Roundup -- States Scramble for Tax Revenue

Many states are facing declining revenue due to the economic downturn. Incomes are falling and people are buying less limiting income and sales tax revenue. Real estate taxes are falling as well as home values decline. States are looking at making up these losses in a variety of ways. WRAL.com reports that in North Carolina the state is looking at Lowe's not paying sales taxes on items they sell and then install. If a customer buys the item and has someone else install it then full sales taxes are collected, but if Lowe's crew installs it there is no sales tax, just a general use tax on the installer. The state wants to make this practice not allowed to collect a few million more dollars in sales taxes. In California The San Francisco Chronicle reports the proposed budget deal will raise the sales tax, income tax, gas tax and vehicle license fee. Of course one of the effects of this budget would be to accelerate the leaving of California of businesses and taxpayers. In Massachusetts they are going to try and collect sales taxes on goods bought by that state's residents in New Hampshire. Massachusetts is now suing businesses in NH for not collecting the MA sales tax from its residents buying there. In New York the governor has proposed an 18% tax on soda and other "unhealthy" drinks. The New York Times writes though that this tax probably will not pass due to the public outcry over it. As states, and ultimately the Federal Government, gets more desperate to collect revenue to fund the increasing spending you will probably see other attempts like these proposals.