

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California Collections Improve in August

Posted on September 11, 2011 by Russ

California revenues slightly surpassed budgeted amounts in August. Revenues were ahead of plan by $134.9 million. For the 2011-2012 fiscal year, revenues remain $403.8 million below estimates.

The good news, though is just slight. The budget counted on $4 billion of revenues that would magically appear. The chance of that happening is slight. Far more likely will be a revenue shortfall when the year is over.

Still, California politicians and state bureaucrats will take any good news. Now, if they could only use alchemy to make money….

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Amazon and California Legislators Strike a Deal

Posted on September 8, 2011 by Russ

Yesterday, Amazon.com and key California legislative leaders of both parties struck a deal. Assuming this deal passes the state legislature and is signed by Governor Brown, Amazon.com will begin collecting sales tax in California on September 12, 2012. However, if Congress were to pass a national law dealing with Internet retailers, that law would supersede this legislation.

Amazon has been trying to get a referendum qualified on the California ballot. That measure would put the new “Amazon Tax” up to a vote of the people (probably on the March/June presidential primary); if the referendum were to pass, the Amazon Tax would be a thing of the past.

From Amazon’s view, this measure gives them a year to operate without any legal worries, and a year to lobby Congress to pass a national measure. (Given that next year is a presidential election year, I’m not hopeful of anything substantive passing Congress.) For key Democrats, this deal gives the likely certainty of future revenues versus the strong possibility of the Amazon Tax heading into history via a probable referendum.

That said, Governor Brown has not stated his position on the measure. Should he veto the measure, it’s likely the referendum would move forward.

Posted in California, Sales Tax | Tagged | Comments Off on Amazon and California Legislators Strike a Deal

Snipes Loses Another Appeal

Posted on September 8, 2011 by Russ

The Eleventh Circuit Court of Appeals denied Wesley Snipes’ appeal of his convictions of willfully not filing tax returns. Mr. Snipes has about 26 months left on his three-year sentence.

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Four Pinocchios to President Obama

Posted on September 8, 2011 by Russ

At a Labor Day speech in Detroit, President Obama stated, “We said working folks deserved a break, so within one month of me taking office, we signed into law the biggest middle-class tax cut in history, putting more money into your pockets.” The Washington Post’s Glenn Kessler gave this quote “Four Pinocchios.” That means it’s a whopper of a lie, of course.

Peter Pappas has more.

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Same Old Song and Dance

Posted on September 6, 2011 by Russ

Governor Jerry Brown would like to increase taxes. That appears to be his message to voters. Voters have rejected several income tax increases over the past few years. It’s as if no one seems to care about the voters.

I bring this up because today is Labor Day (well, it’s still Labor Day on the West Coast as I write this). I saw today that Jimmy Hoffa, Jr. wants to “take those Tea Party Son of ****** out.” It’s nice to see that decorum still exists with organized labor. President Obama praised Mr. Hoffa, too.

I think the country could use some real hope and change, not a change back to the 1960s.

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Nonexistent Inspectors Lead to a Real Cell at ClubFed

Posted on September 6, 2011 by Russ

Jay Vincent was a standout player at Michigan State. He was part of the squad that featured Ervin “Magic” Johnson that won the NCAA Championship over Indiana State in 1979. Mr. Vincent played in the NBA with stops in Dallas, Washington, San Antonio, Denver, Philadelphia, and Los Angeles.

Unfortunately, Mr. Vincent’s occupation after the NBA appears to be on the dark side, so to speak. Mr. Vicnent operated a business that did home inspections on foreclosed properties. That would seem like a good business in this economy. Unfortunately, he forgot a necessary step: hiring home inspectors. But Mr. Vincent did take his customers’ payments, but they didn’t get anything in return. That’s fraud. Mr. Vincent also didn’t pay tax on the income from the fraud. He pleaded guilty earlier this year and was sentenced last week to 68 months at ClubFed on the fraud charge and 3 years on the tax fraud charge (to be served concurrently).

Mr. Vincent is also facing possible indictment on another alleged scam. In Indiana, Mr. Vincent advertised tryouts for an exhibition basketball team. The team apparently didn’t exist. His advertisements were allegedly paid for with bad checks. This doesn’t look good for Mr. Vincent

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I’m Shocked to Find that Record Tax Increases Impact Job Losses

Posted on September 1, 2011 by Russ

I hope you detected the sarcasm in the headline. The Illinois Policy Institute reports that following the record tax increase in Illinois, Illinois lost more jobs in July than any other state.

There’s a wonderful chart in the article:

You don’t even need to see the spot marked “Tax Hike Enacted” to know that something changed drastically. True, the economy has gotten worse, but taxes matter. That’s true in Springfield as well as Sacramento…but it’s a lesson that politicians keep forgetting.

Hat Tip: Mish’s Blog

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22 Years, But at Least He’ll be Away from his Wife and Mistress

Posted on August 30, 2011 by Russ

We’ve written about Thomas Parenteau before. His trial was straight out of a cheap novel: He was accused of tax fraud and money laundering while living in a 30,000 square foot mansion with his wife and his mistress. Last year, he was found guilty on 11 of 13 counts. Yesterday, Mr. Parenteau received 22 years at ClubFed for his crimes.

Joe Kristan and TaxDood have more.

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