COST Ranks States on Sales Tax Administration
COST, the Council on State Taxation, has published a study that rates all the 45 sales tax states on aspects of their sales tax administration and, to an extent, also on the structure of their sales tax laws. States are given demerits for their failings in administration, audit, and rules on payment, as well as the taxation of business inputs and burdens associated with local taxes. The best states are Indiana, Michigan, Ohio, and Wisconsin, while the worst are Colorado, Louisiana, and New Mexico. Colorado and New Mexico heavily tax business-to-business transactions, and Louisiana and Colorado allow burdensome local sales tax administrative regimes. The study is detailed, and based on surveys of both tax administrators and taxpayers. Karl Frieden, Fred Nicely, The Best and Worst of Sales Tax Administration, COST, Washington, DC, April 2018, available on-line here. Most of the states have a sales tax exemption for motor carrier rolling stock. However, these vary considerably in breadth, and many carriers wind up subject to the sales tax in states for their purchases of parts and repairs, among other things.
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Posted on Fri, June 1, 2018
by Rebecca Chappell