Big Holes In a Sales Tax
|May 23, 2013||Posted by Staff under Taxes|
Over the years, some groups have won breaks that allow them to pay no tax, or a lesser rate.
Manufacturers, for example, pay a 1 percent tax on equipment purchases that is capped at $80. Utilities can sell to businesses and residences at a reduced rate of 3 percent. Many charitable nonprofits, including hospitals, pay little or no sales tax.
Loggers, computer software makers, NASCAR racing teams and some air carriers avoid at least some of the sales tax on some of their purchases. Newspapers and broadcasters escape sales taxes on some of their purchases.
Each time the state raises its sales tax on goods, it does so on a shrinking base, getting less and less revenue over time. The state’s economy has flipped from two-thirds goods and one-third services to one-third goods and two-thirds services.
Two beneficiaries of exemptions gave $100,000 a piece to candidate, well above the $4,000 maximum, but no charges were filed because the contributions weren’t discovered until after a two-year statute of limitations had expired.