States and Towns Lean on Taxpayers

Wall Street Journal ^ | September 26, 2009 | Conor Dougherty

[reaganaut1]

State and municipal governments, struggling with sinking revenue, are raising money by levying fees on consumers, slapping local businesses with back taxes and tweaking tax laws in ways that force many businesses to pay more.

That is leading to accusations -- and, in some cases, lawsuits -- that governments are trying to rake in more money without officially raising taxes, sometimes illegally.

The San Francisco Board of Supervisors, which can't easily raise taxes without a referendum, has approved a controversial cigarette "fee" of 20 cents a pack that takes effect next month.

Last week, five retailing groups sued New York state alleging that a new tobacco-registration fee was unconstitutional. The groups argued the new fee, which uses a sliding scale based on a retailer's total sales, instead of just cigarette sales, "is essentially a tax," said Andrew Curto, a lawyer representing the groups.

Across the nation, lawyers say municipalities are stepping up audits of businesses in a hunt for back taxes. "We have several cases right now that are at the audit stage, and the localities are taking very aggressive stances," said Eric Tresh, a partner in the Atlanta office of corporate law firm Sutherland Asbill & Brennan. "We're going to see a lot more of these cases in court."

After an audit last year, the city of Sandy Springs, Ga., sent locally based electricity producer Mirant Corp. a tax bill for about $14 million in occupation tax, including interest and penalties, for 2006 to 2008. That compared with a bill of about $85,000 in occupation tax -- a kind of sales tax levied on companies instead of consumers -- that the company paid in 2005.

Mirant fired back with a lawsuit alleging the city's reading of Georgia tax law was "erroneous and unlawful."

[unixfox]

Never mind trying to cut back on their own over bloated budgets. Just tax the lemmings more!

I'm tellin ya, people are getting real tired of this sh!t.

[John 3_19-21]

Only the regular folks are required to tighten our belts in a recession.

[stephenjohnbanker]

“Never mind trying to cut back on their own over bloated budgets. Just tax the lemmings more!

I’m tellin ya, people are getting real tired of this sh!t. “

Very very tired. The party’s over, so tell the thieves!

[tbw2]

They literally cannot take it when income drops due to government intervention in the economy, and then the government comes to take an even larger share of a smaller pie. ObamaCare Jokes Obama Jokes

[B.O. Plenty]

Elections have consequences....

It's Time to Part Company

[mallardx]

Here in Colorado, our new Dem Governor has issued countless “fee” increases - and our media does not dare call them tax increases. Time to take out the Trash. Unfortunately, I am seeing legions of Katrina refugees here, undoubtedly moved here to rock the vote.