How will small businesses in Colorado fare under a new online sales tax? Starting December 1, all retailers who ship goods to consumers in Colorado will have to collect and remit sales tax based on the buyer’s address. The state has 344 taxing jurisdictions with 683 possible sales tax combinations. Out-of-state businesses are exempt if they have 200 or fewer transactions or do $100,000 or less in sales in Colorado annually. But some local business owners worry that the extra red tape will hurt their bottom line. The state’s department of revenue gave firms a six-month grace period before it enforces the new requirement.
Speaking about online retailers: Amazon’s HQ2 may be two HQ2s… The Wall Street Journal reports (paywall) that Amazon may split its second headquarters across two cities, each with 25,000 employees. The online retail giant says that’s to attract enough tech talent. The decision will ease the burden on the chosen city’s housing and transit systems… and perhaps a state’s or city’s tax expenditures.
And speaking of Amazon… Finance ministers from European Union member states will meet today to try to advance a plan to assess a 3 percent tax on European sales by companies with a global annual revenue of $853 million or more. Targets include Facebook, Alphabet (Google) and Amazon.
Foxconn’s 30-bagger. Remember the economic development deal Taiwanese manufacturer Foxconn struck with Wisconsin last year? The state gave the firm what turns out to be about $4.1 billion in subsidies in exchange for a big new plant that was to create 13,000 jobs. Since the initial agreement, the firm scaled back the plant and made other changes. Economic development expert Tim Bartik now estimates that the deal is equal to a 30 percent wage subsidy for 20 years, 10 times the average subsidy for a development deal.
So near, and yet so far. Congress agreed to give the IRS an extra $77 million to get ready for the 2019 tax season. But Politico reports that the agency can’t tap the funds until Congress completes work on a financial services spending bill. So far, that measure is among a handful that remain unfinished. As a result, the agency is operating at last year’s funding level. Worse, its budget could get hung up in a post-election battle over President Trump’s wall.
IRS renews and improves its agreement with Free File Alliance. The agency has reached a deal with the Free File Alliance to improve the program for the 2019 filing season. Changes include clear directions to ensure that taxpayers are offered the free service as a primary option and follow-up emails to remind taxpayers to file. The Free File Alliance is a nonprofit coalition of industry-leading tax software companies. The alliance partners with the IRS to help taxpayers earning $60,000 or less prepare and e-file their federal tax returns for free.
Call for Papers for the 9th Annual IRS-TPC Joint Research Conference on Tax Administration. Researchers from the US and abroad are invited to submit proposals for papers for the conference, scheduled for June 20, 2019 at the Urban Institute. General areas of interest include measuring and influencing taxpayer compliance, estimating taxpayer compliance costs, tax complexity, improving tax administration, and understanding the nature and behavior taxpayers. Click here for the formal call for papers. For more information about IRS research conferences, including links to previous conference programs and papers, click here. Proposals are due by close of business on Monday, December 3, 2018.
If you’d like to tell us about a new research paper or have any comments about the Daily Deduction, TPC’s summary of the day’s tax news, write Renu Zaretsky at [email protected]. You can sign up here to receive the Daily Deduction as an email newsletter every weekday morning (Mondays only when Congress is in recess) at 8:00 am.
