So Iowa approved the additional tribute to close the deal on the new Lee County fertilizer plant. With all of the fertilizer generated by politicians explaining the benefits of the project, it’s hard to see how the new plant can withstand the competition. My favorite line from the Governor’s press release — purchased with up to $107 million in tax credits, plus local breaks bringing the package to $240 million — was this:
To successfully compete for this project, Iowa had to offer incentives to overcome its current corporate income tax structure. The governor used this project as an example of why tax reform is necessary.
So the out-of-state company gets $240 million now, while it’s jam tomorrow for everybody already here trying to “overcome” our current corporate income tax structure every day — the same taxpayers who will pay to fertilize the Lee County plant. Some of us have been pointing out how uncompetitive Iowa’s income tax system is for a long time, but the Governor has done nothing about it in the first two years of his term — and not much in his four previous terms, either. But let some out-of-state company present an opportunity for a big ribbon-cutting, and $107 million in tax credits suddenly materialize. To put that in perspective, Iowa’s entire corporate income tax receipts for fiscal 2011 came to $394.5 million. Priorities, I guess.
Update, 9/8: Fertilizer plant deal involves largest tax incentive package in Iowa history (Bleeding Heartland)
The tax relief postpones various tax filing and payment deadlines that occurred on or after Aug. 26. As a result, affected individuals and businesses will have until Jan. 11, 2013 to file these returns and pay any taxes due. This includes corporations and businesses that previously obtained an extension until Sept. 17, 2012, to file their 2011 returns and individuals and businesses that received a similar extension until Oct. 15. It also includes the estimated tax payment for the third quarter of 2012, normally due Sept. 17.
It covers 10 Louisiana parishes and four Mississippi counties.
12-year sentence for payroll tax scamming. From a Department of Justice press release:
Bruce Gregory Harrison III of Greensboro, N.C., was sentenced today to 144 months in prison following his December 2011 conviction for payroll tax fraud and other crimes, announced Kathryn Keneally, Assistant Attorney General for the Justice Department’s Tax Division; Ripley Rand, U.S. Attorney for the Middle District of North Carolina; and Richard Weber, Chief of Internal Revenue Service (IRS) – Criminal Investigation.
Harrison was convicted on a 63-count indictment alleging large-scale payroll tax fraud and failure to file individual income tax returns. The evidence at trial and at sentencing showed that Harrison failed to pay over more than $40 million dollars in federal taxes withheld from the pay of his thousands of employees in the years 2004-2006 and 2009.
If you withhold payroll taxes and fail to remit them, the consequences can be a lot worse than late-payment penalties.
TaxGrrrl, Eleven Tax Myths Debunked. The $600 free-money myth, among others.
Did Someone Really Steal Mitt Romney’s Tax Returns From PwC’s Franklin, Tennessee Office? (Going Concern, Did Someone Swipe Mitt Romney’s Unpublished Tax Returns from PwC? (Anthony Nitti),and Anonymous hackers claim to have Romney’s tax returns, demand $1 million ransom to keep them private (Kay Bell). I suppose it could happen, but that’s not the way to bet.
Christopher James, Iowa State Board of Tax Review Rules in Favor of Cable Company in Central Assessment Property Tax Case – (Davis Brown Tax Law Blog)
Patrick Temple-West, Essential reading: How Romney avoided a controversial tax practice, and more
Will Freeland, To Eliminate Income Tax Fraud, Simplify the Tax Code (Tax Policy Blog)
Peter Reilly hosts a guest post, In Defense Of Special Tax Treatment For Clergy
News you can use: Flying 5,400 Miles and Finding an $882,000 Shortfall in a Prizepool Isn’t a Good Thing (Russ Fox)
Support the arts! NY Court to Decide If Lap Dance Is Tax-Exempt Art (TaxProf)