Tag: State tax policy

In Order to Avoid Sales Tax on Food in Wyoming It’s Best to Refuse Napkins, Resist the Urge to Heat Pastries

Today over the Tax Foundation’s Tax Policy Blog, we get a little taste of how fun defining something like “food” can be. Now, if you’re like some people we know, there is lots of stuff at the grocery that definitely should not be consumed by human beings but in order to avoid raucous debate, it gets the food label. Wyoming is one of the 37 states that partially or wholly exempt groceries from sales tax but just because something is a grocery store, that doesn’t necessarily mean it won’t be taxed. Sigh.

Under Wyoming’s new law, food is defined as “substances whether in liquid, concentrated, solid, frozen, dried, or dehydrated form that are sold for ingestion or chewing by humans and are consumed for their taste or nutritional value.” This does not include booze, tobacco or “prepared foods.” And yes, exactly what items are included in “prepared foods” is where things get a little confusing.

What is a prepared food? Here’s how the new law defines it:

• Food sold in a heated state or heated by the seller; or

• Two or more food ingredients mixed or combined by the seller for sale as a single item; or

• Food sold with eating utensils provided by the seller including plates, knives, forks, spoons, glasses, cups, napkins, or straws. A container or package used to transport the food is not an eating utensil.

”Prepared food” does not include:

• Food that is only cut, repackaged, or pasteurized by the seller;

• Eggs, fish, meat, poultry, or foods containing raw animal foods and which are required or recommended to be cooked by the consumer to prevent food-borne illness;

• Food sold by a seller whose proper primary North American Industry Classification System (NAICS) classification is manufacturing in sector 311, except subsector 3118 dealing with bakeries; [Ed. note: This is my personal favorite]

• Food sold in an unheated state by weight or volume as a single item; or

• Bakery items including bread, rolls, buns, biscuits, bagels, croissants, pastries, donuts, danishes, cakes, tortes, pies, tarts, muffins, bars, cookies, tortillas, and other bakery goods unless the item is sold as prepared food.

This isn’t nearly as confusing at Washington state’s attempt to define candy (Kit-Kat doesn’t qualify) but it’s about as windy as…well, Wyoming.

Wyoming Redefines Food: Don’t Overprepare Your Danishes [Tax Foundation]

Americans for Tax Reform Is Annoyed with the ‘Tax-loving American Lung Association’

Because it’s pretty clear that the American Lung Association’s mission is to ensure everyone is paying higher taxes:

Predictably, the tax-loving American Lung Association is pushing for a massive 75 percent increase in Maine’s cigarette tax. They just think it’s the cat’s meow, curing all diseases while raising a boatload of money for state government to spend on pro-utopia policies.

Of course, that’s not how these things tend to work themselves out. For starters, Maine desperately needs jobs. An excise tax increase of this magnitude certainly will not deliver. Convenience stores count on tobacco products for roughly one-third of their sales. Government driving up the cost of cigarettes won’t help maintain payroll.

That’s because higher taxes will only further fuel migration to New Hampshire, where consumers will be able to save over $12 per carton of cigarettes. New Hampshire also levies no sales or personal income taxes. To have any hope of competing with its neighbor, any talk of tax increases must be completely off the table.

So taxes on cigarettes are off the table while cancer, chemotherapy, pain, suffering and shortened life spans are back on. Got it.

Illinois Legislature Considering a Slightly Less Huge Tax Increase

Last Friday, we were surprised to learn that those little anti-tax scamps over at Americans for Tax Reform have a sense of humor when they sarcastically gave the Illinois legislature credit for keeping the state’s proposed income tax increase below 80%.

Well, with today’s report that the IL pols have reconsidered their stance on that proposal, Grover Norquist and Co. are probably tickled pink:

The Illinois legislature moved a step closer Tuesday to passing its first tax-rate increase in nearly two decades to dig the state out of a $13 billion budget hole despite steep opposition from Republicans.

Tuesday afternoon, the House Revenue and Finance committee passed a scaled back version of a tax-increase proposal that was struck last week by leaders of the Democratically controlled legislature and Illinois Gov. Pat Quinn, also a Democrat.

Under the current version of the bill, the individual income-tax rate would jump to 5%, from the current 3%, a 67% increase. That is more conservative than last week’s proposed 5.25% rate, a 75% increase.

No reaction from ATR yet but we’re hoping for more GOP comedy relief.

Illinois House Panel Passes Tax Increase [WSJ]

New Jersey Should Send a ‘Thank You’ Note to California and New York

“In the recently-released 2011 State Business Tax Climate Index, New Jersey finally moved out of its last-place ranking on that list, in part due to Christie’s veto of the millionaires’ tax he mentioned during his interview. While it still ranks a pretty dismal 48 out of 50, it proves that improvement is possible, even in a state with a tax policy legacy as historically abysmal as New Jersey’s.” [Tax Foundation]

Iowa Sets the Bar on Film Tax Credit Inefficiency

From known tax credit antagonist, Joe Kristan:

Before the Iowa Film Tax Credit program exploded in scandal in September 2009, the state had granted $31,967,641 in transferable tax credits to filmmakers. Yesterday the State Auditor reported that $25,576,301 were issued improperly — a full 80% of the credits granted.


Quite the field of dreams. Read more over at Tax Update Blog.

Also see:
What Are Your Taxes Buying Hollywood?

Prop 19 May Not Be Such a Great Way To Bring In California Tax Revenues After All

While California legislators may be licking their lips at the thought of taxing marijuana – should California voters go all in on Prop 19 next month – a new RAND Corporation paper points out that the revenue impact on Mexican gangs could make much less of a bang than assumed by Prop 19 proponents.

The reasoning behind 19 is simple: California prisons are already packed with all sorts of shady individuals and locking up small-time pot dealers with murderers, gang-bangers and child molesters really only creates a criminal factory that costs our already broke state way too much money. Eliminating a large chunk of the criminality surrounding pot frees up correctional resources to put rverts and killers. So far that makes sense.

Legalizing marijuana also gives our sneaky little legislators the chance to tax the shit out of a multi-billion dollar business; they have already done this in cities like Oakland where pot dispensaries are limited and closely watched by TPTB to assure they get their cut. Implement this state-wide and maybe we won’t be so desperate to get into selling our stuff off and mailing out IOUs instead of actual money.

Or were we totally high when we came up with revenue estimates that promise $1 billion in extra cash for the state?


The RAND paper argues that California accounts for 1/7th of marijuana consumption in the U.S., much of which is grown, cultivated and sold here in the state. That isn’t money that will be taken out of Mexican drug traffickers’ pockets if Prop 19 passes as we Californians are already weed snobs and don’t smoke the Mexican garbage. What we have is a large black market subsidized by semi-legal pot funneled through dispensaries. Some locales tax it while others don’t under current rules and it appears as though Prop 19 leaves the same door flapping wide open in the breeze. Not exactly the big tax boom we’d hoped for.

Opponents argue that legalization of marijuana will actually backfire as the free market price of an ounce could drop to $38; great if you’re the one buying but not so great if you’re the one trying to make money off of your crop and now forking over taxes to the state.

Is there anything in Prop 19 that would actually require growers and buyers to bypass the underground market they have known for so long and give their share of taxes to the state? Not as far as I can tell.

Think of it this way: if the state suddenly started taxing soda at 10 cents a can and you knew a guy in your neighborhood who happened to be sitting on a stockpile of Pepsi, why on Earth would you go to the store and pay the additional 10 cents a can when you could simply unload a case or two from your neighbor at a lower price? The difference being there’s already a black market for pot and introducing consistent tax issues into the matter is certainly not the way to legitimize said black market.

Governor Schwarzenegger has already signed a bill into law that makes possession of less than an ounce an infraction ($100 fine) while SFPD cops are already taught to ignore casual pot smoking on San Francisco streets (just like everything else they ignore including defecation and rampant dysfunctional drug use) so why 19?

I don’t have an answer for that. On the surface Prop 19 seems to be a no-brainer but like any other piece of California legislation, it’s all in the implementation and I don’t believe our state can pull off the tax revenue payday they are banking on should California voters vote yes on November 2nd.

Or maybe all the stoners will stay home and get high on Election Day instead, having already decided this is a bad idea and not at all what it seems to be at first glance.

Louisiana Is Exempting Virtually All Deadly Weapons (and Accessories!) from Sales Tax This Weekend

At midnight this morning, a sales tax holiday began in the Bayou State on anything covered under the Second Amendment and a whole bunch of other stuff too.

Louisiana even went to the trouble of slapping together a 30-second ad:


Shockingly, American flags were completely omitted from this ad, which leads us to believe that there isn’t any political motive here, although this is only the second “Second Amendment Sales Tax Holiday.” You can safely assume that prior to 2009, Louisianians were not in fear of their freedom being taken away from them but since arackbay bamaoay started running things, people are arming themselves to the teeth for the impending roundup of gun snatching by the Feds.

For reference, here’s a list of everything that will be tax free but it boils down to this:

• Accessories designed to be used for hunting.
• Shotguns, rifles, pistols, revolvers or other handguns.
• Ammunition intended to be fired from a gun or firearm.
• Animal feed for consumption by game which can be legally hunted.
• Apparel such as safety gear, camouflage clothing, jackets, hats, gloves, mittens, face masks and thermal underwear for use while hunting.
• Off-road vehicles such as all terrain vehicles designed for hunting.

Not listed above but included in the exemption are “Knives that are manufactured and marketed as being primarily for use in hunting,” in case you’re one of those cold-blooded types that prefer killing with your bare hands. This does not include the amazing Ginsu Knife™ or other kitchen miracle blades.

Also not exempt are hunting dogs (taxed?) nor are “toy guns [Ed. note: wait, guns aren’t toys?] and vessels or off road vehicles utilized as children’s toys.” Additionally, “golf carts, bikes, motorcycles, tractors, or motor vehicles which may be legally driven on highways,” aren’t eligible.

So load up people. Hunting season is right around the corner. Although, for the sake of peace, try to leave the Democrats alone.

2010 Second Amendment Weekend Sales Tax Holiday is Sept. 3rd, 4th, & 5th [LA Dept. of Rev. via Don’t Mess with Taxes]

Should Groceries Be Taxed?

An interesting idea from the Tax Foundation’s Blog today that comes by way of Nebraska State Senator Rich Pahls. TF reports that Senator Pahls plans on introducing legislation that would broaden the sales tax base that would, theoretically, lower income or property taxes. TF takes it slightly further than Senator Pahls and suggests that groceries should be included in this broadened base.

There are few states that already tax groceries: “Alabama, Arkansas (3%), Hawaii, Idaho, Illinois (1%), Kansas, Mississippi, Missouri (1.225%), Oklahoma, South Dakota, Tennessee (5.5%), Utah (1.75%), Virginia (1.5% + 1% local option tax), and West Virginia (5%),” and TF argues that more states could benefit from this policy:

Broadening the sales tax base and lowering the rate is a good idea and a move in the direction of sound tax policy. Services should be taxed. Groceries should be taxed. All end-user consumption should be taxed. There is no reason that entire sectors of the economy and swaths of consumption should go untaxed while others are singled out for taxation. Broadening the tax base allows the government to raise the same amount of revenue with a lower tax rate, which reduces distortions in the economy. Taxing all consumption at the same low rate keeps lawmakers from picking winners and losers in the market and ensures you will be taxed equally no matter what you choose to purchase.

Unless you’re one of those people that doesn’t want pay taxes period, this is a sensible solution for states looking to close their budget gaps (even just a little bit). BUT! As you might imagine, taxing groceries is a hot political spud that, for some, is simply not an option:

[T]his type of reform is seen as radical and a political non-starter. One reason is that people have concerns that changes such as applying the sales tax to groceries might unfairly or disproportionately impact the poor. Even Sen. Pahls seems reluctant to embrace this “emotional” reform.

First, remember that broadening the tax base allows us to lower the rate, so that everyone, poor and rich alike, will be paying a lower tax rate on their non-grocery purchases, offsetting some of the increased tax paid on groceries. Still, lower income people spend a disproportionate amount of their income on necessities like food, and they may very well come out behind even after accounting for the lower rate. Then I would recommend implementing or expanding food assistance programs (which provide free food, not just tax-free food) targeted at those who truly need it.

The bottom line is that most of us can afford to pay sales tax on our grocery purchases. Exempting groceries for everyone is a very costly and indirect way of providing assistance to the poor.

Forget for a second that most state politicians can’t entertain actual solutions to budget problems and taxing groceries is sound policy. Think about it. If a states settles on a 5% grocery tax and you purchase $100 worth, that’s an extra $5. That isn’t going to put anyone on the street and if it does, we recommend sticking to the produce section where food is considerably cheaper.

And from a more practical standpoint, it certainly makes more sense than taxing shoe shines and jugglers.

Broadening the Sales Tax Base in Nebraska is the Right Idea [Tax Foundation]

Alabama Strives for the #1 Ranking in Obesity with Consideration of Tax on Gym Memberships

Yes, it’s true! Bama was number #2, according to the latest Robert Wood Johnson Foundation and the Trust for America’s Health ranking but with a little bit asinine tax policy, the Yellowhammer state could ascend to #1 spot.


Kiplinger has a slideshow that goes over some of the stranger (and desperate) measures some states are going to in order to close their budget gaps. Twenty-six states already tax bowling for crissakes! And now Michigan, Nevada, North Carolina and New Mexico are thinking about it too!

The ultimate, for us anyway, is the Alabama’s show of complete disdain for anyone considering to exert themselves in any manner, shape or form:

Later this year, Alabama will debate taxing gym memberships, a plan that could raise several million dollars a year in state revenue. A monthly membership would include the Yellowhammer State’s 4% sales tax.

You hear that? Several million dollars. Easily eaten by the costs associated with the 31% obesity rate. Sounds like a great plan.

10 Surprising Ways Your State May Tax You Next [Kiplinger via Bucks]

Pennsylvania Lawmakers Invite Citizens to Get on This Fiscal Crisis Thing

Either some Pennsylvania lawmakers are out of ideas for closing the state’s budget gap or they’re sick of the belly aching from the Keystone citizens because they’ve decided to put out there for the ordinary Quakers to give their suggestions for fiscal improvement.

So far there has been approximately 750 suggestions that range from consolidating school districts, “El excess management positions. 15 school districts in one county equals 15 superintendents, health care plans, IT departments, administrative departments, maintenance depts and so on” to downsizing the size of the state legislature, “downsize our legislature, there has been several articles on our size compared to other states whith [sic] smaller legislatures and much larger populations.”

Of course there are less constructive ideas such as the idea of having one huge pee party from “Gary” in Mount Joy (our bolding):

URINALYSIS for everyone who receives their salary from Tax dollars. Every tax dollar that comes out of our pocket pays for every teacher in the state, every state trooper, every state university professor, every congressman. We as taxpayers need to know that our tax dollars are not being used to fund illegal/ illicit drug use. We should have a Urinalysis for Every Teacher, every Congressman, every State worker, Every Professor of the state universities. If that is implemented, you will notice a lot of retirements/resignations. Saving the tax payers loads of money as well as stimulating the workforce because of the jobs that will need to be filled. This Is not an invasion of privacy.

EVERYONE IS ON DOPE!

And then there’s “frank” from York, PA who isn’t buying this pollution nonsense:

get rid of state car inspections & emissions testting [sic] – all the garbage about the air is all made up. And if we are the only country doing so, it proves that the goverment are liars! Yea every knows thats true

“Joe Wehner” from Pittsburgh just feels like hating on the whole process, thankyouverymuch:

Like our government, this site is a joke! They only publish dumb democrat liberal views. GOD Forbid any views that work… They won’t publish views outside of their agenda to ruin America.

But we like we said, there are some decent suggestions.

Pennsylvania website takes taxpayers’ ideas to save money [Philadelphia Inquirer]

URINALYSIS for everyone who receives their salary from Tax dollars. Every tax dollar that comes out of our pocket pays for every teacher in the state, every state trooper, every state university professor, every congressman. We as taxpayers need to know that our tax dollars are not being used to fund illegal/ illicit drug use. We should have a Urinalysis for Every Teacher, every Congressman, every State worker, Every Professor of the state universities. If that is implemented, you will notice a lot of retirements/resignations. Saving the tax payers loads of money as well as stimulating the workforce because of the jobs that will need to be filled. This Is not an invasion of privacy.

EVERYONE IS ON DOPE!

And then there’s “frank” from York, PA who isn’t buying this pollution nonsense:

get rid of state car inspections & emissions testting [sic] – all the garbage about the air is all made up. And if we are the only country doing so, it proves that the goverment are liars! Yea every knows thats true

“Joe Wehner” from Pittsburgh just feels like hating on the whole process, thankyouverymuch:

Like our government, this site is a joke! They only publish dumb democrat liberal views. GOD Forbid any views that work… They won’t publish views outside of their agenda to ruin America.

But we like we said, there are some decent suggestions.

Pennsylvania website takes taxpayers’ ideas to save money [Philadelphia Inquirer]

New Mexico Didn’t Have Anyone That Could Tame the MacGruber Mullet

Tax credits for film productions may be the bane of Joe Kristan’s existence but that doesn’t mean they can’t be popular (Tax Policy blog reports that 44 states have them).

MacGruber was no exception, however the person in charge of the mane of hair on Will Forte’s head did not result in a “direct expenditure,” so that cost did not qualify for the “Movie Production Incentive.”


The Journal’s Speakeasy Blog learned that keeping a mullet in such pristine condition was not an easy task and apparently there wasn’t a single stylist in the Land of Enchantment qualified to handle it:

We made the movie in Albuquerque, so part of the [tax break] deal is that you’re supposed to use a largely New Mexican crew. But the [MacGruber] wig is an unruly little creation, so Betty Rogers, who’s the head of the hair department at SNL, came to make sure it was tamed every day. She is so good at what she does. So it was basically her and a bunch of great people from New Mexico.

Great people, maybe. Not so enchanting if they can’t handle a mullet.

‘MacGruber’: Star Will Forte on Wigs, Nudity and Tax Breaks [Speakeasy/WSJ]
‘MacGruber’ Talks Tax [Tax Docket]
Movie Production Incentives: Blockbuster Support for Lackluster Policy [Tax Foundation]