Higher taxes for the new fiscal year
July 1st marks the start of a new fiscal year for most states in America, and a couple of changes related to taxes and penalties have been implemented.
Monona, Wisconsin
A law has been implemented which focuses solely on bullies and their parents. The act of bullying ranges from schoolyard fights to cyber bullying. Offenders will have to pay $114 on the first offense, and $177 for any succeeding offenses. This law encompasses kids aged 12 and over; in some extreme cases, parents of kids less than age 18 may also be fined for their child’s behaviour. The fines, referred to as “bullying taxes” are just one of the many that are expected to be implemented in the state.
Florida
Slower drivers on the fast lane need to watch their rear views more often to ensure they are not stalling cars behind them. Florida’s “road rage” law makes it illegal for cars to drive more than 10 miles below the speed limit if another car is trailing them.
According to Lt. Jeff Frost of Florida Highway Patrol, a violation of this kind will appear the same way as a speeding ticket – and in effect could lead to a higher insurance bill and taxes.
On the other states, shopping also takes a hit. In Arkansas, consumers will be slapped an additional 0.5% in sales taxes, bringing the state’s taxes to 6.5%. For a $600 gadget, this means an additional $3 on the bill. Furthermore, online shopping also takes a hit. In Minnesota, consumers will now be charged higher sales taxes on online purchases. A $9.99 game will cost an additional 69 cents on sales taxes.
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Reaping the benefits of marriage equality
Same sex couples have more than marriage equality to be thankful for with the recent United States Supreme court ruling – it also comes with financial benefits that can save them thousands of dollars on taxes.
When gay or lesbian couples marry, they will now be able to enjoy the rights and benefits experienced by any other couple. Depending on the income between the two individuals, their taxes could go up or down.
As an example, a person earning $70,000 and his partner $30,000, will have their tax bracket falling at $19,000 if filed separately vs. $12,000 if filed jointly. There may be instances where the joint filing brings them to pay higher taxes, but other social insurance and medical benefits will offset the disadvantage.
John Singh and Jeff Watson have been domestic partners for 12 years, and they could not get any happier than the opportunities opened for them. The IRS now recognizes California same-sex marriages and is already allowing these couples to file taxes jointly.
Before the ruling on the Defense of Marriage Act, same sex couples could only file taxes as domestic partners which only confused the IRS. Once, Jeff Watson received notices from the IRS informing him of thousands of debt in self-employment taxes. But he wasn’t self-employed – his partner Jeff Singh was.
To date, specifics on joint filing of taxes are still being worked on by the federal government. As Jeff Watson pointed out, “once we have more clarity on that, we’ll probably be able to make a more informed decision.”
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Apple – “Think” Taxes
Tech giant Apple is on the hot seat again for apparently paying nothing for corporation taxes for its UK subsidiaries in 2012.
According to the corporate results filed by the company, its two subsidiaries made pre-tax profits of around 60 million pounds, and sales of over 1 billion pounds combined. So why the company pay zero in taxes?
According to Forbes, there are three things to consider before allegations are made against the company.
First, iTunes sales are made in Luxembourg as VAT rates are lower. Furthermore, the EU tax law itself states that “electronic services” pay taxes in the country they come from and not the country where the service is delivered. For physical services or items, the rate will follow the place of delivery. So in the case of iTunes’ digital downloads, all the taxes will be settled in Luxembourg even if the recipient is in the UK.
Second, Apple being a global company, has its business structured strategically. Apple purchases its materials from China via an Irish company which will then sell the products to different dealers and Apple stores all over the world. The profits earned by the Irish company will are taxed in Ireland – although in Ireland, taxes only need to be paid if the transaction took place within the country – so no taxes need to be paid.
Finally, operating profits are not subject to taxes in the UK. What are taxed are the profits before tax. What the company does is that it issues stocks to the management as part of their pay. Expenses due to employee pay are deducted from pre-tax profits, and only then will they be only to calculate the taxes due.
While there is nothing illegal about what Apple is doing as far as its taxes as concerned, it all seems dodgy and a little discomforting for some. After all – Apple’s signature is to “Think” – and so there is actually no surprise to the company’s creativity in managing its finances.
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