Gasoline Tax Rates

Gasoline prices continue to rise so I thought it would be useful to look at the gasoline taxes in each state. New York has the highest gasoline tax rate of $0.49 per gallon while Alaska has the lowest gasoline tax rate of $0.08 per gallon. On top of the state and local gasoline taxes, the federal government taxes gasoline at $0.184 per gallon. The average gasoline tax when adding in the federal taxes is $0.488 per gallon.

For Tax Foundation data on state gasoline tax rates see this link

For state, local, and federal gasoline taxes depicted on a map see this link

Citizens for Tax Justice Report: Policy Options to Raise Revenue

Citizens for Tax Justice published a report today explaining why Congress should raise revenue by eliminating tax loopholes and tax subsidies. The report goes on to outline eleven specific options to raise revenue and how much revenue could be raised from each option. The table below briefly describes each option and shows how much revenue could be raised from each option.

For the complete Citizens for Tax Justice report see this link

Taxation of Meals in Major US Cities

The Tax Foundation published a study of the taxation of meals in major US cities. Meal taxes apply to prepared food eaten at a restaurant or take-out food, but sales of groceries are exempt from sales tax in 30 states. The Tax Foundation posits two justifications for the high taxes on prepared food. First, it can be argued that the high taxes on prepared food are a form of luxury tax aimed at higher-income people. Second, it can also be argued that the taxes are a form of tourism tax, because tourists are likely to be eating prepared food for most meals. The results of the ten US cities with the highest meal taxes are displayed in the table below. For the complete Tax Foundation report with meal tax data for the top 50 US cities in terms of population see this link.

More Importance Being Placed on the Tax Aspects of Corporate M&A

Ernst & Young reviewed the tax aspects of corporate M&A in its second annual¬†Global M&A tax survey and trends. 57% of the tax directors surveyed by Ernst & Young said their companies place more importance on the tax aspects of corporate M&A than they did three years ago. 56% of the tax directors said that the range of tax matters evaluated in a transaction has increased compared to three years ago. Also, 2/3 of these companies now consider the effects of tax planning in their valuations. The results of Ernst & Young’s survey show a positive trend for those working on the tax aspects of corporate M&A deals.

For a summary of the survey results see this link

For the complete report of the survey results see this link

IRS: Standard Deduction vs. Itemizing: Seven Facts to Help You Choose

The IRS released a tax tip about choosing between the standard deduction and itemizing one’s deductions. The tax tip lists seven facts to consider when choosing between the two types of deductions, and the seven facts are:

  1. Qualifying expenses
  2. Standard deduction amounts
  3. Some taxpayers have different standard deductions
  4. Limited itemized deductions
  5. Married filing separately
  6. Some taxpayers are not eligible for the standard deduction
  7. Forms to use

For an explanation of each of the seven facts see this link

Senators Propose Closing the Stock Option Tax Loophole

In one of my first posts I discussed the tax benefit Facebook will receive from its IPO. Earlier this week Senators Carl Levin and Kent Conrad proposed legislation to do away with what they called “the stock option tax loophole.”¬†Under the senators’ bill, corporations would not be allowed to claim tax deductions for stock options that are larger than the expense they report on their financial statements. The bill would also subject stock options to the same $1 million cap on deductions for executive compensation that currently applies to other forms of compensation. The bill also proposes to close many tax loopholes besides the stock option tax loophole discussed here.

For my previous post on the tax consequences of Facebook’s IPO see this link

For Senator Levin’s statement on the stock option tax loophole see this link

For more information on the complete bill see this summary

Treasury Department Responds to Criticism for Changing NOL Rules in Bailout Context

On Thursday I wrote about the tax benefit given to AIG and GM by the Treasury Department, and on that same day Treasury responded to the criticism it was receiving from many commentators. In a blog post on Treasury’s blog, Treasury Notes, it responded by saying the purpose of Section 382 was not violated in the bailouts. The purpose of Section 382 is to prohibit profitable companies from acquiring companies with large NOL carryforwards and using those NOL carryforwards immediately. The blog post goes on to argue that the government is not a taxpayer so it could not use the NOL carryforwards, and therefore the purpose of Section 382 was not violated. I agree with Treasury’s justification for changing the Section 382 rule in the bailout context, but Treasury had to realize it would be criticized for giving even more benefit to these companies that were just bailed out by the government.