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This site is the inspiration of a former reporter/photographer for one of New England's largest daily newspapers and for various magazines. The intent is to direct readers to interesting political articles, and we urge you to visit the source sites. Any comments may be noted on site or directed to KarisChaf at gmail.

Monday, February 10, 2014

Congress needs to stop state tax shakedowns -- By Michael Barone, The Washington Examiner


Photo - According to congressional testimony by owners of trucking companies and the American Trucking Associations, beginning around 2000, revenue agents from New Jersey's department of taxation began waylaying trucks, demanding that the owners pay at least Jersey's $1,100 minimum corporate-franchise tax before letting the drivers proceed. (Thinkstock)The Manhattan Institute's Steven Malanga in City Journal has an article titled “The State Tax Grab” on how states -- especially New York, New Jersey, California, Massachusetts and Michigan--have been extending their tax reach beyond all reasonable bounds. Here is one example, from New Jersey:
Until recently, one of the most aggressive — and, to businesses, infuriating — assertions of tax nexus took place in New Jersey. According to congressional testimony by owners of trucking companies and the American Trucking Associations, beginning around 2000, revenue agents from New Jersey’s department of taxation began descending on truck stops, weigh stations, and loading docks and waylaying trucks, demanding that the owners pay at least Jersey’s $1,100 minimum corporate-franchise tax before letting the drivers proceed. Many of the vehicles — about 40,000 have been stopped — worked for companies with zero connection to New Jersey, other than making a pickup or delivery there. New Jersey was, in essence, charging a $1,100 entry fee into the state.
 As Malanga points out, such tax-grabbing is probably prohibited by Article I, Section 8, Clause 3 of the Constitution giving Congress power to regulate interstate commerce. But small businesses socked with such taxes often choose to pay up rather than bear the expense of litigation. Congress could act to stop such tax-grabbing, but as Malanga shows it has been dithering instead.

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