Life in California -- A Tax on a Tax
I just got a bill for some extra property tax I owe to a county in California. The story behind it is sad and sort of hilarious.
A year or two ago I got billed in an audit for some "California use tax" on some golf carts we moved to California from Arizona. I hadn't thought I owed use tax on them because I paid sales tax in Arizona where I bought them. But California sales tax is higher than that in Arizona (naturally) so I apparently owed use tax on the difference. OK, I paid it.
Then, just recently, I was informed by one county in California that my property tax reports were wrong. I reported the value of the gold carts based on what I bought them for but I did not include the California use tax in the value. That had to be added to their value (even though in actuality the use tax made them less valuable). Anyway, I got a tax bill for the property tax I owe on the value of the use tax I paid for carts, which in turn was based on the higher rate of sales taxes charged in California than Arizona. All because I actually moved business assets into California.
Won't make that mistake again! Over the last 5 years I have pulled nearly a half million dollars in business assets out of California, terminated 5 contracts, and laid off nearly 100 employees there -- all mostly due to the hostile business environment there.
Jim Collins:
WTF????
March 16, 2016, 1:46 pmme:
"gold carts", indeed.
March 16, 2016, 1:54 pmJohn O.:
And I do not blame you at all for fleeing California.
March 16, 2016, 2:45 pmSTW:
This type of thing has a long history. Several years ago (40?) California revamped the way sales tax was calculated on motor fuels. Buyers began paying sales tax on both state and local taxes. There was even an article in the newspaper about it. No one even questions it today because now "it's always been done that way."
March 16, 2016, 4:01 pmSamWah:
Cali really does give you an incentive to leave!
March 16, 2016, 4:39 pmsean2829:
Imagine buying cigarettes. The retail price includes at least a $2 per pack tax already and the tobacco settlement means that the state is also getting at least another dollar on top of that. So cigarette taxes are likely more than 60% of the cost and does the sales tax not get applied to that portion? Heck no. Are rich people paying these taxes. Again no,as cigarette smoking is much more common with the poor and middle class. Taxes on taxes has been around quite a while and is quite pervasive.
March 16, 2016, 6:52 pmCT_Yankee:
So this is why the same people who are so adamant that businesses are EVIL have not yet been able to cure unemployment? Step 1, make it damn near impossible to hire people due to the expense and paperwork. Step 2, make it damn near impossible to invest in equipment due to policies that cost so much there simply is no point in trying. Step 3, stare at that lot that has been empty for a generation, wondering why no one ever did anything with it.
March 16, 2016, 8:39 pmherdgadfly:
California is the only state in the union with Border Protection Agents that inspect what you are carrying into the state. You don't have to agree to be inspected but that is the only way to enter the state. There is a lesson there someplace.
March 16, 2016, 9:48 pmCraig Loehle:
The story about the goose and the golden egg was not supposed to be a user manual...
March 17, 2016, 7:36 amDaveK:
The government double-taxes all the time, especially in sales tax states. There are a lot of taxes imposed on things you buy (tires or gasoline, for example), but then imposes sales or other taxes on the full "cost" of what you are buying, including the various hidden taxes.
March 17, 2016, 8:27 amMark Creatura:
Vacant for a generation? Surely CT_Yankee exaggerates. Well, not necessarily. I recall that while I lived in Berkeley, about 1984, the business closed on the lot between my apartment and the UC campus. The location is directly across the street from the northwest corner of the university's main campus. Prime.
March 17, 2016, 9:39 amI've kept an eye on the spot, at least since I first heard of Google Maps. Checked this morning. Imagery from December 2015 shows cyclone fencing, a gate, gravel on the graded lot, and four parked cars. Have to agree that 31 years is a generation.
Must be bad luck.
Mike Powers:
Every time you buy a can of soda in California, you're charge a five-cent "deposit", and you pay tax on that five cents. Same deal with electronics (there's a "recycling fee") and, recently, wood (because, um, something sustainability something, apparently California is going to save the pine forests of Canada by charging me an extra ten cents to buy a two-by-four.)
Oh, fun fact, you can't *get* that deposit back. Recycling centers are permitted to pay you by weight, not by deposit, so when you bring in a can you get three cents for it and not five, because "you can't possibly expect us to count EVERY CAN that comes in here". Although somehow they can manage to count every can when it comes to them getting five cents for each one from the state government.
This is the same place that insists that because of Really Important Privacy Concerns they can't keep a record of who brings in copper wire. Like, the bum who walks in holding a torn-up piece of copper wire that's exactly the same kind that Caltrans uses to connect streetlights to the mains, they can't take his name and photo even though the streetlights in Silicon Valley have a mysterious tendency to have wires torn out of them.
March 17, 2016, 10:34 amArrian:
At least with cigarettes, the taxes are _intended_ to lower consumption. Of course, it apparently doesn't take much cognitive dissonance to understand this in one context but not in another.
March 18, 2016, 9:00 am