The U.S. economy is still in the doldrums, but states had a banner year in 2012. How did they do it?
Simple answer? They leveraged everything in their power to bring new tax revenue into their coffers. How? By relying on new enhancements to existing tax collection procedures. By leveraging advanced technological approaches to identifying new tax revenue streams. In short, by any means necessary.
According to the US Census Bureau, state tax revenue for 2012 was at an all time high of nearly $795 billion. To put that into perspective, that represents an increase of about 13 percent from 2010. Meanwhile, the US GDP grew by an anemic 5%, (based on 2009 real dollars), during this same two year period. (Figures for 2013 have not yet been released, but I’d be surprised if they didn’t support the trend).
Strapped for cash during the recession, states have increasingly been adopting new legislation intended to generate additional revenue. In addition, their departments of taxation and revenue have been aggressively pursuing additional monies by looking for new taxpayers, increased compliance and squeezing more tax dollars out of audits.
Make no mistake about it – states are getting increasingly creative and serious about increasing tax revenue. And multistate taxpayers are their prime target.
In future posts, we’ll offer some insight on what businesses should be doing now to be ready when the state taxing authorities come knocking on their doors.