[00:00:08] Speaker A: Welcome, everyone, to taxing poetic. My name is Tim Howe from Synexus and I'm your co host along with Jenny Carter.
[00:00:15] Speaker B: I'm your other co host.
[00:00:16] Speaker A: Awesome. And we're here with JB, our producer.
[00:00:17] Speaker C: How's it going?
[00:00:18] Speaker A: Awesome, dude. And we are going to be talking about states in our region, season or series, excuse me. Which are sometimes hot and sometimes cold. These states include Florida, Virginia, Maryland, North Carolina, South Carolina, Delaware, West Virginia, and the great District of Columbia, Washington, DC, not technically a state.
[00:00:37] Speaker B: And JB, can you real quick remind our audience how you come up with these regions for these states? Because for Florida to be here is kind of funny.
[00:00:46] Speaker C: Yes. I did a list of regions of the United States and then they broke them down. This one on the old Wikipedia is called South Atlantic, which does kind of make guess, you know, Delaware, Florida.
[00:01:00] Speaker B: Yeah. Just reminding the audience that we do not come up with these groupings. So if we were, we'd probably do them by football conference, correct?
[00:01:07] Speaker C: Yes.
[00:01:08] Speaker A: Well, it's kind of interesting. Like you're like, okay, well, hey, they just kind of followed the eastern seaboard all the way down. Like I 95 from Delaware, but they just happened to skip through Georgia. Like, forget Georgia is even on the coast. Just went from North Carolina, South Carolina up. No, Georgia.
[00:01:22] Speaker C: Georgia is technically on this list. We just talk about Georgia. So didn't.
[00:01:26] Speaker A: We're going to do a Georgia.
[00:01:27] Speaker C: I skipped it. So that's why it seems even weirder, because we talk about Georgia all the time. We can do a Georgia specific podcast, no problem. So I was just trying to give the other states.
[00:01:38] Speaker B: Okay, can you edit Wikipedia yourself to take Georgia out of this group?
[00:01:42] Speaker C: I should just be like, listen on taxing poetic, Georgia wasn't on this.
[00:01:45] Speaker B: Correct.
[00:01:45] Speaker A: Congratulations.
All right, so Jenny, you're going to hook us up with a haiku.
[00:01:51] Speaker B: Yes. Okay, so we have a listener named Julie who sent in this haiku, and it's not necessarily state specific, but since we are in our second season of taxing poetic and it's the beginning of a new year, I thought it was very appropriate. You ready?
[00:02:05] Speaker A: Awesome.
[00:02:07] Speaker B: New year, same ish. You, no need for a new version. You're not an iPhone, however.
[00:02:18] Speaker A: Well played, Julie.
[00:02:19] Speaker B: Thank you, Julie, for sending this in. I love it. However, I will say this does not apply necessarily to any of the states we're going to talk about, because some of you do need a new version. Correct?
[00:02:29] Speaker A: 100%.
[00:02:29] Speaker B: Yeah. In a lot of ways.
[00:02:31] Speaker A: Florida.
[00:02:32] Speaker B: Yeah. States, Florida.
[00:02:33] Speaker A: You need to be a better version of you.
[00:02:35] Speaker B: Yes. What is our motto? States be better.
[00:02:37] Speaker A: 100%.
[00:02:38] Speaker B: Yeah.
[00:02:38] Speaker A: States need to be better.
[00:02:39] Speaker B: But to all you listeners, though, you people out there, you don't need a new version of yourself.
[00:02:44] Speaker A: No.
[00:02:44] Speaker B: Yeah. Just the state.
[00:02:45] Speaker A: Just how you are.
[00:02:46] Speaker B: Yes. So thank you, Julie. So, Tim, which states should we start with?
[00:02:49] Speaker A: Oh, we got to start with Florida.
[00:02:51] Speaker B: Okay.
[00:02:51] Speaker A: Just come out of the gate swinging. Yes.
[00:02:53] Speaker B: I know.
[00:02:53] Speaker A: We can't. Oh, we got to do.
[00:02:55] Speaker C: What do we start with every time?
[00:02:56] Speaker B: Pop quiz. We were ready to jump in.
[00:02:59] Speaker A: JB, popping in. All right, so we got our pop quiz coming up from Donna McMurray, our off show.
[00:03:07] Speaker B: She's our researcher.
[00:03:09] Speaker A: Off show, research, brain gal.
[00:03:11] Speaker B: Franci.
[00:03:12] Speaker A: There you go.
[00:03:12] Speaker B: I know. Makes the show happen.
[00:03:14] Speaker A: There you go.
[00:03:14] Speaker C: She has all the things.
Since.
I'm probably breaking a rule, but last time, Jenny won two to one.
[00:03:23] Speaker B: Correct.
[00:03:23] Speaker C: So I'm going to try to keep a season running tally.
[00:03:26] Speaker A: So, you know, at least she's not going to get skunked this season.
[00:03:29] Speaker C: Yes.
[00:03:30] Speaker A: She's going to come away with a win.
[00:03:32] Speaker C: Okay, so Jenny is up two to one going into this episode.
[00:03:35] Speaker B: Love it.
[00:03:36] Speaker C: Okay, this question is for Tim. Which state taxes commercial rental?
[00:03:42] Speaker A: Florida.
100% Florida.
[00:03:46] Speaker B: I actually knew that one, too.
[00:03:47] Speaker A: It.
[00:03:48] Speaker C: So that's weird.
[00:03:51] Speaker A: Very weird.
[00:03:52] Speaker B: It was on our top ten, right?
[00:03:53] Speaker A: Yes.
[00:03:54] Speaker B: Our top ten weird sales tax episode. Yeah, we don't like that.
[00:03:58] Speaker A: A lot of states don't. I mean, every state doesn't tax real property rentals. I mean, you got to think, like, if you go and rent an apartment, you're not paying tax on that. Right? Well, same thing. Like, if you're paying commercial rent for an office space, you would not expect to pay sales tax. Well, guess what? Not the case in.
[00:04:16] Speaker B: Mm hmm. Yeah.
[00:04:17] Speaker A: Florida. Be better.
[00:04:18] Speaker B: Be better, be better. Yep. You do need a new version of yourself. Okay, so now it's my turn.
[00:04:23] Speaker C: Jenny, which state has no local sales tax?
[00:04:26] Speaker B: Oh, no local sales tax. Let's do.
Well, this is kind of a trick question.
Oh, no. Maybe not Maryland.
[00:04:35] Speaker C: Maryland, yes. Right. Let's get there.
[00:04:37] Speaker B: Delaware is on this list, but they don't have sales tax. They have grocery seats tax. So I almost said Delaware, but then.
[00:04:43] Speaker A: I went, okay, what about Washington, DC?
[00:04:45] Speaker B: Well, I also. But they're not a state.
[00:04:47] Speaker A: They don't have a local municipality.
They're all their own municipality. Donna, I throw a challenge flag.
[00:04:55] Speaker B: No, Tim, you can't throw a challenge flag every time I get one. Right.
It's not the way this works.
[00:05:02] Speaker A: I don't know the previous episode. I think you all need to go and review it.
All right, JB.
[00:05:07] Speaker C: All right, Tim, which state collects on the bracket system?
[00:05:10] Speaker A: That would be Florida. Excuse me?
[00:05:13] Speaker C: Maryland.
[00:05:14] Speaker A: Oh, no. Florida used to have brackets. That's right. Maryland is the only one that's left. Maryland. And I think it's Pennsylvania is the other one.
[00:05:20] Speaker B: Also, we talked about that on the top ten episode, the bracket system. I said Florida, too, if it makes you feel better. It is the worst.
[00:05:26] Speaker C: It doesn't make any sense.
[00:05:28] Speaker B: I know. Yeah. It's not like March Madness. It's much worse, which I love. I know. We all do.
[00:05:34] Speaker C: All right, Jenny, which state has local BNO taxes, business and occupation?
[00:05:39] Speaker B: Oh, local BNO would be West Virginia.
[00:05:41] Speaker A: It's all right here on our fact sheet.
[00:05:43] Speaker B: Oh, man, I knew it.
[00:05:45] Speaker A: Cheaterson.
[00:05:46] Speaker B: Whatever. I file West Virginia taxes all the time. Again, Tim, you cannot get upset every time I get one. Just because you were season one winner doesn't mean you're going to win this year.
[00:05:57] Speaker C: All right, Tim, which state does not have a sales tax?
[00:06:00] Speaker B: Delaware.
[00:06:01] Speaker C: Oh, my goodness.
[00:06:02] Speaker B: Boohoo. Right back at you.
Yeah, I was going to say JB is sales tax expert now.
[00:06:09] Speaker C: All right. And Jenny, which of these states have separate food, beverage, meals and hospitality taxes on prepared food?
[00:06:16] Speaker B: Oh, on prepared food.
[00:06:17] Speaker C: I'm going to give you a hint. Just because there is four.
[00:06:22] Speaker B: Okay. Well, I know North Carolina has separate f and b tax.
[00:06:27] Speaker C: That is one correct.
[00:06:27] Speaker B: I know South Carolina does.
[00:06:29] Speaker C: That is two correct.
[00:06:30] Speaker B: I'm going to say. Oh, yeah, I know Virginia does.
[00:06:33] Speaker C: That is three correct. Does she have the fourth?
[00:06:35] Speaker B: Virginia. Oh, yay. Oh, it is.
[00:06:38] Speaker C: I want to do so bad, but no, it is Florida.
[00:06:42] Speaker B: Really?
[00:06:42] Speaker A: Panama City.
[00:06:44] Speaker B: Oh, Panama City.
[00:06:45] Speaker A: Well, there's a couple others, but I did forget.
[00:06:48] Speaker B: Darn it. Do I get three fourths of four?
[00:06:51] Speaker C: I'm going to give you a half a point.
[00:06:53] Speaker B: Thank you.
[00:06:53] Speaker C: Tim is outraged.
[00:06:56] Speaker B: That was a tough question. Would you have gotten all four of those?
[00:06:58] Speaker A: Yep.
[00:06:59] Speaker B: Oh, whatever, man.
[00:07:01] Speaker C: That was tough. Four part answer.
[00:07:03] Speaker A: Do we have a 6th question?
[00:07:05] Speaker C: We have a lot of states. 123456. I want six.
[00:07:09] Speaker A: Was it really?
[00:07:10] Speaker C: All right, hold on.
[00:07:11] Speaker B: I know.
[00:07:11] Speaker C: I feel like, Tim, commercial states, commercial rental.
[00:07:14] Speaker A: That was you.
[00:07:15] Speaker C: Which state collects on the bracket system and which one does not have a sales tax?
[00:07:19] Speaker A: Oh, yeah.
[00:07:20] Speaker B: Which one does not a sales tax.
[00:07:23] Speaker A: So we ended in a tie. Nice.
[00:07:25] Speaker C: Well, I'm just doing. Oh, you're giving four and a half to three. Jenny is in the lead.
[00:07:31] Speaker B: I'm going to start typing my letter now.
[00:07:32] Speaker A: Go ahead and bleep that out.
[00:07:34] Speaker B: Say that on taxing poet.
[00:07:36] Speaker A: I can beep beep, beep, beep.
All right.
[00:07:42] Speaker B: Tim does not like to lose is what I'm wearing.
[00:07:44] Speaker A: I'm good with losing record.
[00:07:46] Speaker C: Tim saying the word beep, and I'll put that instead of the swear.
I'm going to try it.
[00:07:52] Speaker B: Beep.
[00:07:53] Speaker A: I'm trying. Love it.
[00:07:55] Speaker B: Okay, so back to. Should we go back to Florida? Speaking of beep.
[00:08:00] Speaker A: Yes.
And since we're getting into the region series, might as well go ahead and hit on each one of the individual. Right? So, yeah, Florida. Got to love them.
[00:08:09] Speaker B: What is our big problem with Florida? What is your main complaint?
[00:08:13] Speaker A: I wouldn't say there's a main one. There's probably, like of one of the originals. Mean, we've talked about it extensively and it was part of the quiz. The whole commercial rent and the fact that there's sales tax on commercial rent, it creates such a mess. There's so many people who, or I say people. There's so many companies, excuse me, that own property and own, like, out parcels that will rent these out parcels to smaller businesses. And they'll just choose. They'll be like, hey, you know what? I'm constantly under audit. Florida's never brought it up. I'm not going to collect the sales tax on the commercial rent. It's your responsibility to do it. It's going to be a use tax issue. And it's really difficult for some of these smaller companies to self administer that use tax on their commercial rent and understand the components of it.
[00:08:58] Speaker B: Right.
[00:08:58] Speaker A: So where you typically brought in after the fact, after an auditor has already picked these folks up and looked at their lease and seen everything and said, hey, guess what? You now owe like $150,000 in back use tax because you were never charged sales tax by the landlord. And you have Cam and all these other things that are actually included in cam being common area maintenance fees, and there's a bunch of other fees that are considered to be a necessary part of the rent. And it just makes it very convoluted and very difficult for middle market taxpayers, I'd say mid sized companies and even small businesses to understand what the impact would be.
[00:09:37] Speaker B: What are the tax implications for meth houses, for meth production?
[00:09:42] Speaker A: I don't know.
[00:09:43] Speaker B: For sales tax on those sales.
[00:09:45] Speaker A: Yeah. Check with the people who live in Citrus County, Florida.
[00:09:48] Speaker B: That's where I'm from, by the so. But that is obviously something Florida has not tackled yet.
[00:09:54] Speaker A: I mean, one of the other big problems that I have there is the whole max tax, the single article sur tax that's in Florida. It's a tax basically on the. So if you have a local tax in Florida, it's maxed out at the first $5,000 of tangible personal property or rental of tangible personal property, sale of tangible personal property. That max rule doesn't apply to commercial rent and a couple of other things, so you have to know that. But it just makes calculations of tax in Florida really interesting because what is a single article like? What defines, what does Florida define as a single article? And you could order like five different pieces of equipment that assembled together to make one big unit, and you could order them on five different invoices. And you could technically make the argument to the state that, hey, if this was a $500,000 piece of equipment, I only have to owe tax on the first $5,000 of that piece of equipment. But how are you going to track that over five separate invoices? It makes, from a systematic system implementation and calculation standpoint, makes it very difficult.
[00:10:57] Speaker C: It's like there'd be like a lot of accidental tax fraud, dude.
[00:11:01] Speaker A: There's a lot of accidental over remittances. There's also a ton of people who are just like, forget it, I'm just going to pay the state rate and I'm done. Hey, Florida, come chase me. Sure, yeah.
It also makes audits very interesting in Florida.
[00:11:19] Speaker B: Yes. All right. One of our favorite states, as always. Well, should we work our way up I 95 and skip Georgia? Obviously.
[00:11:27] Speaker A: Obviously.
[00:11:28] Speaker B: Per Wikipedia or JB's Wikipedia for me. Let's go to South Carolina and your other favorite state. You love to talk about manufacturing in South Carolina.
[00:11:38] Speaker A: It's just because their manufacturing rules are so mean. If you actually read their law and read how the do. I mean, this is actually something in the part of the law from the DOR.
It has to go in and define what is actually a piece of machinery. Right. What is considered to be a machine. And they have to give you like 15 different examples of what a machine is. And it talks about, well, is it necessary and integral to the manufacturing process? Is it directly used in the manufacturing process? It's like they took five different parts of the manufacturing, different types of manufacturing law, which we have integrated plant theory, which means anything that's necessary and integral to manufacturing would qualify as an exemption. Or they take the direct use law, which a state like Indiana has, and they incorporated direct use stuff. So it's this amalgamation of just all these different tax law components, and it makes it very convoluted and very frustrating.
It gives the state a lot of free rein to come in and say, you know what, that doesn't qualify or. Yeah, I'm going to say that qualify.
[00:12:41] Speaker B: Because direct use is the, what, least permissive or the least exempt friendly? And then integrated plant theory is the most tax exempt friendly because it's saying, like you say, anything used in the production process and the manufacturing process can possibly be tax exempt.
[00:12:59] Speaker A: That's exactly.
[00:12:59] Speaker B: So if you have a mixture of.
[00:13:00] Speaker A: The two, that would obviously make it confusing and contradictory. Right.
[00:13:04] Speaker B: Contradictory, yes. It's a great.
[00:13:07] Speaker A: Yeah. It's not a very friendly law, and I'm not a big fan. And I've had to have South Carolina auditors explain it to me and they usually look at me, know they're glazed over like a doughnut.
[00:13:16] Speaker B: Okay.
[00:13:18] Speaker A: Don't know.
[00:13:18] Speaker B: So right now, as we're moving north, everyone needs to be better is what we're saying. Yeah. Florida, South Carolina, be better. Okay, well, okay. So who's Carolina?
Yeah. Yeah. So let's see. Do we need North Carolina to be better?
What do you think about that, Tim? Sst trouble.
[00:13:36] Speaker A: You know what my biggest complaint with North Carolina is?
They just came up with this repair, remodel and maintenance type tax. Like the definition of if you're doing something to real property that you have to. Basically, if you're a contractor, if you're someone who comes in and does repair, maintenance services or remodel activities on an existing piece of real property, you have to charge tax on all of that. You can buy your materials exempt, but you have to collect tax from your customer. That's very difficult for a contractor. But they also say, hey, if it's a capital improvement project, get your customer to fill out this 589 CI capital improvement project form. And guess what? We'll exempt it from sales tax.
[00:14:18] Speaker B: Are you talking about the TPP purchase or their services, too?
[00:14:21] Speaker A: Their TPP purchase.
[00:14:23] Speaker B: Okay.
[00:14:23] Speaker A: Yeah. So if you're using a subcontractor, like if a contractor is using a sub, they can get a 589 form and pass that on to their sub, and the sub won't charge them tax for the work that they do. And it's just kind of a down the chain thing. But it's just this whole idea, like, can't we just, every state just treat contractors as contractors, as the end consumers and then let them pay tax on the cost basis of the materials and then they don't have to collect tax from anyone.
[00:14:48] Speaker B: Can't we all just get along?
[00:14:49] Speaker A: Yeah.
[00:14:49] Speaker B: Can't we all just treat contractors the same?
[00:14:51] Speaker A: It would be really nice.
[00:14:52] Speaker B: It would be nice.
[00:14:53] Speaker A: Nope, that's right.
[00:14:54] Speaker C: We're going to do a whole episode just on contract.
[00:14:56] Speaker B: Yes, we are. Stay tuned.
[00:14:58] Speaker A: Absolutely.
[00:14:59] Speaker B: You'll get to listen to Tim tax. Poetic on that for a long time.
[00:15:03] Speaker A: Very complicated form of sales tax.
[00:15:04] Speaker B: Yes, it is. Anything else about North Carolina before we move north?
[00:15:08] Speaker A: No.
[00:15:09] Speaker B: Did you touch on the.
[00:15:11] Speaker A: It's just not to pick on the SST, but North Carolina being a member state of, like, as part of the streamlined sales tax, you can't come up with a new form of tax. And North Carolina, did they have this manufacturer's privilege tax. It's like a 1% tax. And the SST got really pissed off about it and North Carolina was just kind of like, fine, come after us, kick us out, do whatever you want. And it just makes it very interesting. Right.
[00:15:38] Speaker B: Okay.
[00:15:39] Speaker A: Yeah. As a manufacturer in North Carolina, the manufacturing published tax is just another complication that you can layer on to doing business and conducting business.
[00:15:47] Speaker C: So there's no benefit for people in South Carolina to go to North Carolina to do your manufacturing?
[00:15:51] Speaker A: No, because you're going to end up paying there, too. You're going to end up paying 1% on all your machinery and everything else. Yeah, because it's just as crazy. And now you have this extra tax that's on top.
[00:15:59] Speaker C: Like, they're having a terrible manufacturing plan off.
Ours is terrible.
[00:16:04] Speaker B: It could be the.
[00:16:04] Speaker A: But ours is even worse.
[00:16:05] Speaker C: So bad.
[00:16:06] Speaker B: It's not like they're dry cleaning snow tires, like going across the border. Yes. Well, okay, so now we're going to move north. So up to Virginia. They're next. I'm not a Geography major, but I think that's true. So how about. Oh, first, do we need to talk about the sheep tax?
This is something we learned with Donna's research. The sheep tax. Every lamb and sheep is fifty cents per sheep.
[00:16:29] Speaker A: Wow.
[00:16:30] Speaker B: Just something crazy we learned.
[00:16:33] Speaker C: And the reason why it was crazy was because technically you're only supposed to put a tax on an animal if you can eat it.
[00:16:41] Speaker B: Right.
[00:16:41] Speaker C: And Virginia was like, you can eat a sheep?
[00:16:43] Speaker B: Yeah.
[00:16:46] Speaker A: It'S mutton.
[00:16:48] Speaker C: They're like, so prove us.
[00:16:53] Speaker A: Prove us wrong.
[00:16:54] Speaker B: They don't believe you're not going to eat the sheep is what we, I think came up with. But yes, if you can prove us wrong, somebody tell us, email us.
[email protected]. Do you eat sheep? If so, you might not owe tax or you might owe tax. Right. Fifty cents per sheep.
[00:17:11] Speaker C: Fifty cents a sheep sounds high.
[00:17:13] Speaker B: You think so?
[00:17:14] Speaker C: I don't know how many sheep do people own?
[00:17:16] Speaker A: Yeah, if you're herding sheep, anything where.
[00:17:19] Speaker C: The word herd is in front of it.
[00:17:21] Speaker B: Yes.
[00:17:21] Speaker A: It's also $0.50 ahead on each cattle. It's a cattle assessment, too.
[00:17:25] Speaker B: But the difference is we eat the cattle or we.
[00:17:28] Speaker C: Yeah, exactly. They were.
[00:17:29] Speaker B: Drink the milk. But it's like, we don't eat sheep.
[00:17:32] Speaker A: Yeah, but you use the sheep's wool.
[00:17:34] Speaker B: But we don't eat it.
[00:17:35] Speaker C: Right. It was supposed to be. The law was supposedly supposed to be for edible animals.
[00:17:40] Speaker B: Edible animals? Yeah.
[00:17:41] Speaker A: Sheep is an edible animal. They eat sheep in plenty of countries.
[00:17:45] Speaker C: No.
[00:17:48] Speaker A: England and Ireland. You're going to eat mutton. Like, I hate to tell you, you're going to have sheep's pie.
[00:17:53] Speaker B: But in the United States proper, I.
[00:17:56] Speaker A: Mean, I'm pretty sure that there are plenty of people that eat sheep here, cousin Eddie.
[00:17:59] Speaker C: They must. I mean, Virginia is like, listen, we need to tack this. People are eating all of our sheep, dude.
[00:18:06] Speaker A: I mean, I've eaten some weird beep. United States, I've eaten nutria. So have you eaten nutria?
[00:18:11] Speaker B: I don't even know what that is.
[00:18:12] Speaker A: It's a giant water rat. That's in freaking Louisiana.
I'm serious.
[00:18:17] Speaker B: Do you kiss your mother with that mouth?
[00:18:18] Speaker A: Dude, it's God's honest truth. Like, look it up. You can actually eat nutria in Louisiana.
[00:18:22] Speaker B: Why? Why would you do that, though?
[00:18:24] Speaker A: Well, because they're trying to find a way to get rid of these things because they're an invasive species now. They brought them down to do something to control snakes or some other.
[00:18:33] Speaker B: But why do you eat it?
[00:18:34] Speaker A: Because you hunt it.
[00:18:36] Speaker C: Honestly, it kind of looks like a beaver. It's not as gross.
[00:18:39] Speaker B: Well, it's not like in New York City, they're eating rats to get rid of the rat problem.
[00:18:42] Speaker C: Yeah, no, I'm just like, see, it's not that radish.
[00:18:45] Speaker B: It has a rat. It is a rat.
[00:18:50] Speaker C: It's rat adjacent.
[00:18:51] Speaker A: Yeah, our nutria. Tasty.
[00:18:54] Speaker C: But to quote Jeff Goldblum, just because.
[00:18:56] Speaker A: You could doesn't mean you should in the family that consists of spiny rats.
[00:19:02] Speaker B: Told you.
[00:19:03] Speaker C: Made it worse.
[00:19:03] Speaker A: Yeah, doesn't matter. Like, dude, they're tasty.
[00:19:05] Speaker B: Do they tax nutria?
[00:19:06] Speaker A: $0.50 ahead, but guess what?
[00:19:09] Speaker B: Look it up.
[00:19:10] Speaker A: Fact is, I ain't going to be knocking on anybody eating sheep.
[00:19:12] Speaker B: Yeah, well, okay. Well, apparently they think it's a great source of revenue if you tax fifty cents per sheep.
[00:19:19] Speaker A: I'll be honest with you. I think why they ended up doing that, even though it was supposed to be on edible animals. Like, if you're looking at a livestock tax, all livestock is going to be subject to it. Are horses subject to it, though?
[00:19:29] Speaker C: That's a good question.
[00:19:30] Speaker B: Anyway, let's get back to something else about Virginia that is also kind of OD is, and we touched on this in the quiz, is about meals tax. Food and beverage tax. Meals tax is higher than the state rate. And the reason is because they can.
[00:19:46] Speaker A: That's exactly it.
[00:19:47] Speaker B: And they're the only state to do that. Correct.
[00:19:49] Speaker A: Spaghetti.
[00:19:50] Speaker B: Yeah.
[00:19:50] Speaker A: I'll give you the Homer Simpson answer.
[00:19:52] Speaker B: Or broccoli nutria.
[00:19:53] Speaker A: Yeah. Because they can.
[00:19:56] Speaker B: So we don't like that, though, do we? Or does it matter?
[00:20:00] Speaker A: I mean, in all honesty, it creates compliance complexity, which basically makes our job better.
But at the same time, it's not easy administration. And frankly, if I was a customer in Virginia, I'd be quite so, you know, no lie. I mean, if I have to go to a fast food place and if I'm just trying to get a cheeseburger and I got to pay double the amount of tax, I have to pay more tax than I would pay at the state rate for prepared food. That kind of pissed me off.
[00:20:28] Speaker B: I wonder why that is. I have to do some additional research. Like, it doesn't sound like a sin tax, does it? It sounds more like a. Yeah, I.
[00:20:34] Speaker A: Think it's just like a meal. To create. Create tax for local municipalities. That's it. Yeah.
[00:20:41] Speaker B: All right. All right. We're moving north. Moving. Do you see what I did there? Cows moving. All right, so we're going to Maryland. Is that next?
[00:20:49] Speaker A: Washington, DC.
[00:20:50] Speaker B: Oh, I guess Washington, like, right? Yeah, it's kind of the same. Okay, so we're doing Washington. Oh, Tim, say your favorite thing about Washington, DC.
[00:20:58] Speaker A: No taxation without representation. It's on their freaking license plate.
[00:21:01] Speaker C: It is on the license plate.
[00:21:02] Speaker B: It's actually taxation without representation. Not no taxation without representation.
[00:21:06] Speaker A: Well, the technical quote is no taxation without representation, but they just decided to bastardize it.
[00:21:11] Speaker C: Do they mean the same thing? If you say no, then it's a wicked difference.
[00:21:15] Speaker B: It is.
[00:21:16] Speaker A: And that's why I'm laughing. Like, at their license plate. Like, it's terrible.
[00:21:20] Speaker B: Yeah. So it is a take on, but it's like they are taxed without representation. But the saying is no taxation without representation.
They're being like, middle finger, congratulations.
[00:21:33] Speaker A: We are taxing you without representation because we're not even a legal state.
[00:21:37] Speaker B: Yes.
[00:21:37] Speaker A: We're just a common or a district.
[00:21:39] Speaker C: They get to vote.
[00:21:40] Speaker A: Yeah, they do get to vote.
[00:21:43] Speaker C: What else do you.
[00:21:45] Speaker B: So, okay, what are we going to talk about with Washington DC as far as taxation without representation?
[00:21:55] Speaker A: The taxes that you pay? I think Donna had actually mentioned this about cigarettes and how ridiculous. Or was it you, JB, that actually brought up the cigarette tax? It was something about the fact that no matter what your income level is. So, yeah. Pack of cigarettes in Washington, DC, 503 is the current rate of tax on a pack of smokes per pack. Per pack, yeah.
[00:22:17] Speaker B: So is this another situation where we're going across the border, go to Virginia?
[00:22:21] Speaker A: Heck yeah, dude. It's literally free with just jump right across the potomac.
[00:22:26] Speaker B: That's what we were talking about.
[00:22:27] Speaker C: Jug of milk and here's a carton of cigarettes.
[00:22:29] Speaker B: Yes. My tobacco road university I went to just let us buy cigarettes on our meal card. So they just give them out places.
[00:22:37] Speaker A: That's pretty awesome.
[00:22:37] Speaker B: Yeah. So Washington DC loves their taxation.
[00:22:40] Speaker C: That's a sin.
[00:22:41] Speaker B: Tax on sins.
[00:22:42] Speaker C: But that's to the max.
[00:22:44] Speaker B: I feel like Washington DC is not really on my you know what list.
[00:22:48] Speaker A: I think it's your nasty list.
[00:22:49] Speaker B: On my nasty list, I think they're what? They have 6% state sales tax, what, 10% food and beverage tax?
[00:22:57] Speaker A: I think so, yeah.
[00:22:58] Speaker B: So it's pretty simple. Got a great website.
Haven't really had any issues with them, so. Good job, DC.
[00:23:04] Speaker A: Yep.
[00:23:05] Speaker B: Okay, so Maryland, speaking of syntaxes, Maryland has a tax on snack food and also attacks on software that they then repealed six months later, which is one of our favorite topics as well.
[00:23:18] Speaker A: Yeah, they got hammered apparently on lobbying efforts because they tried taxing everything with relation to software. And then they were like, maybe we need to reel this back in a little bit.
[00:23:29] Speaker B: Yeah.
[00:23:29] Speaker C: Wait, six months is incredibly. I mean, even to get. When you get something wrong. That is so fast.
[00:23:33] Speaker A: It's kind of funny. There's actually a few states in history that have tried that. Like Michigan tried taxing every single service. They just said, we're going to make every service taxable. Like legal services, accounting services, dry cleaning services, everything's going to be taxable. And a few months after they put it in, people freaked out so hard they're like, yeah, we screwed up. We're sorry about that. We're going to reel it back. Well, Florida did the same thing too.
[00:23:57] Speaker B: Yeah. And Maryland, another state we were just talking know, borders, the District of Columbia, with a lot of what? Federal government contractors, a lot of software companies. Right. Headquartered around in that area. So I'm sure they did have some successful lobbying, obviously, to repeal that tax. I would guess so, yeah, because six months is.
[00:24:16] Speaker C: They brought it into the security services.
[00:24:19] Speaker B: Yes. There you go. Security services.
[00:24:21] Speaker A: Bingo.
[00:24:22] Speaker B: Yep. There you go.
[00:24:23] Speaker A: Or their snack tax.
[00:24:24] Speaker B: Snack tax. I do not like taxes on my snacks. So, boom. Maryland on that. Okay, so what else we got moving upwards?
[00:24:34] Speaker A: We're got two more states going to hit West Virginia and then our good friends in Delaware, which don't really have a tax, but we can talk about their tax on gross receipts.
[00:24:43] Speaker B: Have you seen that meme? That's like almost heaven. And then someone's like, oh, that sounds so awesome. I wonder where it is. Hawaii or that's like West Virginia. Oh, never mind.
[00:24:55] Speaker A: See, I've never seen a meme sing to me, though.
[00:24:57] Speaker C: Yeah.
[00:24:58] Speaker A: Have you seen that meme? And then she busts into song and I'm like, you know, I haven't really seen a meme.
[00:25:03] Speaker C: To me, she just really wanted to visually bring you in that she was doing John Denver and sounded exactly like him.
[00:25:10] Speaker B: Oh, totally.
[00:25:11] Speaker A: Just like you were doing John Denver. Wouldn't you be, like, getting high and crashing an.
[00:25:16] Speaker B: Okay, put that on the apology list.
[00:25:18] Speaker A: Yeah.
[00:25:19] Speaker C: John Denver.
[00:25:20] Speaker B: Ouch.
[00:25:21] Speaker C: Goodness.
[00:25:22] Speaker A: Just saying, man.
[00:25:24] Speaker B: Okay, I'm just saying, if I'm reading the meme, I'm singing it in my head. So I'm just saying. That's kind of funny. People are like, almost heaven. Ooh, that sounds lovely. And then it's, oh, west. Sorry, West Virginia. I need to apologize to you about that. I'm sure you're lovely.
[00:25:36] Speaker A: And they show you a picture of Joe Manchin.
[00:25:39] Speaker B: Oh, jeez. Oh, my God, Tim, you're over two on this one. Okay, the local BNO, we touched on this a little earlier as well.
The fact that it exists, that they have local BNO taxes is a little weird.
Not too many states do that. Right? Like the state of Washington does mean.
[00:25:59] Speaker A: Yeah, it's basically like, if you think about it, all the states gotten into an alphabetical party and they decided to let everybody get up into the food line in alphabetical order. And then Washington and West Virginia were left, like, hanging out, waiting last. And they're like, so what's weird about your state? And Washington's like, well, hell, I got local level BNO at the city level, and West Virginia's like, damn, that's a good idea. Let's steal it. Next thing you know, congratulations. They both do. And it's really kind of OD that both of them start with the letter w. And, hey, they're the only states that have local level bno.
[00:26:30] Speaker B: And don't you think and I could be wrong about this. Do you think that it would make more sense if West Virginia were more of a travel destination?
[00:26:38] Speaker C: Right.
[00:26:38] Speaker B: To have B O?
[00:26:40] Speaker A: Excuse me.
What's that famous resort that's there in West Virginia? Charlotesville.
[00:26:46] Speaker B: I know. I'm like, that's in Virginia? Almost heaven.
[00:26:50] Speaker A: No, it's the one that's in white sulfur springs.
They have a golf tournament there every year. Oh, my gosh.
[00:26:56] Speaker B: Oh, so you're asking us. Excuse me. You've never heard of. But you have the greenbriar?
[00:27:00] Speaker A: Yeah, the Greenbriar. Remember? They've got, like, a nuclear fallout shelter that's underneath it. And people used to say that it was like an escape for congressional leaders and, like, the president and stuff. Like that's where they were going to.
[00:27:11] Speaker C: Go if there was a. I'm not taking vacation there.
[00:27:14] Speaker A: It's gorgeous. You should go to the greenbriar. It's actually really pretty.
[00:27:18] Speaker B: From what I'm JB, I'm glad you're on my side of it.
[00:27:20] Speaker C: Maybe I'll go.
[00:27:20] Speaker B: Yeah, I know. But in general, though, when you think of vacation destination, we are not thinking of West Virginia. You could probably do something better. Like, you tax sparklers in West Virginia. Is what I heard.
You pay a bunch of royalties on things like rent, on weird things like that.
[00:27:38] Speaker C: Well, the sparklers was weird because everybody does fireworks. That's a thing. But they were like, no, sparklers.
[00:27:45] Speaker A: Sparklers are specifically everybody else.
[00:27:49] Speaker C: It's just a sparkler, you weirdo. And they're like, no, it's a firework.
[00:27:53] Speaker A: Yeah.
[00:27:54] Speaker C: No fun in West Virginia.
[00:27:55] Speaker B: No fun. Tax everything, including your food.
[00:27:58] Speaker C: So every year, my wife and I go on an anniversary trip to the letter of the year in which we were born. So this will be seven. So that's G and ABCDef.
[00:28:09] Speaker A: Yeah, greenbriar.
Take her to the greenbriar. Dude, I'm telling you, man, it's not in Greenbriar, West Virginia. It's the Greenbriar Hotel in white sulfur.
[00:28:20] Speaker C: That's not bad, because honestly, it's supposed to be, like, a place that maybe would never really go on a mean. You'd be like, oh, go to. Sure, but we can just go to Greece, right? Maybe I'll go to Greenbrier.
[00:28:32] Speaker B: There you go.
All right, we're moving up the map. We are done. Just. Wow. Ripping West Virginia. Sorry. West Virginia.
[00:28:41] Speaker A: We didn't rip it, too. You know, we got to talk about some greenbrier stuff. Home of golf.
[00:28:46] Speaker B: I apologize for my singing. So I think the last one on our list. Right.
[00:28:50] Speaker A: Is Delaware our first state?
[00:28:52] Speaker B: Yes, it is our first date. And they have no sales tax, but they do have a gross receipts tax.
[00:28:57] Speaker A: Yep.
[00:28:58] Speaker B: So it also is pertinent to our discussion because we have several clients that meet the threshold in that state and have to pay grocery seats tax.
[00:29:06] Speaker A: That's exactly right.
[00:29:07] Speaker B: And do they do that, Tim? Is it anything related to, like, where corporations. That's where all the corporations register or. No, has nothing to do with that.
[00:29:16] Speaker A: In all honesty, I don't know why Delaware enacted that law. I will tell you that one of the craziest things about Delaware is their unclaimed property tax laws or cheat have. And that is specifically because of them having, back in the day, even currently, you have Delaware corporations. Everybody sets up a corporation in Delaware because favorable tax treatment and blah, blah, blah. Well, the unclaimed property laws and his treatment laws, because a lot of know corporations, excuse me. Are defined as holders of unclaimed property. And that property then goes to the corporation's home address or where the corporation's headquartered. That would be Delaware. So Delaware does a lot, like, has the majority of the unclaimed property law court precedent, everything else through the Delaware magistrate court. It's really, really interesting to look at some of the court cases around his cheat and unclaimed property. We won't talk about that too much on this. It's kind of a taboo topic to talk about outside of being an Attorney or being an expert on unclaimed property. It'd be a good for us. For a deep dive. We can have one of our budies at GBQ, Jeff Monsman, who's an attorney who knows a ton about his cheat, and have him on and talk about.
Yeah, that's the gross receipts tax, though. Just a way for them to generate money. In my mind, I think that's it.
[00:30:33] Speaker B: I don't know about you, but I'm an expert on talking about subjects that I'm not an expert.
[00:30:37] Speaker C: So should we change it to the Nomad?
[00:30:40] Speaker A: Nomad?
[00:30:42] Speaker C: I mean, they're doing the sales.
[00:30:44] Speaker A: Here's the problem. You say that you want to get rid of Delaware out of Nomad because they technically have a tax on gross receipts. Well, guess what? New Hampshire technically has a sales tax.
[00:30:53] Speaker C: Oh, never mind.
[00:30:54] Speaker A: And Alaska has a sales tax as well. As one of our listeners so politely pointed out to us that, oh, hey, you were wrong. Alaska does have sales tax. It's like, well, the state doesn't. It's at the local level.
[00:31:07] Speaker B: But yes, the nomad really applies to state sales tax.
[00:31:10] Speaker A: That's right.
[00:31:11] Speaker B: Which Delaware does not have. They have a state gross receipts tax, not a sales tax. And same with Alaska. They don't have a state sales tax. So we can come up with other acronyms of know what are the states that don't have a grocery tax? And that might be like.
[00:31:25] Speaker C: That'd be very.
[00:31:26] Speaker B: So, um. So, yeah, I think it's a good. Still rule of thumb.
[00:31:29] Speaker C: We'll have Donna.
[00:31:30] Speaker B: Yes, Donna can do that.
[00:31:32] Speaker A: All right, we've got a couple of.
[00:31:33] Speaker C: Apologies before we wrap up. Auditors. I am going to cut out that section, but you don't need to know why.
[00:31:38] Speaker A: But.
[00:31:39] Speaker C: Sorry.
Citrus county in Florida, Tim suggested they might like to do methamphetamine. Yeah, rats.
[00:31:48] Speaker A: Look, if you got a city that's named Homa Sassa. Are you serious? Obviously. That sounds like some crackhead was like, hey, give me some of that.
[00:31:57] Speaker B: Just my hometown, Tim. No big deal.
[00:31:59] Speaker C: I know the apologies.
[00:32:00] Speaker B: He's going in hard on my rats.
[00:32:04] Speaker C: Because we talked about them eating them a lot. And just for people I don't know.
[00:32:09] Speaker A: We did not talk about eating rats. We didn't talk about nutria.
[00:32:13] Speaker B: And I am not.
[00:32:14] Speaker A: Nutria is not a rat.
[00:32:15] Speaker B: I'm not apologizing to rats.
[00:32:18] Speaker C: John Denver. Sorry. John Denver. Tim made a. He died, like, 1971. Still was too soon.
[00:32:25] Speaker B: Too soon.
[00:32:27] Speaker C: And then West Virginia.
[00:32:29] Speaker A: Rocky Mountain High, baby.
[00:32:30] Speaker C: West Virginia. The state. Seems like we did pick on them.
[00:32:32] Speaker A: More than the other you guys picked on them. I actually think West Virginia is a pretty great state. I love you all West Virginia mountaineers. Go on, baby.
[00:32:38] Speaker C: Maybe that was more us somehow. Florida. Oh, Citrus county. Okay, that did get the Florida. All right, those are our apologies. Jenny, you want to take us home?
[00:32:45] Speaker A: Take us home.
[00:32:46] Speaker B: Yes. Just a reminder, if you need any help with any of these issues we brought up today, you can call us at senexist tax solutions or email us at
[email protected]. And we would love for you to listen to our other episodes. Just a reminder, you don't need to listen to them in order. And you can find us on apple, Spotify, Stitcher and YouTube music. Thanks so much for joining us today. We'll see you next time on taxing poetic.
