Rebates, Winnings, Losses and Mergers
By Renu Zaretsky :: April 29th, 2014
Connecticut taxpayers won’t see a rebate after all. Despite Democratic Governor Dannel Malloy’s re-election year hopes, state revenues will not likely be available for a $55-per-person rebate or a supplemental payment to the state employees’ pension fund. As a result of lower-than-expected tax collections, any excess revenues will be deposited into the state’s rainy day fund. Republican legislators had questioned whether the rebate would have boosted economy activity or just paid for a tank of gas (though the two actions are not mutually exclusive).
Massachusetts gamblers take heart: The house is on your side. MGM and Wynn, two Las Vegas based companies seeking to win the state’s first gambling licenses, would like Massachusetts to repeal the income tax on certain winnings over $600, since tax rules in neighboring states are more attractive to gamblers. Either way, said one Massachusetts resident: ‘“…if they’re going to collect taxes, then they should also accept [deductions for] losses.’’’ (That’s what federal law allows.)
California loses out to Texas. Toyota is moving much of its sales and marketing force to suburban Dallas, due to Texas’ lower business taxes, real estate prices, and cost of living. For comparison, see TPC data here that show how California’s and Texas’ corporate income tax rates compare. In a nutshell, there is no comparison.
There’s some aversion to inversions, but no action to stop them. Following the proposed merger between US-based Pfizer and UK-based AstraZeneca, the new firm will be based in the UK. Bloomberg reports that Pfizer would join other US companies who merge and shift ownership abroad, in part to reduce their US income tax bill. Legislators on both sides of the aisle seem to take issue with the practice, but the trend continues: Fifteen companies have made such a shift since 2012.
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