state tax

I’ve been keeping my eyes on the Streamlined Sales Tax Project for awhile now, checking in to see which states are members, which states aren’t, and which states are in the process of joining.

In a lot of ways the SST makes sense. It would end nexus shopping, and the lure of state-line shopping from a high-tax state into a lower-tax state (i.e., Californians popping over to Oregon), assuming that both states charged a sales tax. So some recent news about SST surprised me.

One of the sticking points for many of my clients with Nevada companies (located/run from outside the State of Nevada) is whether or not they are required to pay the yearly $100 business license fee. Most people don’t really like my answer (yes, you do). Many others are unaware that the rules changed a few years ago. Up until now it hasn’t really been a huge issue either. But, with the financial difficulties this state faces, along with the close of the Amnesty program on September 30th of this year, things could change.

There are a growing number of states looking at the gross receipts tax as an option for collecting tax from businesses. Why? That’s the easy part to answer. States need money. Some states such as Texas have a state constitution that forbids taxing income at the state level. So, how do they raise needed money?

The answer is the gross receipts tax. There are currently a handful of states that have a form of this tax. These include Arizona (only for 16 industries), Delaware, Hawaii, Illinois, MIssissippi, New Mexico, Ohio, Texas and Washington.

Hi … my name is Megan and I’m guest blogging for Diane this week. She’ll be back around September 16th. I’m the owner of Business First Formations, Inc., a company that helps business owners get their businesses set up and maintained.