Category

state & local

Category

The Treasury Department and the Internal Revenue Service have announced that they have distributed more than 152 million Economic Impact Payments, sometimes referred to as stimulus checks. The payments total nearly $258 billion, with an average payment of $1,695 (that’s roughly the value of a check for a single adult and a child).

“Economic Impact Payments have continued going out at a rapid rate to Americans across the country,” said IRS Commissioner Chuck Rettig. “We remind people to visit IRS.gov for the latest information, including answers to the most common questions we see surrounding the payments. We also continue to urge those who don’t normally have a filing requirement, including those with little or no income, that they can quickly register for the payments on IRS.gov.”

Included in the announcement were updated state-by-state figures.

Not surprisingly, California received the most payments (16,869,636): it is the largest state by population. The top five states to receive payments followed population trends with Texas, Florida, New York, and Pennsylvania in line behind the Golden State.

On the other end of the spectrum, states also mostly followed population trends with Wyoming, the District of Columbia, Vermont, Alaska, and North Dakota receiving the least amount of checks.

You can see how all of the states fared here:

If that’s tough to read, you can view it on Scribd (or click the link at the top for the IRS announcement).

Utah taxpayers received the most money per check ($1,938), followed by Idaho ($1,872), South Dakota ($1,821), Nebraska ($1,815), and Wyoming ($1,806).

District of Columbia taxpayers received the least money per check ($1,368) followed by Massachusetts ($1,603), New York ($1,609), Rhode Island, ($1,622) and Maryland ($1,627).

My guess is that many of those in high-density areas, like D.C. and New York, were likely phased out of the higher checks. Phaseouts are based on adjusted gross income (AGI), but AGI does not reflect the cost of living, nor taxable income (it’s your income before your standard or itemized deductions). 

Here’s how that would impact checks. It costs an estimated 52% more to live in D.C. than in Cheyenne, Wyoming. That tends to explain higher salaries (to make up for the cost of living) in areas like D.C. But, stimulus checks do not reflect any adjustments for the cost of living. 

The amount of the payment phases out for those earning more than $75,000 ($150,000 for joint returns and $112,500 for heads of household). Phaseout means that the benefit goes down as income goes up.

To put that into context, an income of $75,000 in Cheyenne is roughly equivalent to $114,000 in D.C. With respect to stimulus payments, the Cheyenne resident would receive the full $1,200 payment for a single adult, while the D.C. resident would receive nothing. 

An income of $65,000 in Cheyenne is about the same as $98,800 in D.C. At those numbers, the Cheyenne resident would receive the full $1,200 payment for a single adult, while the D.C. resident would receive $10.

The checks were sent out to mitigate the impact of the COVID-19 pandemic. As of today, Johns Hopkins University puts the total number of U.S. cases at 1,662,768, with 98,223 deaths. By total numbers, the states which have been most impacted by the pandemic are New York, New Jersey, Illinois, Massachusetts and California.

The IRS plans to continue to send out payments throughout the year. Payments are automatic for people who filed a tax return in 2018 or 2019, receive Social Security retirement, survivor or disability benefits (SSDI), Railroad Retirement benefits, as well as Supplemental Security Income (SSI) and Veterans Affairs beneficiaries who didn’t file a tax return in the last two years. For those who don’t receive federal benefits and didn’t have a filing obligation in 2018 or 2019, visit the Non-Filer tool at IRS.gov to register.

(Note: Updated April 1, 2020)

On March 20, 2020, Treasury Secretary Mnuchin extended the tax filing and payment deadline to July 15, 2020. You can find more information and guidance here.

Some tax-related agencies and departments are closing:

  • The US Tax Court is closed to the public (notice downloads as a PDF). You may still file petitions and use online services.
  • Social Security offices are closed to the public. You may still conduct some business by phone or online.
  • All AARP Foundation Tax-Aide services and most IRS Volunteer Income Tax Assistance (VITA) program sites have closed.

Some states are extending filing and payment deadlines. Here’s what we know so far:

Alabama: Governor Kay Ivey and the Alabama Department of Revenue announced that the state income tax filing due date is extended from April 15, 2020, to July 15, 2020. Taxpayers can also defer state income tax payments due on April 15, 2020, to July 15, 2020, without penalties and interest, regardless of the amount owed. This deferment applies to all taxpayers, including individuals, trusts and estates, corporations, and other non-corporate tax filers.

For small businesses, restaurants, and other foodservice businesses unable to pay their state sales taxes due to the impact of the coronavirus (COVID-19), late payment penalties will be waived for taxes reported on returns filed for the February, March, and April 2020 reporting periods. Similar relief is being provided for state lodgings taxes due for these same periods.

Arizona: The Arizona Department of Revenue (ADOR) has announced it has moved the deadline for filing and paying state income taxes from April 15 to July 15, 2020 following direction today by Governor Doug Ducey. This includes individual, corporate and fiduciary tax returns. Taxpayers anticipating they will need more time beyond the new July 15 deadline to file state income taxes should consider filing for an extension.

Arkansas: Governor Hutchinson announced the state deadline to file and pay individual income taxes has been extended to July 15, matching the federal extension.

California: FTB is postponing until July 15 the filing and payment deadlines for all individuals and business entities for 2019 tax returns, 2019 tax return payments, 2020 1st and 2nd quarter estimate payments, 2020 LLC taxes and fees, and 2020 Non-wage withholding payments.

Colorado: The income tax payment deadline has been extended for all Colorado taxpayers by 90 days until July 15, 2020. All income tax returns that were required to be filed by April 15, 2020, are granted a six-month extension and are due on or before October 15, 2020. Click here for more information.

Connecticut: At the direction of Governor Ned Lamont, the Connecticut Department of Revenue Services (DRS) is extending the filing and payment deadline for personal income tax returns 90 days, to July 15, 2020. The extension also applies to Connecticut estimated income tax payments for the first and second quarters of 2020.

Delaware: The Delaware Division of Revenue (DOR) announced the deadline for taxpayers to file their 2019 Delaware personal income tax returns has been extended to July 15, 2020. The filing deadline for corporate income taxes is tied to the federal income tax due date which was recently extended to July 15, 2020. Under a Technical Information Memorandum 2020-01, DOR has also extended income tax filing deadlines for corporate final, corporate tentative, estimated personal income taxes, and fiduciary income taxes due in April to July 15, 2020. All other returns remain due without extension. Individuals who are unable to meet the July 15 filing deadline may file an extension request online on or before July 15 at, by email to DOR_PublicService@delaware.gov, or through their tax preparer.

Hawaii: The Department of Taxation has issued Tax Announcement 2020-01 to grant special tax relief for State income taxpayers similar to the IRS. The due date for filing 2019 State income tax returns due from April 20, 2020 to June 20, 2020 is postponed to July 20, 2020. The due date for making 2019 State income tax payments due from April 20, 2020 to June 20, 2020 is postponed to July 20, 2020. The Tax Announcement applies to individuals, trusts and estates, corporations, and other non-corporate tax filers as well as those who pay self-employment tax. The relief provided in the Announcement applies solely to returns and payments for Tax Year 2019 due from April 20, 2020 to June 20, 2020, and does not include estimated income tax payments for the 2020 taxable year.  Please see the Tax Announcement for more information.

Indiana: On March 19, 2020, Gov. Holcomb announced DOR is extending certain filing and payment deadlines to align with the IRS. Individual tax returns and payments, along with estimated payments originally due by April 15, 2020, are now due on or before July 15, 2020. Corporate tax returns and payments, along with estimated payments originally due by April 15 or April 20 are now due on or beforeJuly 15, 2020: those originally due on May 15, 2020, are now due on August 17, 2020. All other tax return filings and payment due dates remain unchanged. These due dates can be found on DOR’s tax filing deadlines webpage.

Iowa: The Iowa Department of Revenue has extended the filing and payment deadline for several state tax types as a result of an order signed by Director of Revenue Kraig Paulsen. The order extends filing and payment deadlines for income, franchise, and moneys and credits taxes with a due date on or after March 19, 2020, and before July 31, 2020, to a new deadline of July 31, 2020.

Kansas: Gov. Kelly signed Executive Order #20-13, extending tax filing deadlines to July 15, 2020, and waiving any interest and penalties for returns and payments made on or before July 15, 2020. In the event the State of Disaster Emergency originally proclaimed on March 12, 2020, is lifted or expires prior to July 15, 2020, the Department of Revenue shall continue to exercise appropriate discretion to make effective the waivers of penalties and interest for payments made up to July 15, 2020.

KentuckyKentucky will match the IRS with a 7/15 deadline for filing and payment per Governor Beshear.

Louisiana: Businesses have additional time to file returns due this month for sales and excise taxes collected by the Louisiana Department of Revenue (LDR). The extended deadline is May 20, 2020, for applicable returns and payments that were due Friday, March 20. The extension applies to sales, beer excise and wine excise tax returns and payments for the February 2020 tax period. This is an automatic extension and no extension request is necessary. LDR will waive penalties and interest for applicable returns and payments received by the extended May 20 deadline. For more information, including a full list of all taxes eligible for this relief, read Revenue Information Bulletin 20-008.

Maryland: The deadline to file a 2019 income tax return for Maryland individual, corporate, pass through entity, and fiduciary taxpayers is now July 15, 2020. Fiscal year filers with tax years ending January 1, 2020 through March 31, 2020 are also eligible for the July 15, 2020 extension for filing returns and payment. The due date for March quarterly estimated payments of 2020 taxes is also extended to July 15, 2020. The extension to July 15, 2020 for filing of returns and payment of 2019 taxes is automatic; no filing or request is required to take advantage of the extended deadline.

Michigan: The Department of Treasury is waiving penalty and interest for the late payment of tax or the late filing of the return due on March 20, 2020. The waiver will be effective for a period of 30 days; therefore, any return or payment currently due on March 20, 2020 may be submitted to the Department without penalty or interest through April 20, 2020. The waiver is limited to sales, use, and withholding payments and returns due March 20, 2020. Questions may be directed to the Department at (517) 636–6925.

Minnesota: The state is providing additional time until July 15, 2020, for taxpayers to file and pay 2019 Minnesota Individual Income Tax without any penalty and interest. Also, the state is granting a 30-day Sales and Use Tax grace period for businesses required to suspend or reduce services under Executive Order 20-04.  The Minnesota due date has not changed for Corporation Franchise, S Corporation, Partnership, or Fiduciary taxes. However, under state law, C corporations receive an automatic extension to file their Minnesota return to the later of November 15, 2020, or the date of any federal extension to file, and S corporations, partnerships, and fiduciaries receive an automatic extension to file their state return to the date of any federal extension to file. 

Mississippi:The deadline to file and pay the 2019 individual income tax and corporate income tax is extended until May 15, 2020. The first quarter 2020 estimated tax payment is also extended until May 15, 2020. Penalty and interest will not accrue on the extension period through May 15, 2020. Withholding tax payments for the month of April are extended until May 15, 2020. The extension does not apply to Sales Tax, Use Tax or any other tax types.

Missouri: The tax filing deadline is extended to July 15, 2020.

Montana: Governor Steve Bullock extended the payment and filing deadlines for 2019 individual income taxpayers to July 15 in accordance with the new federal filing deadline. The deadline for those making estimated tax payments for the first quarter of 2020 has also been extended to July 15. The due date for the second quarter remains July 15 at this time.

Nebraska: Governor Pete Ricketts announced that Nebraskans will have until July 15, 2020 to pay state income taxes. For Nebraskans impacted by COVID-19, this change will give them additional flexibility. Nebraskans who are not impacted by the virus should consider filing by the traditional April 15th date.

New Jersey: We don’t have an update on the website but we do have a tweet from the Governor: The New Jersey state tax filing deadline WILL BE EXTENDED from April 15th to July 15th.

New Mexico: The New Mexico Taxation and Revenue Department (TRD) has announced that New Mexico taxpayers qualify for extended return and payment deadlines due to the COVID-19 statewide public health emergency declaration (Executive Order 2020-004) by Governor Michelle Lujan Grisham. Personal & corporate income tax returns and payments due between April 15, 2020 and July 15, 2020 may be submitted without penalty no later than July 15, 2020. Withholding tax returns and payments due between March 25, 2020 and July 25, 2020 may be submitted without penalty no later than July 25, 2020. TRD will not impose penalty if a taxpayer complies with the extensions but interest is imposed from the original statutory date tax is due because TRD has no authority to waive interest pursuant to Section 7-1-13 NMSA 1978.

New York: The Tax Department has extended the due date for New York State personal income tax and corporation tax returns originally due on April 15, 2020, to July 15, 2020. Sales tax payments and returns were due March 20, 2020; however, penalty and interest may be waived for quarterly and annual filers who were unable to file or pay on time due to COVID-19.

North Carolina: The N.C. Department of Revenue (NCDOR) announced that they will extend the April 15 tax filing deadline to July 15 for individual, corporate, and franchise taxes to mirror the announced deadline change from the Internal Revenue Service. In addition to the filing extension, the NCDOR will not charge penalties for those filing and paying their taxes after April 15, as long as they file and pay their tax before the updated July 15 deadline. However, the department cannot offer relief from interest charged to filings after April 15. Unless state law is changed, tax payments received after April 15 will be charged accruing interest over the period from April 15 until the date of payment. These changes do not apply to trust taxes, such as sales and use or withholding taxes.

North Dakota: The State of North Dakota is currently aligned with the IRS extension date. Individuals or businesses who are unable to file an income tax return or pay the tax by the April 15th deadline, can file and make payment through July 15, 2020, without penalty and interest. You have the ability to request additional time if you believe you will be unable to file a return or pay the tax in a timely manner because of a COVID-19 related situation, please contact the Office of State Tax Commissioner.

Oklahoma:  Oklahomans now have until July 15, 2020 to file and pay their 2019 Oklahoma income tax return. In response to Treasury Secretary Steven T. Mnuchin’s announcement on Friday that the Trump administration has decided to push the federal income tax filing date from April 15 to July 15, the Oklahoma Tax Commission (OTC) is likewise extending the 2019 Oklahoma income tax return due date from April 15 to July 15, 2020.

Oregon: The department is tied to the Internal Revenue Service filing and payment due dates for personal income taxes. If the IRS declares the April 15 due date to be extended due to the COVID-19 pandemic, Oregon will automatically connect to those dates for personal income tax filers.

Pennsylvania: The Department of Revenue announced the deadline for taxpayers to file their 2019 Pennsylvania personal income tax returns is extended to July 15, 2020. This means taxpayers will have an additional 90 days to file from the original deadline of April 15. The Department of Revenue will also waive penalties and interest on 2019 personal income tax payments through the new deadline of July 15, 2020. This extension applies to both final 2019 tax returns and payments, and estimated payments for the first and second quarters of 2020.

Also, there will be additional time in certain cases for taxpayers who wish to appeal a tax assessment issued by the Department of Revenue or file a petition for a tax refund with the Board of Appeals. Visit the Board of Appeals’ Online Petition Center for further information on tax appeals.

South Carolina: In response to the challenges of COVID-19 and in accordance with Executive Order 2020-12, the South Carolina Department of Revenue (SCDOR) is moving the due date for Income Tax returns and payments originally due April 15, 2020 to July 15, 2020 and is temporarily allowing retailers who meet certain requirements to sell sealed containers of beer and wine for curbside/drive-thru pickup for off-premises consumption. Read the full news release here.

Tennessee: The Tennessee Department of Revenue has extended the due date for filing and paying franchise and excise tax from April 15, 2020 to July 15, 2020. For more information, read important notice #20-05.

Utah: The IRS has automatically extended the deadline for 2019 individual and corporate returns and payments to July 15, 2020, without penalties and interest, regardless of the amount owed. The Utah State Tax Commission, after consultation with the Governor, the President of the Senate and the Speaker of the House, intends to follow the federal government’s tax filing and payment actions in response to the COVID-19 outbreak. We are waiting to review the official instructions from the IRS to make certain that we align properly with the federal requirements.

Vermont:The Vermont income tax filing due dates for the following taxes have also been extended from April 15, 2020 to July 15, 2020 for Vermont personal income tax, Vermont Homestead Declaration and Property Tax Credit Claims, Corporate income tax, and Fiduciary income tax. Taxpayers may file and pay these taxes before July 15, 2020, without penalty or interest.

Virginia: Businesses impacted by coronavirus can request an extension of the due date for filing and payment of their February 2020 sales tax return due March 20, 2020, for 30 days. When granted, businesses will be able to file and pay no later than April 20, 2020 with a waiver of any penalties. Any income tax payments due during the time period of April 1, 2020, to June 1, 2020, will now be due on June 1, 2020. This includes individual and corporate income taxes paid to Virginia Tax. All income tax filing deadlines remain the same, including the May 1, 2020 individual income tax filing due date. Late payment penalties will not be charged if payments are made by June 1, 2020. However, interest will still accrue, so if you can pay by the original filing due date, you should. 

Washington: Revenue will work with businesses that cannot file or pay their taxes on time due to the COVID-19 outbreak. Businesses can request an extension or penalty waiver by sending a secure email in their My DOR account or by calling Revenue’s customer service staff at 360-705-6705, Monday through Friday 8 a.m. to 5 p.m.

Wisconsin: Both federal and Wisconsin income tax payment and return due dates are automatically extended to July 15, 2020. Wisconsin law will automatically extend time and waive interest and penalties for taxpayers due to a presidentially declared disaster



Some states are also closing their tax offices to the public. So far, closures and recommended alternatives include:

Alabama: The Department is asking taxpayers to limit in-person visits to the taxpayer service centers. Take advantage of the website for information and answers to your questions; use My Alabama Taxes (MAT) to file and pay taxes; or call 334-242-1170 to receive additional assistance.

Colorado:Offices are closed to the public through April 18. Help is available online.

Connecticut: The Connecticut Department of Revenue Services (DRS) is suspending walk-in services to the public at its four branch offices (Hartford, Bridgeport, Waterbury and Norwich), effective at the end of business Tuesday, March 17, 2020. All business with the DRS can be conducted electronically, by telephone, or by written correspondence.

Delaware: Delaware has temporarily closed all Public Service offices and discontinued face-to-face service throughout the state until further notice. All taxpayers are asked to utilize online services at Revenue.Delaware.gov to ensure that they remain compliant with all tax filing and payment obligations. If you are unable to find a solution through Revenue’s online services, please call our public service group at 302-577-8200, and we will provide you guidance.

Florida: All Department of Revenue offices in Florida are temporarily closed to the public at this time. Taxpayers adversely affected by COVID-19 are encouraged to send questions to COVID19TAXHELP@floridarevenue.com. Property taxpayers should contact their county property appraisers and tax collectors for information.

Georgia: Department of Revenue is temporarily suspending in-person services effective Monday, March 23, 2020. Taxpayers can conduct all business with the Department via online services, telephone, or designated secure lockbox locations.

Hawaii: DOTAX  offices are CLOSED to the public. Please use secure web messaging on Hawaii Tax Online or call us at (808) 587-4242 if you have questions or need assistance.

Illinois: Illinois Department of Revenue taxpayer phone system agents are currently unavailable. Taxpayers can still check the status of a refund, identify a PIN, or receive estimated payment information through our taxpayer assistance 800 number. During this time, a limited number of staff will also be monitoring and responding to emails.

Indiana: Effective March 18, 2020, all Indiana Department of Revenue customer walk-in centers will temporarily close for in-person assistance. Customers are encouraged to call or email DOR directly in addition to using available online services. Click here for more information.

Kansas: All Kansas Department of Revenue offices are closed March 23rd – April 6th.

Kentucky: The Kentucky Department of Revenue (DOR) will not receive walk-in customers for tax filing assistance, collections cases, or other tax-related issues. Previously scheduled appointments will be cancelled and rescheduled if possible. DOR representatives are available by phone or email. Taxpayer Service Center (TSC) locations and contact information may be found on the DOR Service Center page.  Please visit the Contact Us page for other DOR contact options.

Maryland: Comptroller Peter Franchot today announced that Taxpayer Services call center agents will no longer be staffing the 1-800-MD-TAXES phone lines following the close of business at 4:30 p.m. on Monday, March 23, 2020. Taxpayers must email their tax questions to taxhelp@marylandtaxes.gov. Response times may be affected as limited staff will be focused on processing tax returns and issuing refunds.

Massachusetts: All DOR tax (including Estate Tax walk-in service) and child support walk-in centers are closed until further notice. If you need assistance, please visit the DOR and CSE websites.

Maine:Maine Revenue Services (“MRS”) facilities at 51 Commerce Drive in Augusta will only be available to the public for purposes of accepting tax payments. MRS’ facilities at 135 Presumpscot Street in Portland continue to be closed to the public. Taxpayers seeking telephone assistance may still call MRS during normal telephone assistance hours from 9:00 a.m. to 4:00 p.m. All MRS telephone and email contact information is available at: www.maine.gov/revenue/contact.html. This includes the Taxpayer Service Center at (207) 624-9784 and the Property Tax Division at (207) 624- 5600. At this moment, MRS does not expect the COVID-19 situation to significantly impact tax return processing. 

Massachusetts: All DOR tax and child support walk-in centers are closed until further notice. If you need assistance, please visit the DOR and CSE websites.

Nevada:All Taxation offices will be closed to the public. All taxpayers are advised to file and pay their taxes through the online portal, mail or via drop box at the Taxation offices.

New Jersey: Beginning on March 18th and continuing at least through March 31st, all walk-in services at Division of Taxation regional and Trenton offices will be closed to the public as a precaution to safeguard public health. We anticipate reopening on April 1st. Call centers and email servicing remain operational for any inquiries. Please visit the “Contact Us” tab on the homepage for additional information.

New Mexico: All New Mexico Taxation and Revenue district offices are now open on an appointment only basis. Appointments at district offices can be made through the phone or email. As always, the Department’s online services remain available at tax.newmexico.gov.

North Carolina: NCDOR Service Centers remain closed to the public. Taxpayers are encouraged to utilize online and phone services to the greatest extent possible. Call 1-877-252-3052 for assistance.

Ohio: Effective immediately, the Ohio Department of Taxation has closed its walk-in center due to Coronavirus concerns.

Pennsylvania: The Department of Revenue’s offices and customer service call center are currently closed. That means anyone visiting a Revenue district office or trying to call the department over the phone will not be able to reach a representative at this time. Find Revenue phone numbers and answers to common tax questions: www.revenue.pa.gov

South Dakota:Due to the Governor’s executive order, Revenue offices will be closed until March 23rd. Staff is available via chat or at 800-829-9188 to answer your questions.

Tennessee: The Tennessee Department of Revenue is not currently receiving walk-in customers at our Jackson, Cookeville, and Shelbyville offices. Walk-in service remains available at our Memphis, Nashville, Knoxville, Chattanooga and Johnson City locations. Phone assistance is available at our Taxpayer Assistance Hotline 615-253-0600 or Tax Practitioner Hotline 615-253-0700, online at Revenue Help, or by email revenue.support@tn.gov

Texas:Texas Enforcement Offices have reduced staffing and modified the configuration of waiting areas. Because this may result in longer in-person wait times, we strongly encourage you to use our online services below. Use Webfile to file and pay certain taxes electronically. 

Utah: Due to a significant earthquake, the Utah State Tax Commission’s main office in Salt Lake City is closed until further notice. The Ogden, Provo and Hurricane offices remain open. Phone and email services statewide are closed until further notice. Our online services such as Taxpayer Access Point (TAP) remain functional.

Washington: All DOR offices are temporarily closed to the public. Call center agents are available to assist by phone or chat. Contact.


Please understand that this situation is changing rapidly, and I’m posting information as quickly as I can confirm it. I’ve included links to Revenue websites, where possible. Please check with Revenue (and local government) websites and your tax professional for more information or if you have questions.

Check back regularly: I’ll continue to update you as information becomes available. If you have an update or tip, here’s how to reach me (including secure methods).

$8.41. That was how much 83-year-old Uri Rafaeli, a retired engineer, in Michigan underpaid his property taxes by in 2014. That was all it took for him to lose his house.

Rafaeli bought a 1,500-square-foot Southfield home in 2011. He paid $60,000 for the property, and the deed was recorded by the Oakland County Register of Deeds on January 6, 2012. He put additional money into the home, too, as he intended to use the rental income from the property to fund his retirement.

Rafaeli believed that he was paying his property taxes on time and in full, but in 2012, he received notice that he had underpaid his 2011 tax bill by $496. He paid up in 2013 but made a mistake figuring the interest (interest also accrued while his check was in the mail): He was short by $8.41. 

In response, Oakland County seized his property and put it up for sale. The home netted just $24,500 at auction; according to Zillow, the property is now estimated to be worth nearly $130,000.

The County kept the overage from the auction: $24,215 in profits, or 8,496% of the actual tax, penalties, and interest due (the debt had grown to $285 with penalties, interest, and fees).

It was all legal. 

Under Act 123 of 1999, Michigan allows its county treasurers a great deal of authority to handle unpaid taxes, including rushing the tax foreclosure process. Under the Act, the property is considered delinquent if taxes aren’t paid in the previous year. If the outstanding taxes, fees, and penalties remain unpaid after two years, the County can foreclose on the property; that’s much more quickly than before when the average timeframe to move a foreclosure was five to seven years. Shortly after foreclosure, the former owner loses the right to buy back the property, and the County becomes the owner. At the sale, the funds belong to the County. There’s no requirement to refund any of the proceeds to the owner even if the overage far exceeds the amount owed.

Rafaeli—and his lawyers—think that’s wrong. They took the matter to the U.S. District Court for the Eastern District of Michigan. The court found that Rafaeli—and a similarly situated plaintiff—suffered “a manifest injustice that should find redress under the law” but dismissed the claim for lack of jurisdiction. 

Rafaeli tried again. He didn’t argue that he didn’t owe tax, penalties, interest, and fees. But he did object to the County taking the excess. The County argued that Rafaeli had no rights to the equity because the General Property Tax Act does not expressly protect it. And that’s the reason that Rafaeli keeps losing: The courts have sympathy for his plight but have found that the law does not prevent the County from keeping it.

He’s not alone. Tens of thousands of properties in Detroit have been subject to the same kind of treatment. Many of those who owe taxes understand that they have a debt, but they don’t necessarily understand how to navigate the process or what the failure to pay on time can mean. As with Rafaeli, even something as simple as miscalculating the interest due can have serious consequences.

Today, Rafaeli is represented by the Pacific Legal Foundation (PLF). PLF was founded in 1973 by members of then-governor Ronald Reagan’s staff as the first public interest law firm dedicated to the principles of individual rights and limited government. PLF is taking the case to the Michigan Supreme Court, arguing that keeping the funds is an unjust taking. If he wins, Rafaeli—and other landowners in similar situations—may be entitled to compensation.

According to PLF, the entire process, as it is happening now, is nothing more than government-sanctioned theft. “Predatory government foreclosure particularly threatens the elderly, sick, and people in economic distress,” PLF argued on its website. “It could happen to your grandparents. It could happen to you.”

Last year, Ohio made news as the first state in the nation to accept tax payments using cryptocurrency. Less than a year later, the program has been suspended after accusations that it wasn’t properly vetted.

The program was initially hailed as a model for the rest of the country. Under the terms of the program, if you operated a business in the State of Ohio, you could register at OhioCrypto.com to pay your taxes. The cryptocurrency payments were processed by a third-party payment processor, BitPay, and immediately converted to dollars before being deposited into a state account. 

(You can read more about the program here.)

That system, according to a new opinion from State Attorney General Dave Yost, was part of a number of potential failings with the program, including a failure to bid it out.

Today, the website at OhioCrypto.com remains shuttered. A notice advises:

It reads: 

OhioCrypto is currently suspended. More information can be found by clicking here. If you have questions, please email OhioCrypto@tos.ohio.gov.

Clicking through leads you to back to the Treasurer’s Office’s site, which offers further details on the takedown.

The program was touted as a game-changer by former Treasurer Josh Mandel. Mandel was elected Ohio Treasurer in 2010. He ran an unsuccessful Congressional campaign against Senator Sherrod Brown in 2012. He was re-elected as Treasurer in 2014 and made plans to again challenge Brown in 2018. He abruptly pulled out of that race last year and left the Treasurer’s office after his term ended in January 2019.

His successor, Robert Sprague, asked the Ohio Attorney General for a formal opinion on whether the payment method facilitated by the program’s third-party processor constitutes a “financial transaction device” under Ohio law. If it did, then by law (Ohio Revised Code §113.40), the contract for the processor must go through a formal procedure that includes approval from state officials and a request for bids from at least three financial institutions. 

The Attorney General did take a look at the program. He found that OhioCrypto.com met the legal definition of a “financial transaction device.” Yost also found that the use of the program was not permitted, claiming that existing state law doesn’t extend to OhioCrypto.com. Yost said the process was basically akin to a currency exchange, finding, “The Treasurer’s use of a payment processor to convert cryptocurrency into dollars for the payment of taxes is not authorized, expressly or impliedly, by statutes allowing the receipt of electronic payments.”

(To read Yost’s opinion, which downloads as a PDF, click here.)

Sprague said, about the findings, “It is vital that Ohio explores innovative, new technologies and processes that continue to drive Ohio into the future. However, we must make sure any new processes that are implemented, such as OhioCrypto.com, are established in accordance with Ohio law.”

Sprague also noted that the program had not been popular: The state accepted fewer than ten payments.

Mandel has not commented on the suspension of the program. Earlier this year, without comment, Mandel deleted all posts on his Twitter and Facebook accounts. He also set his Twitter account to private. 

If you made a purchase on the internet yesterday, you might have noticed something different: sales tax. Changes in sales tax compliance laws for remote sellers and marketplace facilitators in more than a dozen states kicked in beginning October 1, 2019. More than 40 states have tweaked their sales tax laws since a 2018 Supreme Court Ruling.

That ruling in South Dakota v. Wayfair, Inc., Overstock.com, Inc., and Newegg, Inc. —sometimes just referred to as Wayfair—focused on whether physical presence requirement for sales tax should stand. The idea that you could only impose sales tax on sales where a retailer maintained a physical presence in a state had previously been established in National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U. S. 753 and was affirmed in Quill Corp. v. North Dakota (91-0194), 504 U.S. 298 (1992). But the advent and growth of internet sales complicated the issue: When Quill was decided fewer than 2% of Americans had access to the internet. As states pushed to expand sales tax requirements to online sales, retailers pushed back. That led to what’s been called the “tax case of the millennium.” In Wayfair, the Supreme Court essentially killed Quill, ruling that states have broad authority to require online retailers to collect sales taxes.

(You can read more on Wayfair here. You can read the majority opinion, together with the concurring opinions and the dissent, which downloads as a PDF, here.)

Scott Peterson, vice president of U.S. Tax Policy at the tax compliance software firm, Avalara, explains that the changes affect two targets: remote sellers and marketplace facilitators. 

Remote sellers are precisely what they sound like on the tin: out-of-state sellers. As of October 1, 2019, the laws changed in seven states to require remote sellers to charge sales tax subject to specific criteria. They are:

  • Arizona: Economic nexus and law kicks in with sales only threshold of starting at $200,000 in 2019; the threshold decreases over time to $150,000 in 2020 and $100,000 in 2021 and beyond
  • Kansas: Economic nexus law kicks in with no threshold (in other words, there’s no small seller exception)
  • Massachusetts: Changes from cookie nexus to full economic nexus with a $100,000 threshold
  • Maryland: Economic nexus extended to certain tobacco taxes
  • Minnesota: Economic threshold for remote sellers changed to $100,000 or 200 transactions (used to be ten or more retail sales totaling $10 or 100 transactions)
  • Tennessee: Economic nexus threshold of $500,000 becomes effective; the optional uniform local rate of 2.25% goes away (specific local sales tax rate in effect for city or county jurisdiction into which the sale was shipped or delivered must be used)
  • Texas: Economic nexus threshold of $500,000 becomes effective; there is also an option for single local use tax rate for sales in the state (as opposed to using the rate in each sales tax jurisdiction)

Marketplace facilitators are those consolidated sites like Amazon Marketplace that make it possible for smaller retailers to reach a broad audience without the need for a separate sales platform. As of October 1, 2019, the laws changed in 14 states to require marketplace facilitators to charge sales tax, often subject to criteria. They are:

  • Arizona: Marketplace facilitator law with a threshold of $100,000
  • California: Marketplace facilitator law with a threshold of $500,000 
  • Colorado: Marketplace facilitator law with a threshold of $100,000 
  • Maine: Marketplace facilitator law with a threshold of $100,000 or 200 transactions 
  • Massachusetts: Marketplace facilitator law with a $100,000 threshold
  • Maryland: Marketplace facilitator law has no dollar threshold but requires nexus
  • Minnesota: Marketplace facilitator law with $100,000 or 200 transaction threshold
  • Nevada: Marketplace facilitator law with $100,000 or 200 transaction threshold
  • North Dakota: Marketplace facilitator law with $100,000 or 200 transaction threshold
  • Ohio: Marketplace facilitator law with $100,000 or 200 transaction threshold
  • Oklahoma: Marketplace facilitator law with $10,000 threshold (can collect or comply with use tax reporting requirements)
  • Texas: Marketplace facilitator law has no dollar threshold
  • Utah: Marketplace facilitator law with $100,000 or 200 transaction threshold
  • Wisconsin: Marketplace facilitator law with $100,000 or 200 transaction threshold

With those changes, of the 45 states that have a general sales tax, 43 have now adopted an economic nexus law or rule since Wayfair. According to Peterson, two states, Florida and Missouri, have general sales tax but no economic nexus—yet. 

These changes, which feel like they are coming at a rapid-fire pace, can be challenging for retailers. Sellers need to figure out which laws affect them, and that means accounting for sales by state (and in some states, tracking by jurisdiction). That can make tax compliance burdensome for some sellers, especially small-to-midsize businesses. This was a concern raised in Wayfair, which caused Justice Kennedy to note, “These issues are not before the Court in the instant case; but their potential to arise in some later case cannot justify retaining this artificial, anachronistic rule that deprives States of vast revenues from major businesses.” [emphasis added]

Those words were considered as a signal that Wayfair, Part II, might eventually find its way into the courts. For now, sellers are considering other options. Some are pushing for more favorable legislation. Others, according to Peterson, are getting rid of their websites and selling directly on the marketplace since those larger companies tend to be better situated to collect and remit tax. Marketplace facilitators also get a little grace from the tax authorities: While remote sellers are expected to comply immediately, all states except one with marketplace facilitator laws allow up to three years to become 100% compliant (through phase-ins). The presumption, Peterson says, is that the marketplaces aren’t going to get it right.

So how do you know if you’re getting it right? Peterson suggests that sellers reach out to their tax professionals to make sure that they’re following the rules. If you use software, make sure that it’s tracking the right kinds of sales and in the right places. Ask questions, he says. Even those as basic as “What is a transaction?” can make a difference in whether you have to collect sales tax in some states.

It turns out that there is such a thing as too much SALT. U.S. District Judge J. Paul Oetken has dismissed a lawsuit filed by four states to strike down the cap on state and local tax (SALT) deductions under the Tax Cuts and Jobs Act (TCJA).

The lawsuit was filed in July of 2018 by four states in response to the cap on SALT deductions under the TCJA. Under the TCJA, the amount that taxpayers may claim on Schedule A for all state and local sales, income, and property taxes together may not exceed $10,000 ($5,000 for married taxpayers filing separately). Previously, there were no limitations on the amount of taxes that taxpayers could claim on Schedule A, though some taxpayers faced reduced itemized deductions due to the alternative minimum tax (more on the AMT here) and Pease limitations (more on those here). The TCJA changed that, slapping a cap on SALT deductions beginning in the 2018 tax year.

The four states, Connecticut, Maryland, New Jersey, and New York, were seeking “declaratory and injunctive relief” to eliminate the cap. What that means is that the states asked the court to declare that the cap was not enforceable; there was no separate request for money or other damages.

(More on the lawsuit here.)

New York Attorney General Barbara Underwood, said in a press release introducing the lawsuit, “This cap is unconstitutional — going well beyond settled limits on federal power to impose an income tax, while deliberately targeting New York and similar states in an attempt to coerce us into changing our fiscal policies and the vital programs they support.”

However, Judge Oetken found that the states did not prove that the SALT cap was unconstitutional. He noted that “[t]he States are correct that the SALT cap is in some ways unprecedented” since “the availability of an uncapped deduction for state income and property taxes (albeit not for state sales taxes) has been a mainstay of the federal income tax since that tax’s earliest inception.” But novelty isn’t fatal – at least not in the context of constitutional law. And, Judge Oetken wrote, “the States have failed to persuade the Court that this novelty alone establishes that the SALT cap exceeds Congress’s broad tax power under Article I, section 8 and the Sixteenth Amendment.”

In answer to the states’ coercion arguments, Judge Oetken wrote, “As an initial matter, this Court declines to speculate on Congress’s motives in passing the SALT cap.” However, he notes that even assuming that the states are right, “an otherwise valid federal law does not offend the Constitution simply because it seeks to affect state policies.” The Court cited South Dakota v. Dole, 483 31 U.S. 203 (1987), a Supreme Court involving underage drinkers. In Dole, the State of South Dakota sued the federal government for withholding federal highway funds from states which allowed those under the age of twenty-one years to possess and drink alcohol. At the time, South Dakota allowed those who had turned 19 years old to buy beer containing up to 3.2% alcohol. The federal government should not, the state argued, be allowed to tie the receipt of federal funds to conditions which are not related to federal law (there is no national minimum drinking age) and steps on the toes of the states. The Court, with Chief Justice Rehnquist writing for the majority, held that indirect “encouragement” of state action to obtain uniformity in the States’ drinking ages is a valid use of the spending power under the Constitution.

Judge Oetken did, however, keep at least one door open for taxpayers. While he dismissed the states’ assertion that this was an assault on their sovereign interest, he also made it clear that “the States have disclaimed any intent to invoke the rights of their citizens.” In saying so, however, he drew a distinction between the rights of the states and individual taxpayers, noting that “It may well be the case that the States’ taxpayers will have incentive to challenge the SALT cap in individual refund suits.”

You can read the opinion here.

So where do the states go now? The next logical step is Congress since they created the SALT caps (that’s already being talked about: click here for more). But don’t rule out more litigation: A lawsuit filed by three states (New York, New Jersey, and Connecticut) to protect SALT cap workarounds is still pending. In June of 2019, the IRS issued additional guidance on SALT cap workarounds. The direction mostly puts an end to the benefits of those workarounds aimed at mitigating the consequences of SALT caps following the Tax Cuts and Jobs Act (TJCA).

The case is State of New York, State of Connecticut, State of Maryland and State of New Jersey v. Steven T. Mnuchin et al (S.D.N.Y., Civil Action No. 18-cv-6427, July 17, 2018).

Nobody likes getting a tax bill in the mail. It’s especially concerning when your tax bill is a bit higher than you anticipated. But what happens when it’s hundreds of millions of dollars more than you were expecting? Just ask Donna Smith from Aurora, Colorado. Smith, a part-time worker at a local thrift store, got quite the surprise when she opened a tax bill from the Colorado Department of Revenue to find that the state claimed she owed $216,399,508 in taxes.

Smith, who makes about $10 an hour, couldn’t understand the tax bill. To put the amount in perspective, it’s nearly a quarter of the City of Aurora’s entire budget for the year (report downloads as a PDF).

Smith’s returns are self-prepared, of sorts. Her mother, Diana Valencia, prepared Smith’s tax return for 2018 and couldn’t understand what happened. She told 9News that she went back to check the return, saying, “I mean, I thought, ‘Wow, was that an error on my part?’”

It was an error – but not on Valencia’s part. Valencia used TurboTax to prepare the return. According to the Colorado Department of Revenue (DOR), the TurboTax software made an error tied to Smith’s federal taxable income. 

A spokesperson from TurboTax confirmed the error, saying, “For a small number of TurboTax online customers that filed their taxes between June 13-16, there was an issue that caused select fields on their tax return to be incorrectly transmitted during e-file. The issue was quickly fixed and we have been working directly with affected Colorado taxpayers and the Colorado State DOR to help resolve.” If you were affected by the billing error and aren’t currently working to resolve the matter, you should contact the Department of Revenue at (303) 866-4622 to reach a citizen’s advocate.

The Colorado DOR pegged the number of affected taxpayers at 44. That doesn’t mean, however, that a few dozen taxpayers received multi-million dollar tax bills. According to Daniel Carr, Taxation Communications Manager at the Colorado DOR, that number represents taxpayers who encountered the same glitch using TurboTax software during a three-day window in June of this year. “What the taxpayer entered into TurboTax was correct,” Carr said, explaining that “an error in the TurboTax transfer reported incorrect amounts to the State of Colorado.” 

The bills went out, explains the DOR, because “[o]n our end it was simply data in data out and we could only process what we were given by TurboTax. We cannot determine the accurate amounts based on the information provided.”

Once the errors were discovered, however, the DOR worked with affected taxpayers. “We have reached out to all of the taxpayers affected and are helping them resolve this issue,” says Carr.

That doesn’t mean that the taxpayers don’t have work to do. According to Carr, “Taxpayers, in this case, who kept a copy of what they submitted are able to send us that copy and we will correct the error. Otherwise, they would have to amend their return.”

Mistakes happen all of the time – just maybe not quite this big. No matter the size of the return, taxpayers can protect themselves, Carr advises, by always keeping a copy of filed returns. And if the bill seems out of place? “Contact the Department of Revenue immediately to have it resolved.” 

Don’t ignore the problem. That’s good advice for all taxpayers, no matter whether the bill is federal, state or local. In most cases – even when the bill is hundreds of millions of dollars – errors are totally fixable. But don’t wait and hope that it goes away: it’s important to reach out to the respective tax authorities to clear up any problems as soon as possible.

(For more on how to fix a mistake on your return, click here.)

As part of the Tax Cuts and Jobs Act (TCJA), Congress capped the amount of state and local taxes (SALT) that taxpayers can deduct on their federal returns. Taxpayers who were impacted complained that they were unfairly targeted, and some scrambled to find ways to protect the deduction (including filing lawsuits to protect workarounds). Now, those concerns are going back to Congress as Democrats on the House Ways and Means Committee have promised to revisit the cap on SALT deductions.

If that feels like déjà vu all over again, it is. In June of 2019, the Select Revenue Measures Subcommittee held a hearing on the matter. One of the issues raised at that time tackled an oft-cited statement that the SALT deduction primarily benefits higher-income taxpayers. In 2018, the Joint Committee on Taxation reported that 22% of taxpayers who claimed the SALT deduction in 2017 (before the impact of the TCJA) reported more than $200,000 in income. 

(You can view the report which downloads as a PDF here.)

However, House Ways and Means Select Revenue Measures Subcommittee Chairman Mike Thompson (D-CA) argued in June that looking at the numbers of affected taxpayers alone was shortsighted, adding, “Although the direct benefits of the SALT deduction primarily fall to upper-income taxpayers, the deduction supports state and local government budgets, whose expenditures support programs with widely-shared benefits, like public schools, infrastructure, first responders, and health care programs.

(You can read Chairman Thompson’s opening statement as prepared for delivery in full here.)

Testimony offered at the hearing included the Mayor of Falls Church, Virginia, David Tarter, who disputed the notion that the cap only affected high-income taxpayers, suggesting instead that the cap targeted high cost of living areas. He told the subcommittee that “[t]here are no yachts in Falls Church, just lots of hard-working families trying to get by in the high rent district. Most of the folks that I know are two-income families who serve their country through work in government or the military and want the best education possible for their children.”

The impact of the SALT caps, Tarter claims, echoing Chairman Thompson, has been felt by state and local governments. “What does that mean?” he asked. “It means that tax dollars that could have gone to the city are now going to the federal government, and there is less money available for essential local services, like schools, police, and fire protection.”

(You can read Mayor Tarter’s testimony which downloads as a PDF here.)

Despite those pleas, repealing the SALT cap before 2025—when it’s slated to disappear—isn’t politically likely. However, opponents of the SALT cap are hoping that alternative plans could gather steam. One suggestion is to replace the SALT cap with a cap on all itemized deductions. In other words, instead of limiting the SALT deduction, the total deductions claimed on Schedule A, including SALT, charitable contributions and home mortgage interest, would be restricted to a fixed amount. That kind of cap would be similar to the pre-TCJA Pease limitations imposed on high-income taxpayers; under the TCJA, those are suspended for the tax years 2018 through 2025.

(You can read more about Pease limitations here.)

For now, SALT deductions remain at the same levels. The amount that you can claim for all state and local sales, income and property taxes together cannot exceed $10,000, and the limit is not adjusted for inflation. There’s also no adjustment based on marital status: single and married taxpayers are limited to the same $10,000 deduction (except for married taxpayers filing separately, who are limited to $5,000).

It’s worth noting that state, local and foreign property taxes, and sales taxes which are deductible on Schedule C, Schedule E or Schedule F are not capped. This means that, for example, rental property—even if held individually and not in a separate entity—remains deductible and not subject to these limitations.

Ready for back to school shopping? According to the National Retail Federation’s annual survey conducted by Prosper Insights & Analytics, total spending for K-12 schools and college reached $82.8 billion in 2018, nearly as high as 2017’s $83.6 billion. With those expenses looming, parents are often looking for opportunities to save some cash. One of the ways that they do it? Sales tax holidays.

Here’s a look at states offering taxpayers a break on sales tax for back-to-school items this year:

  • Alabama (July 19-21) Exemptions apply to purchases of clothing ($100 or less per item), computers (single purchase up to $750), school supplies, art supplies or school instructional materials ($50 or less per item) and books ($30 or less per item). Not all counties and municipalities are participating, so check the state link for a list of participating locations.
  • Arkansas (August 3-4) Exemptions apply to purchases of clothing and footwear ($100 or less, per item), clothing accessories ($50 or less per item), school supplies, art supplies, and school supplies. All retailers are required to participate and may not charge tax on items that are legally tax-exempt during the Sales Tax Holiday.
  • Connecticut (August 18-24) Exemptions apply to purchases of clothing and footwear ($100 or less per item), excluding clothing accessories, protective or athletic clothing, and some shoes including ballet, bicycle, bowling, cleats, football, golf, track, jazz, tap and turf (but note that aerobic, basketball, boat and running shoes are exempt).
  • Florida (August 2-6) Exemptions include clothing, shoes, wallets, handbags, and backpacks that cost $60 or less. Computers that cost less than $1,000 and school supplies, such as pens, pencils, binders and lunch boxes that cost less than $15 are also included.
  • Iowa (August 2-3) Exemptions apply to purchases of clothing or footwear (up to $100 per item); for any item that costs $100 or more, sales tax applies to the entire price of that item.
  • Maryland (August 12-18) Exemptions apply to purchases of clothing and footwear ($100 or less per item), including sweaters, shirts, slacks, jeans, dresses, robes, underwear, belts, shoes and boots priced at $100 or less. Accessories, including jewelry, watches, watchbands, handbags, handkerchiefs, umbrellas, scarves, ties, headbands and belt buckles will remain taxable, as will special clothing or footwear designed primarily for protective use and not for normal wear, such as football pads.
  • Mississippi (July 26-27). Exemptions apply to purchases of clothing and footwear ($100 or less per item regardless of how many items are sold at the same time); accessory items such as jewelry, handbags, wallets, watches, backpacks and similar items are not included. Footwear does not include cleats and items worn in conjunction with an athletic or recreational activity.
  • Missouri (August 2-4) Exemptions apply to purchases of clothing ($100 or less per item), school supplies ($50 or less per purchase), computer software ($350 or less), personal computers or computer peripheral devices ($1,500 or less) and graphing calculators ($150 or less). Some cities have opted not to participate (check the website for specifics), although in those circumstances the state’s portion of the tax rate (4.225%) will remain exempt.
  • New Mexico (August 2-4) Exemptions apply to purchases of footwear and clothing, excluding accessories ($100 or less per item); school supplies ($30 or less per item); computers ($1,000 or less per item); computer peripherals ($500 or less per item); and book bags and backpacks ($100 or less per item).
  • Ohio (August 2-4) Exemptions apply to purchases of clothing ($75 or less per item). Note that the exemption applies to clothing selling for $75 or less. If an item of clothing sells for more than $75, the tax is due on the entire selling price. Exemptions also apply to school supplies ($20 or less per item) and instructional materials ($20 or less, per item).
  • Oklahoma (August 2-4) Exemptions apply to purchases of clothing and footwear ($100 or less per item). The exemption does not apply to the sale of any accessories, special clothing or footwear primarily designed for athletic activity or protective use that is not normally worn except when used for athletic activity or protective use, or to the rental of clothing or footwear. Qualified items are exempt from state, city, county, and local municipality sales taxes.
  • South Carolina (August 2-4) Exemptions apply to a variety of back-to-school essentials, from clothing, accessories, and shoes to school supplies, backpacks, and computers. Shoppers will also find tax-free items for the home and dorm room.
  • Tennessee (July 26-28) Exemptions apply to purchases of clothing ($100 or less per item), computers ($1,500 or less) and school and art supplies ($100 or less per item). Apparel that costs more than $100 remains taxable, as do items such as jewelry, handbags, or sports and recreational equipment.
  • Texas (August 9-11) The law exempts most clothing, footwear, school supplies and backpacks priced under $100 from sales and use taxes from a Texas store or from an online or catalog seller doing business in Texas.
  • Virginia (August 2-4) Exemptions apply to purchases of clothing and footwear ($100 or less per item) and school supplies ($20 or less per item). Sports or recreational items are not exempt from tax. The holiday also applies to hurricane and emergency preparedness items, and Energy Star™ and WaterSense™ products.

(A handful of states which offered a sales tax holiday in 2018 have not yet confirmed a 2019 date.)

Keep in mind that some states have no statewide sales tax (Alaska, Delaware, Montana, New Hampshire, and Oregon) while others (like Pennsylvania and Vermont) already exempt some necessities like clothing. Still, others offer special exemptions for hurricane supplies, Energy Star appliances, and other items. This list is meant to provide general guidelines for state sales tax holidays. Some states are pretty specific about what you can exempt so be sure to click on the links to your individual state’s revenue announcement for more details. Also keep in mind that some states offer counties and towns the option not to participate, so again, check with your state if you have questions.

I’ll continue to update the list as information is made available (feel free to reach out to me with changes or updates that you notice). Happy shopping!

If you’re planning a trip this holiday week, don’t forget to figure in the cost of gasoline. Drivers in some states will feel a pinch in their wallets as gas taxes increase beginning today.

The largest jump will be felt in Illinois where the state gas tax will double to 38 cents per gallon (up from 19 cents per gallon). A couple of states over, drivers in Ohio will also pay more, with an increase of 10.5 cents per gallon.

Less dramatic increases will be felt in California (an increase of 5.6 cents per gallon), where drivers pay more for gas than any other state. Price creeps will also be felt in South Carolina (an increase of 2 cents per gallon) and Tennessee (an increase of 1 cent per gallon).

States often change their rates to meet budget gaps and to pay for infrastructure projects. In 2017, a whopping seven states raised their prices – including South Carolina. This year’s boost in gas taxes in the Palmetto State is part of the state’s Roads Bill which took effect in 2017.

State gas taxes may be volatile, but the current federal gas tax rate is 18.4 cents per gallon (24.4 cents per gallon for diesel), a rate that hasn’t changed since 1993. President Trump signaled in 2017 that he would be amenable to a boost to the federal gas tax to pay for federal infrastructure projects, including rebuilding deteriorating roads, but there’s been no movement on the issue. 

With the federal gas tax rate remaining at 18.4 cents per gallon, you need only figure in the cost of your state gas tax. Fortunately, there’s no math involved on your part: the cost per gallon at the tank includes the taxes. That formula looks like this:

$.184 in federal gas + state taxes + the cost of gas = what you pay per gallon

The final result can vary wildly, depending on where you live. As of today, AAA says that gas is most expensive in these states:

  1. California ($3.755)
  2. Hawaii ($3.637)
  3. Washington ($3.353)
  4. Nevada ($3.311)
  5. Alaska ($3.258)
  6. Oregon ($3.227)
  7. Idaho ($3.007)
  8. Utah ($2.983)
  9. Pennsylvania ($2.915)
  10. Illinois ($2.885)

It’s least expensive in these states:

  1. Mississippi ($2.324)
  2. Alabama ($2.333)
  3. Louisiana ($2.343)
  4. Arkansas ($2.356)
  5. South Carolina ($2.373)
  6. Tennessee ($2.416)
  7. Missouri ($2.418)
  8. Texas ($2.420)
  9. Oklahoma ($2.425)
  10. Virginia ($2.454 )

You can check out the average price of gas in your state – and how prices compare to neighboring states – here.

Despite those tax increases, the price of gas still remains relatively low across the nation – down about 13.5 cents per gallon from the same time last year. Today’s national average, according to AAA, is $2.717.