I was born in the 1960’s, but not early enough in the 1960’s for people to shout “Ok, Boomer!” at me (even though someone recently did on Twitter). I do like many things that are retro, such as the old Hawaii Five-O (the new version is “meh”) and Classic Rock from the 1970’s. What I don’t like are new moves by tax authorities trying to impose retroactive taxes. In honor of my advancing years and obsession over retro culture, today’s Weekly Update has a unique retro spin.
A Developing Tax Problem in New York
When I was younger, I really enjoyed photography. I wasn’t very good at it, but I liked it. I also liked to buy cameras and accessories. Like most shutterbugs, I always looked forward to any discount or instant rebate I could find. Well, New Yorkers hoping to secure a holiday sale should brace themselves because Albany’s latest plan to pay for its staggering $6.8 billion budget deficit includes making Christmas discount sales a thing of the past. If a crazy multi-million dollar lawsuit filed by the Empire State’s attorney general Letitia James succeeds, prominent video equipment seller B&H will have to fork over millions of dollars for the crime of … giving discounts to its customers, and pay Albany sales tax on an imaginary sum, despite no customer ever paying it! For example, a camera may sell for $500 at list price, but with an instant rebate the camera is actually sold, and bought, for $250. The company paid the sales tax on $250, not $500 because, well, $500 never changed hands. The state of New York wants to retroactively collect the additional taxes, suing B&H for allegedly owing back payments to the state. Bureaucrats want $7 million from B&H, and once the company pays, the stage is set for more lawsuits targeting all sorts of companies catering to consumers. Because once they force one business to pay taxes on its countless rebates offered to consumers, the floodgates are open for the Department of Taxation and Finance to put the screws on other businesses throughout the state.
Most, if not all, people have benefited from companies offering “instant rebates” to bring down the price of our favorite products. Sellers offering plenty of goods and services, ranging from wireless coverage to air conditioning units to cameras, offer a dizzying array of rebates and promotions to get consumers in their stores. Let’s hope that can continue, and the attorney general spends her time focusing on actual crimes instead of Grinching consumers out of holiday savings.
The IRS Wants to Go Retro…And Not in a Good Way
No, we’re not talking bell-bottom blue jeans or long side burns. This “retro” idea is that the Internal Revenue Service (IRS) wants to retroactively raise taxes. When Congress passed the alternative fuel mixture credit (AFMC) into law in 2007, lawmakers hoped that incentivizing “clean” blends of fuel would be a cost-effective way to safeguard the environment. Over time, the number of companies claiming credits grew as inexpensive blends comprised of butane and gasoline became increasingly common. But when too many companies started claiming tax credits, the IRS ruled by executive fiat that the credit no longer applies to fuels such as butane. Even though the agency acknowledged that Congress had intended for these fuels to be covered by the tax credit, bureaucrats were simply losing too many taxpayer dollars to honor the provision. The IRS now wants to retroactively raise taxes on these companies. That’s right, these companies may now have to pay back taxes because the IRS changed its mind.
Despite the IRS’s brazen attempt to defy congressional intent, lawmakers may soon reinforce the agency’s actions by retroactively making fuels such as butane ineligible for the AFMC. If this tax increase is allowed to be retroactively applied, innovators would think twice before investing in the U.S. Suddenly, billions of dollars’ worth of investments based on tax code provisions could be clawed back by revenue-hungry bureaucrats, enforced by this deeply misguided legislation. Taxpayers and consumers deserve a stable, predictable tax code that respects previous investments made based on provisions that were law at the time.
If this retroactive tax is allowed to be collected, the precedent established would be dangerous and should concern everybody. The holiday season is no time to give taxpayers even more headaches!
Blogs:
Monday: Watchdog Slams Big Government “Compromise” on Surprise Billing
Tuesday: H.R. 19: The Good, The Bad, and The Ugly
Thursday: Watchdog Praises Congress for USMCA Agreement
Friday: Baby Yoda Shows Us the Force of Intellectual Property Rights
Media:
December 7, 2019: PJ Media quoted TPA in their story, “Dangerous PRO Act Would Give Illegal Workers More Rights than Americans.”
December 7, 2019: The Observer (New York, NY) ran TPA’s op-ed, “Baby Yoda Shows Us the Force of Intellectual Property Rights.”
December 9, 2019: The American Conservative ran TPA’s op-ed, “Taxpayers Cough Up For More F-35s The Pentagon Didn’t Ask For.”
December 9, 2019: ABC 33/40 (Birmingham, AL) mentioned TPA in their story, “Streetcar projects across the country struggle, cost taxpayers millions.”
December 10, 2019: Defense-Aerospace ran TPA’s op-ed, “Taxpayers Cough Up for More F-35s the Pentagon Didn’t Ask For.”
December 10, 2019: The Washington Examiner ran TPA’s op-ed, “Yes, arbitration is a free-market solution to surprise billing.”
December 11, 2019: TPA was mentioned in an op-ed published in Townhall titled, “POTUS Should Follow Florida, Not California, on Surprise Billing Fix.”
December 11, 2019: Townhall ran TPA’s op-ed, “If Congress Gets Its Way, Superbowl, Impeachment Vote May Be Blacked Out.”
December 11, 2019: The Orange County Register (Anaheim, CA) ran TPA’s op-ed, “FDA regulations are barring millions from life-saving drug access.”
December 11, 2019: The San Bernardino Sun (San Bernardino, CA) ran TPA’s op-ed, “FDA regulations are barring millions from life-saving drug access.”
December 11, 2019: The Daily Bulletin (Rancho Cucamonga, CA) ran TPA’s op-ed, “FDA regulations are barring millions from life-saving drug access.”
December 11, 2019: The Redlands Daily Facts (Redlands, CA) ran TPA’s op-ed, “FDA regulations are barring millions from life-saving drug access.”
December 11, 2019: The Daily Breeze (Torrance, CA) ran TPA’s op-ed, “FDA regulations are barring millions from life-saving drug access.”
December 11, 2019: The Press-Telegram (Long Beach, CA) ran TPA’s op-ed, “FDA regulations are barring millions from life-saving drug access.”
December 11, 2019: The San Gabriel Valley Tribune (San Gabriel, CA) ran TPA’s op-ed, “FDA regulations are barring millions from life-saving drug access.”
December 11, 2019: The Los Angeles Daily News (Woodland Hills, CA) ran TPA’s op-ed, “FDA regulations are barring millions from life-saving drug access.”
December 11, 2019: The Whittier Daily News (Whittier, CA) ran TPA’s op-ed, “FDA regulations are barring millions from life-saving drug access.”
December 12, 2019: WBFF (Fox, Baltimore) interviewed me about the USMCA.
December 12, 2019: The Epoch Times mentioned TPA in their story, “Coalition Mounts Last-Ditch Effort to Stop Extension of EV Tax Credit.”
Have a great weekend, and as always, thanks for your continued support.
Best,
David Williams
President
Taxpayers Protection Alliance
1401 K Street, NW
Suite 502
Washington, D.C. xxxxxx
www.protectingtaxpayers.org
