The State Tax Sequester Begins?
It's March 1st. The state tax sequester begins (just kidding; I think).
Did you know that sequester (as a verb) means to isolate or hide away?
Sequester (as a noun) means a general cut in government spending.
The way the federal government has been acting over the past several months (or forever), may make state governments want to sequester from the federal government. In fact, some states are proposing to do away with their income tax and replace the revenue with a broader sales tax on services.
In the context of sequester, states do annually decide what portions of the Internal Revenue Code to conform to or not conform to. As the federal government keeps debating what to do with taxes and government programs, states may be forced to conform even less. Unlike the federal government, state governments have to balance their budgets every year (just like you and me; of course we have debt; hopefully nothing like the federal government).
What do you think the states or your state will do, continue to do, or do differently as a result of the sequestration?
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at email@example.com.
Because state and local taxes are deceptively simple and endlessly complicated.