Taxes Matter XIII: Tax Planning

Taxes Matter XIII: Tax Planning

November 2, 2007 Posted by J. Scott Moody - No Comments

One tired theme we constantly hear in Maine is that “taxes do not matter” to businesses. Economics tells us that taxes are a cost of doing business–and all costs matter. So the other day the answer to this question came to me in my mailbox. A business called Commerce Clearing House, a national publisher of tax related reference books at the federal, state and local levels, sent me a solicitation letter and catalog. The letter states:
“If your company does business in more than one state, you can ensure compliance with state laws–and slash your tax bill at the same time–with the CCH 2008 Multistate Corporate Tax Guide. This time-saving reference increases your productivity by quickly targeting the information you need to design and execute a winning multistate tax strategy–one that conforms to all state requirements and improves your profit picture as well.”
Note that they mention the cost-savings not once, but twice in that one paragraph alone. Clearly the private sector realizes that taxes matter. Otherwise CCH would not have stressed the cost-saving potential in their marketing material. Its only the public sector, or folks that depend on the public sector, who deny that taxes matter.
In addition, the cost-savings must be significant. The cost of the 2008 Multistate Corporate Tax Guide is $579 and runs 2,100 pages. Here are some of the not-so-fun tax questions you could answer from this guide:
“Is income tax nexus the same as sales and use tax nexus?
“Which states permit an S-corporation to file a composite return for non-resident shareholder?”
“Are delivery/shipping charges subject to sales and use tax?”
Here’s an idea, why not require every lawmaker to sit down with a copy of this reference book and find the answer to these questions. Perhaps then we will get real tax reform.