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Tag: State taxes

  • Leaders push against proposed corporate tax hike in NYS | Long Island Business News

    THE BLUEPRINT:

    • Long Island officials unite to challenge a proposed corporate tax hike in New York State.

    • The plan could raise the corporate rate from 7.25% to 11.5%, matching New Jersey.

    • Leaders warn it could drive businesses and jobs out of New York.

    Long Island leaders have formed a business and political coalition to fight a proposed corporate tax increase in New York State that would raise the rate from 7.25 percent to 11.5 percent. The hike would harm the metropolitan region and beyond, local business leaders and elected officials said Monday.

    “This is bad for Nassau County, this is bad for Long Island, this is bad for the metropolitan region, and this is bad for New York State,” Bruce Blakeman, the Nassau County executive, told reporters at a news conference in Mineola on Monday. “We are going to fight very hard against it.

    “This tax increase on corporations will be passed along to consumers, and many businesses will say they’ve had enough in New York State,” Blakeman said. “They’ll leave, and they’ll take their jobs with them.”

    The coalition was formed just days after Zohran Mamdani, the New York City-mayor elect met with Kathy Hochul, the New York State governor, according to Politico. Mamdani ran on a platform to ease cost-of-living strains in the city and included no-cost daycare centers, publicly owned supermarkets and free city-bus service.

    To do that, the mayor-elect suggested raising income taxes on the top 1 percent of New Yorkers, as well as raising the corporate tax rate to 11.5 percent, which would put New York on par with New Jersey, according to published reports. The corporate tax hike, officials say, is under consideration by Hochul.

    Hochul said Monday that any tax increase would depend on what happens in Washington, D.C. in the coming months.

    The suggested corporate tax increase comes at a time when other states are ranked higher in terms of business competitiveness. North Carolina, Texas, Florida, Virgina and Ohio were ranked as some of the top states in the nation for business, according to a July report from CNBC. That study put New York at 23, and New Jersey at 30.

    At the current rate, a $5 million-revenue business pays $362,500 in New York and $805,000 in New York City, Nassau officials said. Under the proposal, corporations would pay $575,000 outside New York City and more than $1 million in the city – an increase that Nassau officials warn would drive businesses out of New York.

    “The business community here has been stressed, has been punched in the gut numerous times, and here’s another” proposed tax hike, said Matt Cohen, president and CEO of Long Island Association, the region’s largest business group.

    “We have an affordability crisis in this country, but nowhere is it more acute than here on Long Island,” Cohen said. “And when you’re driving out businesses, when you’re driving out jobs, that’ going to make it worse, not better.”

    Cohen said this path makes for a “less-friendly business environment,” adding that it wasn’t a Republican or a Democratic issue.

    “When you’re talking about increasing taxes, that’s the opposite of smart economic development, planning, smart business growth, and we need to band together because we all share the same objective,” Cohen said. “We want a strong economy. We want to create jobs, we want a more affordable place to live, but we can’t do that if we keep sending a message to the business community that they’re not welcome here.”

    Kyle Strober, executive director of the Association for a Better Long Island, said that the “proposed tax increase is potentially devastating to our region’s economy.

    “Long Island, whose economy is closely aligned with New York City, is already confronting multiple challenges,” he said. “Recent demographic trends reveal that such a tax increase extension will only serve to drive away additional businesses and high-income earners, who pay the majority of the state’s tax revenue.  When this occurs, the tax burden will be shifted to Long Island’s hard working middle class.  This tax proposal will mock any effort to make New York more affordable for our middle class, a long-stated goal of Albany leadership.”

    On Monday, Hochul pointed out at a press conference that her budget director has said that “things are better than we expected at this point because New York City businesses are doing well, and that is the generator of most of our revenues.”

    Still, she said, “we don’t have a clear line of sight to know what our challenges are going to be or are the challenges not as great as anticipated.”

    She added, “I don’t know what Washington is going to do. Are they going to try and jam us up for another $3 billion in Medicaid costs? This is the uncertainty which makes it challenging to do what we’re doing.”

    Hochul said her response about corporate taxes at this moment is vague “because we don’t have all the information.”

    Meanwhile, Blakeman said that if corporations leave the region because of rate hike, it would hurt local small businesses – the coffee shops, diners and others that serve these organizations.

    Blakeman said that lowering the corporate tax rate to 5 percent “would make us much more competitive throughout the United States.”


    Adina Genn

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  • Your home sale could trigger capital gains taxes. Here’s how to calculate your bill

    Your home sale could trigger capital gains taxes. Here’s how to calculate your bill

    Westend61 | Westend61 | Getty Images

    As home values climb, more Americans owe capital gains taxes when selling property. But knowing how to calculate your home’s profit could reduce your bill, experts say.

    Most Americans do not owe taxes for selling a primary residence because of a special tax break — known as the Section 121 exclusion — that shields up to $250,000 of profits for single filers and $500,000 for married couples filing together.

    However, more U.S. home sales profits now exceed these thresholds, according to an April report from real estate data firm CoreLogic. Nearly 8% of sales exceeded the $500,000 limit in 2023, up from roughly 3% in 2019, the report found.

    More from Personal Finance:
    More home sellers are paying capital gains taxes. Here’s how to reduce your bill
    Inflation is slowing. Here’s why prices still aren’t going down
    Fewer homeowners are remodeling, but demand is still ‘solid’

    There are strict IRS rules to qualify for the $250,000 or $500,000 exemptions. Any profit above those limits is subject to capital gains taxes, levied at 0%, 15% or 20%, based on your earnings.

    Capital gains brackets use “taxable income,” which is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

    Reduce capital gains by increasing ‘basis’

    “It is important to track your cost basis of the home,” which is your original purchase price plus closing costs from the purchase, according to Thomas Scanlon, a certified financial planner at Raymond James in Manchester, Connecticut.

    You can reduce your home sale profit by adding often-forgotten costs and fees to your basis, which minimizes your capital gains tax liability.

    For example, you can start by tacking on fees and closing costs from the purchase and sale of the home, according to the IRS. These may include:

    • Title fees
    • Charges for utility installation
    • Legal and recording fees
    • Surveys
    • Transfer taxes
    • Title insurance
    • Balances owed by the seller

    These could be small amounts individually but have a significant effect on the basis when tallied.

    The average closing cost nationwide is $4,243, according to a report from Assurance, but fees vary widely. In the priciest state, New York, the average is $8,039, while California is a close second at $8,028.

    “You also get credit for the expenses for the sale of the property,” added Scanlon, who is also a certified public accountant. That includes your real estate commissions and closing costs.

    However, there are some fees and closing costs you cannot add to your basis, such as home insurance premiums or rent or utilities paid before your closing date, according to the IRS.

    Similarly, loan charges such as points, mortgage insurance premiums, the cost to pull your credit report or appraisals required by your lender will not count.

    The ‘best way’ to reduce capital gains taxes

    You can further increase your home’s basis by tacking on the cost of eligible upgrades, experts say.

    “The best way to minimize the tax owed from selling a house is to maintain an accurate record of home improvements,” said CFP and enrolled agent Paul Fenner, founder and president of Tamma Capital in Commerce Township, Michigan.

    An improvement must “add to the value of your home, prolong its useful life or adopt it to new uses,” according to the IRS.

    For example, you can increase your basis with additions, outdoor or exterior upgrades, adding new systems, plumbing or built-in appliances.

    However, you cannot tack on repairs or maintenance needed to “keep your home in good condition,” such as fixing leaks, holes or cracks or replacing broken hardware, according to the IRS.

    Of course, you will need documentation for any improvements used to increase your home’s basis in case of a future IRS audit.

    If you do not have receipts, “at the very least, take pictures,” and gather any permits pulled for home projects, Scanlon from Raymond James said.

    Don’t miss these exclusives from CNBC PRO

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  • Why U.S. ports are getting a $21 billion upgrade

    Why U.S. ports are getting a $21 billion upgrade

    U.S. ports are receiving multimillion dollar grants to upgrade cargo handling infrastructure.

    The grants are part of the Biden administration’s $21 billion commitment to modernize port infrastructure in the U.S.

    Midsize port cities such as Baltimore are among the 2023 grant recipients. In November, the Port of Baltimore received a $47 million grant to kick-start an offshore wind manufacturing hub, among other improvements. For example, the funds will pay for a new berth, or dock, for rolling cargo. Baltimore is the top U.S. destination for rolling cargo imports, a category including farm machinery from John Deere and light-duty vehicles from BMW, according to the Maryland Port Administration.

    More than $653 million in Port Infrastructure Development Program grants were awarded to U.S. ports in 2023 by the U.S. Department of Transportation, Maritime Administration. Other projects receiving federal funds include the Port of Tacoma Husky Terminal Expansion in Washington state ($54.2 million), and the North Harbor Transportation System Improvement Project in Long Beach, California ($52.6 million).

    Port improvements are also coming from the Environmental Protection Agency, which offers funds to combat truck idling. The U.S. Department of Defense is deepening some waterways on the East Coast to welcome larger ships.

    Baltimore isn’t the only city with a growing port according to maritime economists. Experts say gateways along the U.S. southeast coast are moving more cargo as major points of entry clog up with truck traffic.

    “All of the ports on the East Coast are upgrading their infrastructure and capacity,” said Walter Kemmsies, managing partner at the Kemmsies Group, a maritime economics consulting firm currently working with the Port Authority of Georgia in Savannah. “What that does is it makes it more attractive to the ocean carriers. They like to be able to go in and out of a port very quickly, and they like to go to several ports.”

    Ports America formed a public-private partnership with the state of Maryland to manage equipment and operations in sections of the Port of Baltimore. The group told CNBC that $550 million in upgrades have gone into Seagirt Marine Terminal alone for densification of the container yard since the partnership began in 2010.

    These upgrades build on past plans to revive America’s declining industrial cities. In Baltimore, public officials are addressing bottlenecks along the supply chain beyond the Port. They believe that the Howard Street Tunnel expansion project will increase double-stack rail capacity out of Baltimore, which could help the companies working at the port move goods to and from points in the Midwest.

    Watch the video above to see more of the upgrades coming to the Port of Baltimore.

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  • Op-ed: Thinking of moving your primary residence to a tax-advantaged state? Take these steps

    Op-ed: Thinking of moving your primary residence to a tax-advantaged state? Take these steps

    Mireya Acierto | Photodisc | Getty Images

    It’s not unusual for wealthy taxpayers to relocate from high-tax states to low-tax states. There’s evidence in population trends: Texas and Florida — neither of which have a state income tax — were the states with the biggest population increases from 2020 to 2021, according to the latest U.S. Census Bureau data. Much of that growth is coming at the expense of higher-tax states such as California, New York and Illinois.

    These days, it is very common for wealthy families to own residences in more than one state, making relocation even easier. However, the reality is that any state that does have an income tax, and in which an individual owns a home, will have a vested interest in asserting that the residence in their state is that person’s domicile.

    In practical terms, having domicile in a state means that state can impose its respective income tax on all the income reflected on the individual’s federal income tax return, regardless of the source of that income. This is one of the principal reasons that many people consider relocating.

    More from Smart Tax Planning:

    Here’s a look at more tax-planning news.

    Potentially adding to the trend of such moves is a wave of states’ efforts to find new ways to tax the rich. These bills range from imposing a “wealth tax” on the intrinsic gains from stocks and securities and creating special income tax brackets targeting the rich to reducing exemptions on inheritance taxes.

    But before you call the moving van, understand that state taxation, including state income tax as well as state estate and inheritance taxes and potential wealth taxes, is only one factor to consider as you assess changing your domicile.

    Other areas to consider include rules that govern asset protection, trust administration, trustee selection and estate administration. Some who redomicile to a state with no income tax may find that they are paying the state in other ways, such as higher inheritance, property and/or fuel taxes.

    That’s why the state you choose as your domicile is such an important decision. That decision is even more challenging considering that states often have different rules defining what they consider domicile.

    Some use so-called “bright line” tests; for instance, a certain number of days in and out of the state. Others use a “preponderance of evidence” approach that considers where you vote, where your driver’s license is issued, where your advisors are located and numerous other factors.

    Tips for redomiciling ‘the right way’

    Since I personally redomiciled from Minnesota to Florida and have assisted many of my clients in doing the same, I am often asked about “the right way” to do it.

    The most important thing is to ensure, upon inspection, that you can demonstrate that the move is real and not just on paper. Simply getting a driver’s license or registering to vote in the new state will likely not be enough. Not surprisingly, states with high income taxes do not like to lose tax revenue from wealthy families and will very often audit taxpayers who say they’ve redomiciled.

    When I have a client who is serious about changing domiciles, we go through a checklist of the things they should do to prove they have severed the connection to their former state of residence. The more evidence you can produce to show that you are domiciled in, and not just a resident of, your new state, the better off you’ll be, even if it only seems to be supporting evidence. Items to consider include:

    • Buy or lease property. The first step in redomiciling should be to purchase or rent a residential home in the new domicile state. If the residence is a rental, the term of your lease should be for at least one year.
    • Log your travels. Make certain to spend at least 183 days per year outside your old home state. Limit return trips to your prior home and keep a record of where you spend your time when you are not in the new state.
    • Change your license and registration. Obtain a new driver’s license and register any automobiles or boats in the new state. If you keep any licenses from your prior home, make sure they reflect that you are a nonresident.
    • Register to vote. Register to vote in your new state. Write to the registrar of voters at your prior home, too. Mention your change of domicile and ask that you be removed from voting lists.
    • File a declaration of domicile. In some states, like Florida, it is possible and advisable to file a declaration of domicile in which you attest to the fact, under penalty of perjury, that your domicile is the new state.
    • Move bank accounts and safe deposit boxes. It’s hard to make the case for changing domiciles if all your financial holdings are in the old state.
    • Declare a change of address. Send notification of your change of address to family, friends, business associates, professional organizations, credit card companies, brokers, insurance companies and magazine subscription offices.
    • Establish a new home base. When you travel, try to return to the new state. When you make large purchases, make them in the new state. Keep your family heirlooms, furniture and keepsakes in the new state.
    • Change legal documents to reflect residency. Upon redomiciling, you must update your will and trust and estate documents. Make sure that these documents do not identify you as a resident of another state. Also make sure your federal tax returns indicate your new address.
    • Develop local affiliations. Join local organizations in the new state, such as clubs and religious groups, and participate in local charitable activities.
    • If it exists, apply for a homestead exemption. In some states, such as Florida, a homestead exemption will be counted against your real estate taxes.

    Each person has a unique tax situation. Please consult with your financial and tax professionals when considering a change in domicile.

    — By Paul J. Ayotte, founding partner and client advisor at Fidelis Capital

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  • IRS says many state rebates aren’t taxable at the federal level. Some may face filing struggle, tax pros warn

    IRS says many state rebates aren’t taxable at the federal level. Some may face filing struggle, tax pros warn

    The IRS on Friday issued federal tax guidance for millions of Americans who received state rebates or payments in 2022.

    The announcement came about a week after the agency had urged those taxpayers to hold off on filing while it determined if the funds are taxable on federal returns.

    “The IRS has determined that in the interest of sound tax administration and other factors, taxpayers in many states will not need to report these payments on their 2022 tax returns,” the agency said in a statement.

    The agency said taxpayers in California, Colorado, Connecticut, Delaware, Florida, Hawaii, Idaho, Illinois, Indiana, Maine, New Jersey, New Mexico, New York, Oregon, Pennsylvania and Rhode Island won’t need to report these payments on their federal tax returns. Some Alaska taxpayers may also avoid federal levies on certain payments.

    Taxpayers in Georgia, Massachusetts, South Carolina and Virginia may also skip federal tax reporting for some payments. But eligibility may hinge on factors from your previous tax filings.  

    More from Smart Tax Planning:

    Here’s a look at more tax-planning news.

    Californians may still face filing challenges

    “This is the right ruling by the IRS,” said Adam Markowitz, an enrolled agent and vice president at Luminary Tax Advisors in Windermere, Florida. “It’s unfair to punish taxpayers this late in the game if they were going to change anything.”

    However, he said there may be challenges for California taxpayers because the state already issued them 1099-MISC forms for payments of more than $600, which reported the state’s “Middle Class Tax Refund” as a taxable payment to the IRS.

    More than 16.5 million California taxpayers have received the payment, according to the state’s Franchise Tax Board. Overall, more than 31.6 million residents benefited including taxpayers and their dependents.

    “The state of California really did everyone a disservice by issuing 1099-MISC [forms],” said Dan Herron, a San Luis Obispo, California-based certified financial planner at Elemental Wealth Advisors. He is also a certified public accountant.

    If the state doesn’t amend and reissue those forms to the IRS, it may cause a mismatch when California taxpayers file their federal returns, he said.

    Typically, a mismatch between tax forms and returns triggers automated notices, which may delay refunds or require taxpayers to contact the IRS to resolve.

    “I don’t know how the IRS system is going to handle that,” Herron added.

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  • 9 States With No Income Tax: Everything To Know

    9 States With No Income Tax: Everything To Know

    Income tax can take a big bite out of your wallet and your business’s bottom line. But not every state in the union charges income tax. Some states, like Texas, have become well-known as business havens for budget-minded entrepreneurs partly because they don’t charge income tax.

    For comparison, here are the nine states with the highest income tax rates:

    1. California – 13.30%
    2. Hawaii – 11.00%
    3. New York – 10.90%
    4. New Jersey – 10.75%
    5. Oregon – 9.90%
    6. Minnesota – 9.85%
    7. Vermont – 8.75%
    8. Iowa – 8.53%
    9. Wisconsin – 7.65%

    This article will look at nine states with no income tax and explore everything taxpayers need to know about these tax-reduced territories.

    What is income tax?

    Income tax is a crucial source of revenue for state and federal governments worldwide. There are several types of income tax that you might have to pay depending on where you live.

    An individual income tax is levied on individuals’ wages, salaries or other income. States usually impose these.

    Corporate income taxes are levied against businesses and their income from business operations.

    Meanwhile, state and local income taxes are other forms of income tax that states have more power over. These are distinct from federal income taxes and subject to each state’s specific tax code. Some states, such as California, impose significant income taxes, while others levy no additional income tax.

    Related: States With the Lowest Corporate Income Tax Rates

    Why do some states charge income tax?

    Income tax is a very reliable source of income. People have to earn money to spend money, which means that levying an income tax provides local and federal governments with enough funding to build schools, maintain roads, pay law enforcement officers and fund all other types of government operations.

    Related: Plan Ahead to Avoid Tax Time Surprises

    Which U.S. states don’t have to pay taxes on income?

    Only some states charge income tax to their citizens.

    Nine states either don’t have an income tax or are set to phase out income tax shortly. These states are:

    • Alaska
    • Florida
    • Nevada
    • New Hampshire — technically, New Hampshire makes tax investment and interest income, but those taxes will be gone in 2023.
    • South Dakota
    • Tennessee
    • Texas
    • Washington State — note that Washington does charge income tax for investment income and capital gains taxes, but only for those who earn a certain amount of money.
    • Wyoming

    If you live in any of these states, you’ll take home more of your money from most sources of income, like your salaries and tips.

    Related: Taxes on Small Businesses Across the Globe, Mapped: See Where Rates Are High, Low — and Nonexistent

    Comparing states with no income tax

    Does that mean you should immediately pack your bags and try to move to one of the above states? Not necessarily. Keep reading to review each state with no income tax and compare them based on their total tax burden and other factors.

    Alaska

    Alaska is both a cheap and expensive place to live. For instance, it has no state income tax or sales tax. The total tax burden for Alaska is 5.10% — the lowest of all 50 states. On top of that, all Alaskan residents get an annual payment from the Alaska Permanent Fund Corp.

    Still, the cost of living in Alaska is higher than average because of its distance from manufacturing centers and the relative remoteness of its cities. So you can expect to pay more for things like groceries and gas.

    Florida

    Florida is a popular snowbird state thanks to its population of retirees and its warm temperatures. While the excise and sales taxes in Florida are higher than the national average, the total tax burden on Florida residents is 6.97%.

    It does have higher-than-average housing costs, but on the plus side, Florida is a relatively cheap state to live in if you want to go to school.

    Related: An Underwater Property in Florida Is Going for $43 Million. The Developer Calls It a ‘Unicorn.’

    Nevada

    Nevada’s total tax burden is 8.23%. Citizens don’t have to worry about income tax because there are high sales taxes on alcohol, gambling, purchasing groceries, buying clothes, casinos and hotels.

    New Hampshire

    Then there is New Hampshire. As mentioned above, New Hampshire doesn’t charge general income tax, but it does charge income taxes on certain things. The total tax burden for New Hampshire residents hovers at around 6.84%, which is relatively low compared to other states.

    New Hampshire is a relatively small state, and the cost of living can vary depending on where you live.

    South Dakota

    South Dakota has a total tax burden of 7.37% for its filers. Even though it doesn’t charge income tax, it does charge heavy taxes on things like cigarettes and alcohol.

    It also charges very high sales taxes and has higher than average property tax rates, making it costly to live here if you don’t have a good source of income.

    Tennessee

    Tennessee’s total tax burden on its residents is 5.74%. Due to legislation passed in 2016, Tennessee lowered taxes for unearned income for its citizens. But this only resulted in a higher sales tax rate and the overall highest beer tax rate for any state in the union, measuring in at $1.29 per gallon.

    Texas

    Texas has a total tax burden of 8.19%. Most of its taxes come from excise taxes and sales taxes because the residents hate the idea of income taxes. Note that sales taxes can be up to 8.25%in certain jurisdictions.

    Furthermore, property taxes in Texas are higher here than in most other states. Even with all that, there’s no denying that Texas has a relatively low tax burden compared to other conditions.

    Related: A Texas farmer offers Elon Musk 100 acres of land to move Twitter offices from California to Texas

    Washington

    Washington has a relatively young population and an average tax burden of 8.34%. Many residents pay high sales and excise taxes, and you’ll find that gasoline prices at the pump are also higher than average.

    Combine that with higher-than-average living costs and high housing costs, and it’s clear that Washington is not among the most affordable states, even if it doesn’t charge income tax (for most).

    Wyoming

    Lastly, Wyoming is a very unpopulated state. It charges a total tax burden of 6.14% on its citizens, which includes excise, sales, (some) income and property taxes.

    While Wyoming might be cheap, keep in mind that it’s only suitable for those who are fans of the frontier lifestyle. This empty state has little going on in terms of metropolitan areas or tourist attractions besides national parks.

    Should you move to a state with no income tax?

    Moving to a state with no income tax is an attractive prospect. No one likes getting a check from their work only to see what the government takes to pay for necessary services.

    While you might rationally understand the purpose of income taxes, you might instinctively feel despondent to see your hard-earned money taken away right as you get it.

    But while it can be tempting to move to a state with no income tax, you should consider the total tax burden each state levies on its residents before proceeding. You should also consider what each state has to offer.

    Related: 4 Effective Strategies to Reduce Your Income Taxes

    For example, many people move to California, which is widely understood to be one of the most expensive states to live in. Why? It’s a beautiful state, with lots to do and job opportunities, particularly in the entertainment and tech industries.

    Similar states, like New York, Hawaii or Minnesota, might have high federal income tax rates for all taxable income and additional taxes to boot but counteract that with low local sales tax rates.

    In contrast, Wyoming might place a low tax burden on its residents. But you must have a job in farming, ranching or mining. There isn’t much to see and do in Wyoming if you aren’t a fan of the great outdoors.

    Then you have to keep business taxes in mind. Self-employed individuals might find some states better than others regarding the final tax bill or their state sales tax brackets.

    Factors like healthcare, pensions and dividend income can make states like Alabama, New Jersey, Illinois and others throughout the United States attractive places to live and work.

    Therefore, don’t immediately pick one of these states and move just because it doesn’t have personal income tax on your earned income. Income taxes are valuable and vital for the government, and in many cases, they can help to fund some of the most enjoyable and profitable parts of state economies.

    What’s the bottom line on states with no income tax?

    There are plenty of states you can move to throughout the US without an income tax. These might be ideal states to move to in the future or states in which to start a business.

    But remember that these no-income tax states have advantages and disadvantages; consider the total tax burden imposed on you and future businesses in each state before setting out for “greener” pastures.

    Looking for more helpful articles to expand your financial knowledge? Check out Entrepreneur’s Money & Finance resources here.

    Entrepreneur Staff

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  • EU court sides with Fiat Chrysler in tax advantage case

    EU court sides with Fiat Chrysler in tax advantage case

    LUXEMBOURG — The European Union’s top court on Tuesday overturned a decision requiring automaker Fiat Chrysler to pay up to 30 million euros ($30 million) in back taxes to Luxembourg.

    The European Commission, the EU’s executive arm and anti-trust regulator, had determined in 2015 that a 2012 Luxembourg tax ruling favored Fiat companies in Europe and was incompatible with state aid rules in the 27-nation bloc.

    A European court ruled in the commission’s favor in 2019, ordering the automaker to return the tax break. Fiat Chrysler, which last year merged with France’s PSA Peugeot to form Stellantis, asked the higher court to set aside the order.

    The Court of Justice of the EU said Tuesday that the commission failed to take into account the typical tax laws in Luxembourg when it was determining whether the automaker got a tax advantage and that the EU’s General Court “committed an error of law” in upholding that approach three years ago.

    EU competition commissioner Margrethe Vestager tweeted that Tuesday’s ruling was a “big loss for tax fairness.”

    “The Commission is committed to continue using all the tools at its disposal to ensure that fair competition is not distorted in the Single Market through the grant by Member States of illegal tax breaks to multinational companies,” she said in a statement.

    It comes as countries in Europe and around the world are working to enshrine into law a global minimum tax deal that more than 130 nations signed on to last year, designed to create a more equal footing in attracting and keeping multinational companies.

    It aims to deter multinationals from stashing profits in countries where they pay little or no taxes — commonly known as tax havens.

    Stellantis is “pleased that the Court of Justice has confirmed our view that the Commission was wrong to consider our tax ruling to be unlawful state aid,” spokeswoman Valerie Gillot said.

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  • Mexican company to build $200M, 295-worker bakery in Georgia

    Mexican company to build $200M, 295-worker bakery in Georgia

    VALDOSTA, Ga. — A Mexican bakery will be turning out more bread in south Georgia, announcing a larger bakery to go with a smaller one that it’s already building.

    Mexico City-based Grupo Bimbo said Friday that it will spend $200 million on a new bakery in Valdosta and hire 295 workers.

    The company originally announced a $25 million bakery projected to hire 76 workers in 2021. That bakery is under construction and will start operating in December, said Andrea Schruijer, executive director of the Valdosta-Lowndes County Development Authority.

    The project announced Friday will begin work in December in the same industrial park and is expected to open in December 2025.

    The first bakery will make sandwich buns for restaurants across the Southeast. It’s unclear what the bakery announced Friday will make.

    Schruijer told the Valdosta Daily Times that workers’ wages will start between $19 and $25 an hour.

    The company will get an undisclosed amount of job training assistance from the state. Schruijer said local officials approved a 12-year graduated property tax break. She said she was unable to give a specific value for how much the city and county were forgoing in taxes.

    Grupo Bimbo will also qualify for a Georgia tax credit allowing it to annually deduct $3,500 per job from state income taxes, up to $5.2 million over five years, as long as workers make at least $31,300 a year. If Grupo Bimbo doesn’t owe that much income tax, it will be able to recover the rest of the credit from state income tax payments made by workers.

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  • Ex-Suns ticket executive gets 1 year in jail in fraud scheme

    Ex-Suns ticket executive gets 1 year in jail in fraud scheme

    PHOENIX — A former Phoenix Suns ticket office executive has been sentenced to one year in jail and three years of supervised probation in connection with a fraud scheme.

    The Arizona Attorney General’s Office said Jeffrey Allen Marcussen used his position with the team to sell unused Suns tickets on a third-party vendor site for his own profit.

    Marcussen, who worked for the NBA team for more than 15 years before his resignation, was found guilty of selling tickets for his own profit between August 2017 and February 2019.

    He was charged with one count of fraud schemes and artifices, one count of theft and two counts of false return in September 2020 and pleaded guilty in the case six months ago.

    Authorities said Marcussen received more than $458,000 from the tickets that were sold.

    They said he has fully repaid the Suns and paid the nearly $12,000 owed to the Arizona Department of Revenue for his 2017 and 2018 taxes.

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  • Maryland judge strikes down nation’s first digital ad tax

    Maryland judge strikes down nation’s first digital ad tax

    ANNAPOLIS, Md. — The nation’s first tax on digital advertising was struck down as unconstitutional by a Maryland judge on Monday. It’s a law that attorneys for Big Tech have contended unfairly targets companies like Facebook, Google and Amazon in a separate federal case against the same law.

    Judge Alison Asti of Anne Arundel County Circuit Court said the Maryland law violates the U.S. Constitution’s prohibition on state interference with interstate commerce. She also ruled that it violates the federal Internet Tax Freedom Act, which prohibits discrimination against electronic commerce.

    The state estimated the tax on digital advertising could raise about $250 million a year to help pay for a sweeping K-12 education measure to expand early childhood education, increase teacher salaries, boost college and career readiness and help struggling schools.

    Raquel Coombs, a spokesperson for Maryland Attorney General Brian Frosh, said the attorney general’s office is reviewing the decision to determine next steps. Comptroller Peter Franchot’s office also is reviewing the decision, said spokesperson Susan O’Brien.

    Verizon Media Inc. and Comcast challenged the law in the state’s court. The law also is being challenged in federal court by the U.S. Chamber of Commerce. Oral arguments in that case are scheduled for Nov. 29.

    The Maryland law’s fate in the courts is being closely watched by other states that have also weighed a similar tax for online ads.

    The law was enacted last year by the Maryland General Assembly, which is controlled by Democrats, over the veto of Republican Gov. Larry Hogan.

    The law would have taxed revenue that the affected companies make on digital advertisements shown in Maryland.

    The tax rate would have been 2.5% for businesses making more than $100 million in global gross annual revenue; 5% for companies making $1 billion or more; 7.5% for companies making $5 billion or more and 10% for companies making $15 billion or more.

    Republican lawmakers cheered the judge’s ruling on Monday as “a huge win for Maryland’s small businesses who rely on affordable digital advertising to market their services.”

    “This is a refreshing check on Maryland’s Democratic Supermajority who has no problem creating new, one-of-a-kind taxes that violate the First Amendment and tax Maryland’s job creators out of business,” said Sen. Bryan Simonaire, the Senate minority leader, and Sen. Justin Ready, the Senate minority whip, in a joint statement.

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  • Mississippi judge blocks private schools’ tax-funded grants

    Mississippi judge blocks private schools’ tax-funded grants

    JACKSON, Miss. — A Mississippi judge on Thursday blocked a state law that put $10 million of federal pandemic relief money into infrastructure grants for private schools.

    The ruling by Hinds County Chancery Judge Crystal Wise Martin is a victory for Parents for Public Schools. The nonprofit group sued to block the program, arguing that the funding gives private schools a competitive advantage over public schools.

    The lawsuit cites Section 208 of the Mississippi Constitution, which prohibits the use of public money for any school that is not “a free school.”

    “Any appropriation of public funds to be received by private schools adversely affects schools and their students,” Martin wrote. “Taxpayer funding for education is finite.”

    During this year’s legislative session, Mississippi’s Republican-controlled House and Senate made plans to spend most of the $1.8 billion the state is receiving from the federal government for pandemic relief.

    Republican Gov. Tate Reeves signed two bills in April. One created a grant program to help private schools pay for water, broadband and other infrastructure projects. The other allocated the $10 million of federal money for the program, starting July 1.

    The program allows grants of up to $100,000 to any in-state school that is a member of the Midsouth Association of Independent Schools and is accredited by a state, regional or national organization. Public schools cannot apply for the infrastructure grants.

    Legislators created a program to provide interest-free loans to public schools to improve buildings and other facilities, with money coming from the state. Those loans must be repaid within 10 years. The grants to private schools do not need to be repaid.

    Attorney General Lynn Fitch’s staff is reviewing the judge’s order and “evaluating next steps” of whether to appeal, chief of staff Michelle Williams said Thursday.

    The American Civil Liberties Union of Mississippi, the Mississippi Center for Justice and Democracy Forward filed the lawsuit June 15 on behalf of Parents for Public Schools, an advocacy group founded more than 30 years ago.

    Democracy Forward attorney Will Bardwell said in a statement that Martin’s ruling is “a victory for the Mississippi Constitution and every person who cares about public education in the state.”

    “When the state legislature violated the constitution by directing public money to private schools, it did more than merely continue Mississippi’s shameful history of undermining its children’s public schools. It broke the law, period,” Bardwell said. “Today’s ruling makes clear: No one, not even the Mississippi legislature, is above the law.”

    The private schools’ infrastructure grant program is overseen by the Mississippi Department of Finance and Administration. A spokeswoman for the agency said Thursday that no applications have been received and none of the money has been distributed.

    Martin noted that Mississippi’s public education system has been “chronically underfunded.” A 1997 state law established a complex funding formula called the Mississippi Adequate Education Program, which was designed to ensure schools receive enough money to meet midlevel academic standards. Legislators have fully funded the formula only two years.

    Martin noted that the same day she heard oral arguments in the case, Aug. 23, Jackson’s public Forest Hill High School had to dismiss early because of low water pressure. By Aug. 30, all of Jackson’s public schools had to go to online-only classes temporarily because problems in the city’s main water treatment plant caused most of Jackson to lose running water for a few days.

    “This court need only sit in Hinds County and take notice of current events to find that exclusive public infrastructure funding for private schools adversely affects public school students differently than the general public,” Martin wrote.

    ————

    Follow Emily Wagster Pettus on Twitter at http://twitter.com/EWagsterPettus.

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  • Newsom to call special legislative session over gas prices

    Newsom to call special legislative session over gas prices

    SACRAMENTO, Calif. — California Gov. Gavin Newsom said Friday he will call a special session of the state Legislature in December to pass a new tax on oil company profits to punish them for what he called “rank price gouging.”

    Gas prices soared across the nation this summer because of high inflation, Russia’s invasion of Ukraine and ongoing disruptions in the global supply chain.

    But while gas prices have recovered somewhat nationwide, they have continued to spike in California, hitting an average of $6.39 per gallon on Friday — $2.58 higher than the national average, according to AAA.

    California has the second-highest gas tax in the country and other environmental rules that increase the cost of fuel in the nation’s most populous state. Still, Newsom said there is “nothing to justify” a price difference of more than $2.50 per gallon between California’s gas and prices in other states.

    “It’s time to get serious. I’m sick of this,” Newsom said. “We’ve been too timid.”

    The oil industry has pointed to California’s environmental laws and regulations to explain why the state routinely has higher gas prices than the rest of the country. Kevin Slagle, vice president of the Western States Petroleum Association, said Newsom and state lawmakers should “take a hard look at decades of California energy policy” instead of proposing a new tax.

    “If this was anything other than a political stunt, the Governor wouldn’t wait two months and would call the special session now, before the election,” Slagle said. “This industry is ready right now to work on real solutions to energy costs and reliability — if that is what the Governor is truly interested in.”

    Several states chose to suspend their gas taxes this summer, including Maryland, New York and Georgia. Newsom and his fellow Democrats that control the state Legislature refused to do that, opting instead to send $9.5 billion in rebates to taxpayers — which began showing up in bank accounts this week.

    It’s unclear how the tax Newsom is proposing would work. Newsom said he is still working out the details with legislative leaders, but on Friday said he wants the money to be “returned to taxpayers,” possibly by using money from the tax to pay for more rebates.

    The state Legislature briefly considered a proposal earlier this year that would have imposed a “windfall profits tax” on oil companies’ gross receipts when the price of a gallon of gasoline was “abnormally high compared to the price of a barrel of oil.”

    That proposal would have required state regulators to determine the tax rate, making sure it recovered any oil companies’ profit margins that exceeded 30 cents per gallon. The money from the tax would then have been returned to taxpayers via rebates.

    Newsom did not comment on that proposal when it was introduced in March, and lawmakers quickly shelved it. It could, however, act as a blueprint for the new proposal being negotiated between Newsom and legislative leaders.

    The Legislature’s top two leaders — Senate President Pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon — said in a joint statement that lawmakers “will continue to examine all other options to help consumers.”

    “A solution that takes excessive profits out of the hands of oil corporations and puts money back into the hands of consumers deserves strong consideration by the Legislature,” they said. “We look forward to examining the Governor’s detailed proposal when we receive it.”

    California Republicans — who do not control enough seats to influence policy decisions in the Legislature — have called the tax “foolhardy.”

    “Who here thinks that another tax is going to bring down your gas prices? Is going to bring down any costs in this state? It’s not going to happen,” Assembly Republican Leader James Gallagher told reporters on Wednesday.

    Last month, regulators at the California Energy Commission wrote a letter to five oil refiners — Chevron, Marathon Petroleum, PBF Energy, Phillips 66 and Valero — demanding an explanation for why gas prices jumped 84 cents over a 10-day period even as oil prices fell. The commission wrote that the oil industry had “not provided an adequate and transparent explanation for this price spike, which is causing real economic hardship to millions of Californians.”

    On Friday, Scott Folwarkow, Valero’s vice president for state government affairs, responded that “California is the most expensive operating environment in the country and a very hostile regulatory environment for refining.” He said that has caused refineries to close and tightened supply because California requires refineries to produce a specific fuel blend.

    He declined to provide details about the company’s operations based on the same anti-trust concerns. But he said the company makes appropriate arrangements to source supply when some refineries are down for maintenance.

    Newsom dismissed those arguments, saying that still doesn’t account for a $2.50 difference between California’s gas prices and those in the rest of the country.

    “These guys are playing us for fools. They have for decades,” Newsom said.

    The California Legislature usually meets between January and August, where they consider bills on a variety of topics. The governor has the power to call a special legislative session at any time by issuing a proclamation. When convened in a special session, lawmakers can only consider the issues mentioned in that proclamation.

    The last time a California governor called a special legislative session was in 2015, when then-Gov. Jerry Brown asked lawmakers to pass bills about health care and transportation.

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  • Newsom to call special legislative session over gas prices

    Newsom to call special legislative session over gas prices

    SACRAMENTO, Calif. — California Gov. Gavin Newsom said Friday he will call a special session of the state Legislature in December to pass a new tax on oil company profits to punish them for what he called “rank price gouging.”

    Gas prices soared across the nation this summer because of high inflation, Russia’s invasion of Ukraine and ongoing disruptions in the global supply chain.

    But while gas prices have recovered somewhat nationwide, they have continued to spike in California, hitting an average of $6.39 per gallon on Friday — $2.58 higher than the national average, according to AAA.

    California has the second-highest gas tax in the country and other environmental rules that increase the cost of fuel in the nation’s most populous state. Still, Newsom said there is “nothing to justify” a price difference of more than $2.50 per gallon between California’s gas and prices in other states.

    “It’s time to get serious. I’m sick of this,” Newsom said. “We’ve been too timid.”

    The oil industry has pointed to California’s environmental laws and regulations to explain why the state routinely has higher gas prices than the rest of the country. Kevin Slagle, vice president of the Western States Petroleum Association, said Newsom and state lawmakers should “take a hard look at decades of California energy policy” instead of proposing a new tax.

    “If this was anything other than a political stunt, the Governor wouldn’t wait two months and would call the special session now, before the election,” Slagle said. “This industry is ready right now to work on real solutions to energy costs and reliability — if that is what the Governor is truly interested in.”

    Several states chose to suspend their gas taxes this summer, including Maryland, New York and Georgia. Newsom and his fellow Democrats that control the state Legislature refused to do that, opting instead to send $9.5 billion in rebates to taxpayers — which began showing up in bank accounts this week.

    It’s unclear how the tax Newsom is proposing would work. Newsom said he is still working out the details with legislative leaders, but on Friday said he wants the money to be “returned to taxpayers,” possibly by using money from the tax to pay for more rebates.

    The state Legislature briefly considered a proposal earlier this year that would have imposed a “windfall profits tax” on oil companies’ gross receipts when the price of a gallon of gasoline was “abnormally high compared to the price of a barrel of oil.”

    That proposal would have required state regulators to determine the tax rate, making sure it recovered any oil companies’ profit margins that exceeded 30 cents per gallon. The money from the tax would then have been returned to taxpayers via rebates.

    Newsom did not comment on that proposal when it was introduced in March, and lawmakers quickly shelved it. It could, however, act as a blueprint for the new proposal being negotiated between Newsom and legislative leaders.

    The Legislature’s top two leaders — Senate President Pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon — said in a joint statement that lawmakers “will continue to examine all other options to help consumers.”

    “A solution that takes excessive profits out of the hands of oil corporations and puts money back into the hands of consumers deserves strong consideration by the Legislature,” they said. “We look forward to examining the Governor’s detailed proposal when we receive it.”

    California Republicans — who do not control enough seats to influence policy decisions in the Legislature — have called the tax “foolhardy.”

    “Who here thinks that another tax is going to bring down your gas prices? Is going to bring down any costs in this state? It’s not going to happen,” Assembly Republican Leader James Gallagher told reporters on Wednesday.

    Last month, regulators at the California Energy Commission wrote a letter to five oil refiners — Chevron, Marathon Petroleum, PBF Energy, Phillips 66 and Valero — demanding an explanation for why gas prices jumped 84 cents over a 10-day period even as oil prices fell. The commission wrote that the oil industry had “not provided an adequate and transparent explanation for this price spike, which is causing real economic hardship to millions of Californians.”

    On Friday, Scott Folwarkow, Valero’s vice president for state government affairs, responded that “California is the most expensive operating environment in the country and a very hostile regulatory environment for refining.” He said that has caused refineries to close and tightened supply because California requires refineries to produce a specific fuel blend.

    He declined to provide details about the company’s operations based on the same anti-trust concerns. But he said the company makes appropriate arrangements to source supply when some refineries are down for maintenance.

    Newsom dismissed those arguments, saying that still doesn’t account for a $2.50 difference between California’s gas prices and those in the rest of the country.

    “These guys are playing us for fools. They have for decades,” Newsom said.

    The California Legislature usually meets between January and August, where they consider bills on a variety of topics. The governor has the power to call a special legislative session at any time by issuing a proclamation. When convened in a special session, lawmakers can only consider the issues mentioned in that proclamation.

    The last time a California governor called a special legislative session was in 2015, when then-Gov. Jerry Brown asked lawmakers to pass bills about health care and transportation.

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  • Newsom to call special legislative session over gas prices

    Newsom to call special legislative session over gas prices

    SACRAMENTO, Calif. — California Gov. Gavin Newsom said Friday he will call a special session of the state Legislature in December to pass a new tax on oil company profits to punish them for what he called “rank price gouging.”

    Gas prices soared across the nation this summer because of high inflation, Russia’s invasion of Ukraine and ongoing disruptions in the global supply chain.

    But while gas prices have recovered somewhat nationwide, they have continued to spike in California, hitting an average of $6.39 per gallon on Friday — $2.58 higher than the national average, according to AAA.

    California has the second-highest gas tax in the country and other environmental rules that increase the cost of fuel in the nation’s most populous state. Still, Newsom said there is “nothing to justify” a price difference of more than $2.50 per gallon between California’s gas and prices in other states.

    “It’s time to get serious. I’m sick of this,” Newsom said. “We’ve been too timid.”

    The oil industry has pointed to California’s environmental laws and regulations to explain why the state routinely has higher gas prices than the rest of the country. Kevin Slagle, vice president of the Western States Petroleum Association, said Newsom and state lawmakers should “take a hard look at decades of California energy policy” instead of proposing a new tax.

    “If this was anything other than a political stunt, the Governor wouldn’t wait two months and would call the special session now, before the election,” Slagle said. “This industry is ready right now to work on real solutions to energy costs and reliability — if that is what the Governor is truly interested in.”

    Several states chose to suspend their gas taxes this summer, including Maryland, New York and Georgia. Newsom and his fellow Democrats that control the state Legislature refused to do that, opting instead to send $9.5 billion in rebates to taxpayers — which began showing up in bank accounts this week.

    It’s unclear how the tax Newsom is proposing would work. Newsom said he is still working out the details with legislative leaders, but on Friday said he wants the money to be “returned to taxpayers,” possibly by using money from the tax to pay for more rebates.

    The state Legislature briefly considered a proposal earlier this year that would have imposed a “windfall profits tax” on oil companies’ gross receipts when the price of a gallon of gasoline was “abnormally high compared to the price of a barrel of oil.”

    That proposal would have required state regulators to determine the tax rate, making sure it recovered any oil companies’ profit margins that exceeded 30 cents per gallon. The money from the tax would then have been returned to taxpayers via rebates.

    Newsom did not comment on that proposal when it was introduced in March, and lawmakers quickly shelved it. It could, however, act as a blueprint for the new proposal being negotiated between Newsom and legislative leaders.

    The Legislature’s top two leaders — Senate President Pro Tempore Toni Atkins and Assembly Speaker Anthony Rendon — said in a joint statement that lawmakers “will continue to examine all other options to help consumers.”

    “A solution that takes excessive profits out of the hands of oil corporations and puts money back into the hands of consumers deserves strong consideration by the Legislature,” they said. “We look forward to examining the Governor’s detailed proposal when we receive it.”

    California Republicans — who do not control enough seats to influence policy decisions in the Legislature — have called the tax “foolhardy.”

    “Who here thinks that another tax is going to bring down your gas prices? Is going to bring down any costs in this state? It’s not going to happen,” Assembly Republican Leader James Gallagher told reporters on Wednesday.

    Last month, regulators at the California Energy Commission wrote a letter to five oil refiners — Chevron, Marathon Petroleum, PBF Energy, Phillips 66 and Valero — demanding an explanation for why gas prices jumped 84 cents over a 10-day period even as oil prices fell. The commission wrote that the oil industry had “not provided an adequate and transparent explanation for this price spike, which is causing real economic hardship to millions of Californians.”

    On Friday, Scott Folwarkow, Valero’s vice president for state government affairs, responded that “California is the most expensive operating environment in the country and a very hostile regulatory environment for refining.” He said that has caused refineries to close and tightened supply because California requires refineries to produce a specific fuel blend.

    He declined to provide details about the company’s operations based on the same anti-trust concerns. But he said the company makes appropriate arrangements to source supply when some refineries are down for maintenance.

    Newsom dismissed those arguments, saying that still doesn’t account for a $2.50 difference between California’s gas prices and those in the rest of the country.

    “These guys are playing us for fools. They have for decades,” Newsom said.

    The California Legislature usually meets between January and August, where they consider bills on a variety of topics. The governor has the power to call a special legislative session at any time by issuing a proclamation. When convened in a special session, lawmakers can only consider the issues mentioned in that proclamation.

    The last time a California governor called a special legislative session was in 2015, when then-Gov. Jerry Brown asked lawmakers to pass bills about health care and transportation.

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