Episode Transcript
[00:00:05] Speaker A: Welcome, everyone, to taxing poetic. I am your host, Tim Howe, along.
[00:00:09] Speaker B: With your other host, Jenny Carter.
[00:00:12] Speaker A: Awesome. And as always, we got our producer, JB. What up, yo? How you doing? Pretty good. Right on, man. Enjoying your spring so far?
[00:00:19] Speaker C: Yes.
[00:00:20] Speaker A: Yeah. Backyard project going okay?
[00:00:22] Speaker C: I don't know.
Hopefully, by the time this episode's out, we're all hanging out back there, listening.
[00:00:28] Speaker A: To this episode and celebrating the fact that we're.
[00:00:31] Speaker C: What, a top 1% podcast now?
[00:00:33] Speaker A: I love that.
[00:00:35] Speaker B: What does that mean, top 1%?
[00:00:36] Speaker C: So, 90% of all podcasts stop after episode three. And then, of the ones that keep going, 90% of those stop before episode 21. So when you get to 21, you are now a top 1% podcast. And that's us. We did it, dude.
[00:00:51] Speaker A: We did it.
[00:00:52] Speaker B: I love being in the top 1%. You know, if only I could be in income, that would be great.
[00:00:57] Speaker A: Well, you got a long way to go, kid.
[00:01:00] Speaker B: I know.
[00:01:02] Speaker A: I think we all do.
That's all good. But, hey, today we are going to be covering some of the new sales tax laws or proposed legislation that's kind of peaking our interest in 2024. But as always, Jenny.
[00:01:16] Speaker B: Yes. For this. For today's haiku, in honor of all the sales tax legislation. Talking about new laws. Which is why we're having this episode.
So here we go.
New year, new tax laws. Also, a new album from the tortured poets.
[00:01:35] Speaker C: I thought you were gonna get Taylor Swift in there somewhere.
[00:01:37] Speaker A: I knew she was gonna drop the t swizzle reference.
[00:01:39] Speaker B: You can't talk about anything new these days without talking about Taylor Swift.
[00:01:43] Speaker A: And, dude, she blew everybody's mind. Cause it's like a two album set.
[00:01:46] Speaker C: Yeah, it was a lot of okay music.
[00:01:49] Speaker B: Oh, that's a hot take.
[00:01:51] Speaker C: I mean, it was. It's good. She's good. They're perfectly fine. There's no bangers. You know what I mean? There's no song of the summer on those. Oh, yeah.
[00:01:57] Speaker A: I mean, she didn't trash anyone.
[00:01:59] Speaker B: No. There was some stuff about her boyfriends.
[00:02:02] Speaker A: There's some tea.
[00:02:03] Speaker C: There has to be a little tea.
[00:02:04] Speaker B: She has a song called Florida, so that's my favorite.
[00:02:06] Speaker A: Oh, really?
[00:02:07] Speaker B: She talks about Dustin, actually.
[00:02:08] Speaker A: Shut the front door. Yeah, we're gonna have to pick up on that. Right on.
[00:02:13] Speaker B: All right. Well, there you go.
[00:02:14] Speaker A: Giddy up.
[00:02:15] Speaker B: Okay.
[00:02:15] Speaker C: Got a new segment.
[00:02:17] Speaker A: A new segment called Tim's fishing trips and tips.
[00:02:21] Speaker C: It's called, did Donna and JB make this up? And it's a take on our pop quiz, hot shot. And we just. Me and Donna wrote down some stuff that sounds like it could be true for new laws. Laws. We did a whole episode on weird tax laws and so we're just gonna ask them, is this true or not?
[00:02:39] Speaker A: You.
[00:02:39] Speaker C: So a little bit on the rules. One, Jenny is winning the quiz right now. Six, two, four and a half.
[00:02:46] Speaker B: In.
[00:02:46] Speaker C: In this one, you will get half a point for knowing if it's true or false. And a bonus half point if you know why that is.
[00:02:54] Speaker B: Oh, okay.
[00:02:54] Speaker C: So don't.
[00:02:55] Speaker B: I like this twist.
[00:02:56] Speaker C: Some fun time secondary information.
[00:02:58] Speaker B: Okay.
[00:02:59] Speaker C: Okay. First one is for Tim. In Kentucky, snickers are taxable, but twizzlers are not. True or false?
[00:03:08] Speaker A: I'm gonna say true. And that's because they are taxed differently due to either flower content or something related to the fact that one's treated as a candy and one is treated as a girl item.
[00:03:19] Speaker C: Yes, that is a full point. He is right. So if it has flour, it's a cookie.
[00:03:23] Speaker A: That's right.
[00:03:24] Speaker C: Not candy.
[00:03:24] Speaker A: That's right. Cookies are non taxable.
[00:03:27] Speaker C: Cookies are not taxable. Candy is taxable.
[00:03:29] Speaker B: That's right. Because cookies are a grocery item.
[00:03:31] Speaker C: Got it.
[00:03:32] Speaker B: Yep.
[00:03:32] Speaker A: Yep.
[00:03:33] Speaker C: Okay, full point for Tim. It is now a six.
[00:03:36] Speaker B: I would have gotten that one, by the way.
[00:03:37] Speaker C: Oh, really?
[00:03:39] Speaker A: Because she's heard me use the Twix argument like 1500 times.
[00:03:42] Speaker B: I have used it myself before.
[00:03:44] Speaker A: Okay, big time.
[00:03:45] Speaker B: I know Jenny says I did pass my CMI lately.
[00:03:48] Speaker A: Hey, you know what? That is something that we do need to celebrate and we have not talked about on this podcast.
[00:03:52] Speaker C: CMI.
[00:03:54] Speaker A: Congratulations to our latest certified member of the Institute for Professionals and Taxation, one Jenny Carter.
[00:04:01] Speaker B: Thank you.
[00:04:02] Speaker A: Yes.
[00:04:02] Speaker B: Thank you.
[00:04:03] Speaker A: Golf club.
[00:04:04] Speaker B: Yes.
[00:04:04] Speaker A: Good job.
[00:04:05] Speaker B: Where's my big check? My big cardboard check? My brain's is very thick.
[00:04:10] Speaker C: I'm just gonna add to pay for the applause.
[00:04:13] Speaker B: So there you go.
[00:04:14] Speaker A: I love it. I love it.
[00:04:16] Speaker B: Thank you, Tim.
[00:04:16] Speaker A: You're very welcome.
[00:04:17] Speaker C: Yes, congratulations to the people that just applauded proud in a North Carolina grocery store, Evian is exempt, but La Croix is taxable.
[00:04:28] Speaker B: I know you wanna answer that. I know that is.
I was gonna say that's true because La Croix is carbonated.
[00:04:37] Speaker C: Yes, that is true. That's a full point.
So bottled water is food and food ingredients.
[00:04:44] Speaker A: Food for home consumption.
[00:04:46] Speaker C: Food ingredients. Does it say that? Somewhere on it does.
[00:04:48] Speaker A: I mean, typically, like it's actually in the state statute how to define certain items and bottled water would be food and food ingredients. Yes.
[00:04:56] Speaker C: Oh, wow. Okay.
[00:04:58] Speaker A: And then a carbonated beverage is a carbonated beverage, which means it would be considered to be taxable.
[00:05:02] Speaker C: Very weird.
Okay.
[00:05:04] Speaker B: But yay me. Good job that CMI came in handy.
[00:05:08] Speaker A: That's the CMI.
[00:05:09] Speaker C: That's how you get one. You know the answer to that question.
[00:05:12] Speaker A: Tim has his grumpy cat face on.
[00:05:14] Speaker B: It's a one question exam, man.
[00:05:17] Speaker C: I got it wrong again.
[00:05:19] Speaker A: Gotta wait another year.
[00:05:20] Speaker B: For the third time.
[00:05:23] Speaker C: In Tim, in Hartford, Connecticut, a pair of hey, dude shorts will cost you 6.35% in tax. But a pair of Gucci loafers will run you 7.75 in tax.
[00:05:36] Speaker A: I'm going to say that's true. And it's because the Gucci loafers are. There's like a luxury tax that's actually applied on top of it because they're so expensive. Is that correct?
[00:05:44] Speaker C: That is correct.
[00:05:45] Speaker A: Bam.
[00:05:45] Speaker C: That's a lot. So you get a luxury, like in monopoly.
[00:05:48] Speaker A: Yeah, dude. You get a luxury tax on certain high dollar items. Yeah. There's different tax rates. It's just like, there's clothing tax rules in the northeast. I won't pick on particular states. Cause I'm really tired of apologizing to people, but. Okay, thanks. There you go.
[00:06:03] Speaker B: New York, New Jersey.
[00:06:04] Speaker A: But, like, certain items, if it's underneath a dollar threshold, you don't pay tax. Right. So it's underneath like, $125. You don't pay any tax. So anything that's over $125, you turn around and pay tax on it.
[00:06:15] Speaker C: Almost like an anti regressive thing.
[00:06:18] Speaker A: That's exactly it.
[00:06:20] Speaker C: I don't want to hurt you more because you're obviously too bored to buy Gucci.
[00:06:23] Speaker A: It's the Robin Hood tax. Right. You know, you turn around, you're. Yeah. Robbing the rich to pay for the poor.
[00:06:28] Speaker B: Well, and Tim would know. He has lots of gucci loafers. I'm sure you're very fancy, dude.
[00:06:33] Speaker A: I actually own, like, the only shoes that I own are hey, dudes.
I ask anybody in my office, I think I have, like, two pairs of dress shoes that are Cole, Hans. Everything else is hey, dudes.
[00:06:42] Speaker C: That's why. Everything. That's why this was hey, dude shoes.
[00:06:45] Speaker A: I knew it.
[00:06:45] Speaker B: Of course.
[00:06:46] Speaker C: All right, Jenny, in Connecticut, five donuts are taxable. Six donuts are exempt.
[00:06:51] Speaker B: Oh, we actually covered this on our food and beverage episode. And six donuts are. Oh, I have to say. True or false? Right? So what did you say? You said five donuts are taxable.
[00:07:01] Speaker C: Five donuts are taxable. Six donuts are exempt.
[00:07:04] Speaker B: I think that's true because five donuts is considered. Or six donuts are considered grocery items. Is that correct?
No. Is it the opposite?
[00:07:15] Speaker C: You are right that it is exempt and there is a reason. But it's because.
[00:07:19] Speaker A: Can I give the reason?
[00:07:20] Speaker C: Yes.
[00:07:21] Speaker A: The reason is.
[00:07:25] Speaker C: Please.
[00:07:26] Speaker A: Teacher Tim GPT engaged.
It's because they act. It's actually kind of funny. They actually think that five donuts you can consume in a single sitting. Isn't that right?
[00:07:36] Speaker B: Yeah, that's what it is.
[00:07:38] Speaker C: That's it.
[00:07:38] Speaker A: It's because they think that a normal human could sit down and shovel in five donuts in a single sitting.
You couldn't have six?
[00:07:46] Speaker B: No. Well, has anyone been to America? Yes. People can eat five donuts in a sitting.
[00:07:50] Speaker A: So, I mean, yo, bro, if you go to a Krispy Kreme and you can't house six hot now, I mean, I'm telling you what's crazy is you'd.
[00:07:57] Speaker C: Think that they would maybe just do it just by calories, right? Like, calories and donuts are absolutely insane. Like, a chocolate frosted regular donut is like 300 calories and you can eat that in two bites and not even realize you've done this. So you'd think, fine, that's 1700 calories worth of donuts. That's too much to eat in one sitting. So it'd be like, we're not gonna say you can.
[00:08:18] Speaker A: What I'm curious is, did they sit like a test group of people in a room and just put dozens of donuts in front of people and say, okay, let's see how many you could actually eat in one sitting?
[00:08:29] Speaker C: I've got to think that that's true. And hopefully when we get our tax law experts on this is a question we need to ask, like how, when, how do you.
[00:08:37] Speaker A: I would agree. We gotta figure that out. It's the donut lobby.
[00:08:40] Speaker C: Yeah, you get half a point. True. But yes, it's. Darn it.
[00:08:44] Speaker A: Tim's gaining ground.
[00:08:46] Speaker C: It is called the bulk food exemption.
[00:08:48] Speaker A: Bulk food exemption. There you go.
[00:08:49] Speaker C: It's whatever they consider too much. More than one person could eat in one meal.
[00:08:54] Speaker A: Love that.
[00:08:55] Speaker C: All right. And this is for Tim. In Texas, sneakers are taxable. Cleats are not.
[00:09:02] Speaker A: That is true. And it's because sporting apparel is considered to be exempt in the state, whereas normal, like regular apparel, is considered to be taxable. Is that right?
[00:09:12] Speaker C: No, it is false.
[00:09:14] Speaker A: What?
[00:09:15] Speaker C: Here's the thing. It sounded so correct, what you were saying.
[00:09:18] Speaker A: I thought there was a state. I know there's a state that actually does that.
[00:09:22] Speaker B: He is the master of that, by the way, if you haven't noticed, JB.
[00:09:24] Speaker A: It'S all about confidence.
[00:09:25] Speaker B: It's a thing.
[00:09:26] Speaker A: It is confident.
Come off the top rope and you act confident, people are just going to jump.
[00:09:32] Speaker C: Donna is wrong. No, I was like, she must be wrong. Listen to how he's saying, I know.
[00:09:36] Speaker A: Leave it to Texas. Well, you figure football is huge in Texas.
[00:09:39] Speaker C: Yeah, it does seem. I wonder if she also said sneakers. So I wonder if you're tech. Like, there is a world where both of them, those are just sport shoes, so.
[00:09:47] Speaker A: Oh, yeah.
[00:09:47] Speaker C: You know what I mean?
[00:09:48] Speaker A: You know what? Yeah, you may be right.
[00:09:49] Speaker C: So it could be.
[00:09:50] Speaker B: Doesn't matter. You're still wrong.
[00:09:51] Speaker A: Doesn't matter. Whatever, dude. I already gained a half a point, all right? Give me a break.
[00:09:55] Speaker C: In Georgia, bulldog shirts are exempt. Gator shirts are taxed.
[00:10:00] Speaker A: Oh, God.
Jesus.
[00:10:03] Speaker B: What was it? Sorry.
[00:10:05] Speaker C: Bulldog shirts are exempt. Gator shirts are taxed twice.
[00:10:10] Speaker B: I think that's false.
[00:10:11] Speaker C: Sadly, it is false.
[00:10:12] Speaker B: But, Tim.
[00:10:12] Speaker C: Yeah.
[00:10:13] Speaker A: Especially cause Jenny's a gator fan.
[00:10:16] Speaker C: Now, the good news is, for Tim, you can only get half a point for that because there's nothing else.
[00:10:20] Speaker B: Oh, there's no follow up.
[00:10:20] Speaker C: I mean. What do you mean follow up?
[00:10:22] Speaker B: Cause follow up to sing the gator fight song. Or follow up.
[00:10:28] Speaker C: Right. Tim. In Florida, adult bike helmets are taxable. Youth helmets are exempt.
[00:10:33] Speaker A: You know what? I'm gonna say that's true. Cause there's no way that Donna could just make up something that crazy. I'm gonna say that it's true and I have no reason why.
[00:10:42] Speaker C: Yep, you do get the half point for it being true.
[00:10:45] Speaker B: Let me get. Is it because there's exemptions for children's clothing? Yes, children's. See, that wasn't so hard, Tim.
[00:10:51] Speaker C: Well, it's just because in general.
[00:10:53] Speaker A: Look, somebody sitting next to me is from home. Assassin.
[00:10:56] Speaker C: Okay.
Alabama ammunition is exempt, but only during hunting season.
[00:11:05] Speaker B: Oh, that's a tough one. Ammunition's exempl. I have to say false. That would be hard to regulate.
[00:11:11] Speaker C: It is false. It would be hard to regulate, but it's still. It makes so much sense. That's a good one.
[00:11:15] Speaker A: It really does.
[00:11:16] Speaker B: That is.
[00:11:16] Speaker A: Yeah, that's a good one. Yeah. Great. Give Jenny another point. Congratulations.
[00:11:19] Speaker C: Nine and a half to seven. That's it.
[00:11:22] Speaker B: Again, the CMI kicking in.
I'm just a new woman.
[00:11:26] Speaker C: All right, let's take a quick break, and then when we come back, we will do the new laws.
[00:11:35] Speaker B: All right, we're back. And that was a great quiz because I dominated. And we're gonna go right into what's new in 2024. Like we said earlier, legislators have met, they have made decisions or they're about to make some decisions.
[00:11:48] Speaker A: Bunch of interesting stuff. We're going to already start on a subject that we've beaten the heck out of. But obviously the digital tax in Georgia, Jenny's most hated tax as well as Donna's because of kindle downloads. And congratulations. So any digital good that you now take possessory interest in. Right. So if you basically take ownership of it, you have to pay sales tax on it here in the state of Georgia. So if I go and I buy a movie on Amazon prime and I now own it forever, what do I got to do, Jenny?
[00:12:17] Speaker B: You gotta pay tax on it.
[00:12:18] Speaker A: That's exactly right.
[00:12:19] Speaker C: Does it come out automatically like I buy it on Amazon now? Just the price is just higher.
[00:12:22] Speaker A: You know what?
[00:12:23] Speaker C: It's.
[00:12:23] Speaker A: Cause I'm thinking that. Yes, it is.
I'm still kind of interested because prime is a subscription, if that would fit in. Cause they automatically say that the subscription models don't get taxed, but you are paying an additional charge to own something indefinitely. So it's like with a Kindle, you turn around and you buy a book, you now own it. You're gonna have to turn around and pay tax on it.
[00:12:44] Speaker B: Yeah, the book's gonna say like, I buy books on my Kindle all the time and the book says 999, but it doesn't have the tax included, like on my Kindle. But yeah, on my Amazon bill, the tax is added. Does that make sense?
[00:12:56] Speaker A: There you go. For sure. Bingo. So that's exactly what happens when you buy movies. So that got instituted when Jenny?
[00:13:00] Speaker B: Just beginning of the year, right?
[00:13:02] Speaker A: That's right. January 1, 2024. So congratulations. You should be seeing that now.
[00:13:05] Speaker B: Hey, so you're what tortured poets department, did that get taxed? If you downloaded that, if you own.
[00:13:11] Speaker A: It, you bought it. Yeah, if you turn around and you decided to download it, now buy it. But see, I got Spotify. So with Spotify, it's just a subscription service and you turn around and don't have to pay tax on subscription services because why it's a service, right. Georgia doesn't tax those kind of services.
[00:13:26] Speaker B: I don't know. They might one day.
They never know.
[00:13:30] Speaker A: Well, we recently just talked to Frank O'Connell, the commissioner of revenue, and he said that obviously the department does not make tax policy. We just got to be curious to see if the legislatures are going to roll the dice and try to make some changes. That was actually a really fun conversation with Frank.
[00:13:44] Speaker B: That was really fun. Go listen to our Georgia Department of Revenue episode with the commissioner, Frank O'Connell.
[00:13:50] Speaker A: Yes, it was absolutely fantastic. Had a lot of fun with that. All right, so another new thing, Alabama and their simplified sales tax. This is kind of interesting. So they're proposing legislation under House Bill 258 that they're going to aim to increase the Alabama simplified sales tax rate from 8% to 9.3%.
[00:14:11] Speaker B: Kind of substantial.
[00:14:12] Speaker A: It is.
[00:14:13] Speaker B: That's kind of a big deal.
[00:14:14] Speaker A: They're starting to use language like level the playing field. Again, your favorite? My favorite. And the reason they're having to do this is because in state brick and mortar retailers feel like they're losing out because they have to pay all this local tax, additional local tax, like a mobile, and Birmingham and some of these other cities, you have tax rates can be up to 910 percent. But if you're a remote seller and you don't have a physical presence in the state of Alabama, you can apply for their simplified sales tax. Or sellers use simplified sales tax program and you only have to collect, what, 8%. Right. On all your transactions. So these guys feel like they're losing out. Pretty interesting.
[00:14:51] Speaker C: I wonder if it's in response to the taxfoundation.org. So do you know who's in dead last for state sale tax?
[00:14:59] Speaker A: Let me guess. Abalama, Alabama.
[00:15:02] Speaker B: Louisiana has got to be.
[00:15:04] Speaker C: Louisiana, 48.
[00:15:05] Speaker A: There you go.
[00:15:06] Speaker B: Obviously, Colorado, 49.
[00:15:07] Speaker C: Colorado is actually not bad. They're 40th. Oh, they gave him a lot of points for their corporate tax.
[00:15:14] Speaker B: Oh, okay.
[00:15:14] Speaker C: Like, whatever that.
[00:15:16] Speaker B: Okay.
[00:15:17] Speaker A: Yeah. Jenny, you've got a couple you wanna.
[00:15:19] Speaker B: No, no, I was just gonna talk more about Alabama.
[00:15:22] Speaker A: Oh, nice.
[00:15:22] Speaker B: To tax poetic. A little bit about why you don't like this. It's because of Illinois. Right. The level of the playing field.
[00:15:27] Speaker A: Man, you always gotta get me in trouble with these guys in Illinois.
[00:15:30] Speaker B: Well, I just wanna. For our listeners who maybe like to.
[00:15:32] Speaker A: Raise my blood pressure.
[00:15:33] Speaker B: Well, obviously.
[00:15:34] Speaker A: I mean, seriously, anytime. All right.
[00:15:36] Speaker B: Yeah. So if you want to just remind our listeners that why you don't like the Illinois playing level the playing field.
[00:15:43] Speaker A: You know, it's in Alabama's. Alabama's kind of. It's not really a constitutional question. It's just a raising the rate because other people are barking that the people in state are having to pay higher tax rates and buying stuff online. It's hurting in state retailers. Like, I kind of get that. That really is leveling the playing field. But those words are just ingrained and burned like scars until, you know, tax professionals minds right now because of what's going on in Illinois and this unconstitutional application of their law, where it's basically, if you have any form of physical presence in the state of Illinois and you're shipping goods from outside the state, inside the state, you get to use origin based sourcing. And what that means is that you only have to charge six and a quarter percent on any of your transactions, whereas all the rest of these remote sellers that don't have physical presence in Illinois, they got to collect all the local taxes. How does that level the playing field?
[00:16:32] Speaker B: Not cool.
[00:16:33] Speaker A: Sounds like that playing field is about 45 degrees out kilter to me. But, you know, hey, it's also 45.
[00:16:39] Speaker B: Below zero there, so, you know. Yeah, we won't even.
[00:16:42] Speaker A: Okay, well, I'm touching that one with ten foot pole, but good job.
[00:16:45] Speaker B: So. All right, so, Alabama. And when did that go into effect?
[00:16:48] Speaker A: You said it's actually. It's proposed legislation, so it's house. Yeah, it's house bill 258. We got to see if makes it all the way through, but it sounds like there's a lot of movement behind it.
[00:16:57] Speaker B: Okay.
[00:16:57] Speaker A: Yep.
[00:16:58] Speaker B: All right, so now let's move to our favorite topic, syntaxes. Ooh, syntaxes.
[00:17:02] Speaker A: That's right. That's sin, folks. Not s y n for synexis. That's right. Which means what? What does syn mean? Why do we call it synexis?
[00:17:11] Speaker B: For sinking?
[00:17:13] Speaker A: It's close.
[00:17:14] Speaker B: Synergy, actually.
[00:17:16] Speaker A: Synergy is actually a really good one, but if you think about it, the greek prefix syn, syn means together. And in conjunction with Nexus, it's us doing taxes together.
[00:17:25] Speaker B: Oh, my goodness.
[00:17:26] Speaker A: Yep.
[00:17:27] Speaker B: We should go to Greece sometime.
[00:17:28] Speaker A: There we go.
[00:17:28] Speaker B: Okay.
[00:17:29] Speaker A: Do a podcast with JB from Greece. The back of a boat. Yes. Yes. Okay, so onwards to syntax. Sin Hawaii is instituting a new excise tax of 70%.
[00:17:41] Speaker B: Yeah, hold on. Time out. Let's just all let that soak in. JB, you were very scandalized by this guy.
[00:17:46] Speaker C: You gotta know new is it. I mean, what was it before?
[00:17:53] Speaker B: Sorry, tips.
[00:17:54] Speaker C: Was it zero?
[00:17:55] Speaker B: I know.
[00:17:56] Speaker C: Like, so.
[00:17:56] Speaker B: I know.
[00:17:56] Speaker C: We should look that up 70% higher.
[00:17:58] Speaker B: Yeah. So, new. I wonder if it just wasn't taxed before. It says new excise tax. Kind of, or maybe.
[00:18:04] Speaker A: Yeah, I mean, like, literally, it was zero, dude. And now they're bringing in a seven 0% 70% excise tax on the wholesale price of electronic smoking devices.
[00:18:17] Speaker B: I mean, it's like, double the price, but, yeah, the.
[00:18:19] Speaker A: They did it because I am team GPT. I do get that.
[00:18:22] Speaker C: They had a. You know, they're trying to get people just to stop smoking, and they're like, regulation and taxation are just tools that we have, and we just want to make it harder for kids to smoke.
[00:18:32] Speaker A: I mean, I'm guessing that's. Yeah, that's guessing that's what's gonna happen.
[00:18:34] Speaker B: Well, and obviously a tourist mecca. They probably don't want their island to smell the.
[00:18:39] Speaker C: A lot of people. So I guess one in three high school kids in Hawaii.
[00:18:43] Speaker A: Vape. Vape.
[00:18:44] Speaker B: That's probably nationwide.
[00:18:46] Speaker C: I bet that's probably everywhere, but, yeah.
[00:18:48] Speaker B: So syntax. Okay, so what's the next date?
[00:18:50] Speaker A: The next state on syntax. Keeping along with the vape front, our friends up in Maine, right, they are going to turn around and crack down on vaping with a 43% excise tax on the wholesale price of electronic smoking devices. That's two states, Hawaii and Maine, with ridiculous tax rate increases, 70% on one and 43% on the other.
[00:19:11] Speaker B: I think it's a statement on our social policy. Honestly, with vaping and all the issues.
[00:19:17] Speaker C: They'Re just like, look, we can't make a law about it, so we're just going to make it provably expensive. Just gonna try to do it that way.
[00:19:25] Speaker A: In all honesty, thinking about vaping, and I know a ton of people who do vape.
We don't really know what it's doing to them.
[00:19:33] Speaker B: Right. That's what they think it's dangerous. And I think it's mostly because of children.
[00:19:38] Speaker C: And when it came out, it was like, this is the better alternative. Everybody was like, this is better if you have to do this one.
[00:19:45] Speaker A: But nobody thought about the fact that you're inhaling pure evaporated vegetable oil into your lungs. Like, oh, yeah. Hey, congratulations. Yeah, it's still bad.
[00:19:53] Speaker B: Yeah. And the issue, I mean, if they can raise the taxes and make it more expensive for kids, teenagers to buy it, that might be, I assume, what part of their aim is. But I think it's interesting. I think it's going to be a trend. Mark my words. I think we're going to see more of this.
[00:20:08] Speaker A: I would agree.
[00:20:09] Speaker C: Nationwide. You were right about the other one, the dropping. Yeah.
[00:20:13] Speaker A: Dropping the transaction count for economic nexus. Yeah, there's a lot of say. I mean, you were right about that. Look, it's just simply. That's common sense.
[00:20:19] Speaker B: Yeah, I have ESPN also. ESPN is good.
[00:20:23] Speaker A: I'm not even touching it. I just can't.
[00:20:26] Speaker C: It's a fifth sense.
[00:20:26] Speaker A: I think we all have ESPN.
All right, so last thing, we're going to talk about Ohio, right?
[00:20:34] Speaker B: Ohio.
[00:20:34] Speaker A: And the cat tax.
[00:20:35] Speaker B: Ohio. You're actually kind of on our good list right now. I know. Yeah.
[00:20:39] Speaker A: The cat tax.
[00:20:40] Speaker B: Speaking of, what's new, pussycat?
[00:20:42] Speaker A: Exactly. The commercial activities tax is undergoing significant changes within the state. If you're not aware of this, the tax imposed.
[00:20:48] Speaker B: Hold on, hold on, hold on. Why don't you just tell everybody what a cat tax is real quick?
[00:20:53] Speaker A: The commercial activity is tax, is a tax on gross receipts that actually occur within the borders of the great state of Ohio.
[00:21:00] Speaker B: Right. They have a sales tax and a use tax, but then, like some other states, they have a gross receipts tax, which they don't call a grocery seats tax.
[00:21:07] Speaker A: They call it the commercial activities tax.
[00:21:09] Speaker B: Right.
[00:21:10] Speaker A: Which is the cat.
[00:21:11] Speaker B: Yes.
[00:21:11] Speaker A: Well, if you say cat tax, it's like saying commercial activities tax. Tax.
[00:21:15] Speaker C: It's the cat.
[00:21:15] Speaker B: Well, that's true. It is the cat ATM machine. It's the cat ATM is. Oh, that's a good one.
[00:21:20] Speaker A: Oh, yeah.
[00:21:20] Speaker C: There you go.
[00:21:21] Speaker A: But anyways, our friends in Ohio have decided that the measure by gross receipts for business activity, estate, for tax periods that begin on or after January 1 of 2024, basically, the cat has been eliminated. Up to now, 3 million in gross receipts used to be $1 million. Now it's 3 million. And then it's going to double again, I think. Right. It's supposed to. I think it's either 2025 or 2026 is going to go to 6 million.
[00:21:48] Speaker B: We saw an immediate impact with this with our clients earlier this year. We have a lot of middle market clients that fall within this range or fall below the $3 million range, and they were able to close their accounts. And Ohio made it actually pretty easy to close your account.
[00:22:03] Speaker A: And sometimes they were doing it for you.
[00:22:05] Speaker B: I know. Yeah, that's true.
[00:22:06] Speaker C: Sometimes they're doing it for you.
[00:22:08] Speaker A: Hey, we're good. We don't want your paperwork anymore, which is great.
[00:22:11] Speaker B: And I just think it's a pat on the back for you, Ohio. Thanks for not only making the change, but making it easy for your taxpayers.
[00:22:19] Speaker A: To our friends up in Columbus, you still have a terrible football team. But you know what? We're good on your tax policy.
[00:22:24] Speaker B: You can't change everything.
[00:22:25] Speaker A: You can't win at everything.
[00:22:26] Speaker C: Do you know what the. What? The taxable rate is going to be over if you're over 3 million.
[00:22:31] Speaker A: It's ridiculously low. I don't want to quote. Yeah, it's 0.26%.
That's 0.26%.
[00:22:40] Speaker B: But, you know, every little bit adds up.
[00:22:42] Speaker C: Sure. Oh, yeah. New segment.
[00:22:44] Speaker B: A new segment.
[00:22:45] Speaker A: Another new segment. I love it.
[00:22:47] Speaker B: We love new segments. Yes.
[00:22:49] Speaker C: Jenny, take us home.
[00:22:50] Speaker B: All right. Thank you so much for listening us today on taxing poetic. Just a reminder, you don't have to listen to these episodes all in order. We have a gigantic library since now we're a 1% podcast, right? So we have over 21 episodes, and you can listen to us wherever you listen to your favorite podcasts. And we just really appreciate you being with us today. We'll see you next time.
[00:23:09] Speaker A: Congrats, Jenny. Good job on the CMI.
[00:23:12] Speaker B: Thank you.
[00:23:12] Speaker A: Rock on.
[00:23:13] Speaker B: I'm winning the quiz.
