Improving Economy Brings More Funds to State Coffers
States across the US lost out on billions of dollars in valuable tax revenue over the past few years, but they’re now recouping a bit more as the economy starts picking up.
An improving economy combined with enhanced collection efforts led tax collection to increase by $62 billion for all 50 states in 2011. The US Census Bureau recently released data showing the severe revenue shortages stemming off.
Nine states increased tax collection by more than 10 percent. The highest states: North Dakota at 44 percent and Alaska at 22 percent. California’s tax collection rose 17 percent, edging out New Mexico and Illinois at 15 percent.
Some states, like North Dakota and Wyoming, owe part of their increased tax revenue to pumping out more oil. But other states, like Illinois, owe part of it to raising taxes.
Individual income tax collection rose in all but eight states to a combined total of $259 billion. Sales tax collection rose just over eight percent to a combined $240 billion, and corporate taxes rose by more than nine percent to just over $40 billion total.
But whether they raised oil production or tax rates, states are getting more serious about taxpayers paying up. As state coffers shrink, collection efforts expand to recoup revenue for budgets.
Wealthy taxpayers, corporations and cash-based businesses are typically prime targets for state tax authorities. Those in their cross-hairs can be the subject of an audit and find that they owe back taxes.
A tax attorney can help businesses and individuals from becoming the subject of an abusive tax audit and possibly obtain a favorable resolution deal. And although you may not be able to pump oil out of your backyard to pay a tax bill, with the right help you could be in a much better position to repay it.
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