Two Letters Re: Sales Tax as a Criteria for Choosing Your Retreat Locale

Sir:
Just saw your new blog posting on sales taxes in various states. Colorado’s overall sales tax is 2.9 percent, however our state allows locality taxes (called ‘Home Rule’), For instance: Denver city/county imposes a 3.5% tax in addition, it goes up to 4% for food/liquor that is for immediate consumption and 5.5% for rental cars. There are also special district taxes, like the Scientific and Cultural Facilities tax and the Regional Transportation tax. These taxes cross municipal boundaries as established by special election.

In Denver, for instance the overall tax rate is about 8 percent, 2.9 to the state, 3.5 to the city/county and the rest are special district taxes. A few rural areas do not have additional taxes and pay only 2.9% , but some counties bump that by a percent or two, as well as special tax districts assessments.

When buying major items for sales tax purposes, the rule is that unless they deliver it to you, you pay the rate where the store existed – no you can’t deliver it yourself. One of the few exceptions to this is your car, where you pay the rate of your address of record. I, for instance, have my retreat property in SW Colorado and use it for vehicle registration purposes.

So, it might be better to remove Colorado from the Very Low Sales Tax category as even if you do live in a 2.9 percent area, you’ll probably be paying the full rate at the store in the bigger cities.
– J. H. in Aurora, Colorado

 

Jim,
States with no personal income taxes have begun to impose them in hidden forms, starting in Nevada. I don’t know if it is intentional or not, but the way Nevada has done it has managed to make everyone miss the fact that it now has an income tax, however hidden or indirect it may be. While there is no direct state income tax (in which the tax is withheld from individual paychecks, or personal filing is required,) the state has indirectly imposed a personal income tax in the form of a “payroll” tax, arguably imposed on employers, charged on the amount paid to all employees. However, this makes it a hidden income tax that is figured into the cost of hiring; as such, the pay rate to individual workers is lowered by that much. The effect is that workers take home the same amount of pay as if they had a “personal income tax” withheld from their checks, but without seeing any entries making the deduction visible on their pay stubs. Taxing has been described as “the art of plucking feathers from a goose without its knowledge.” For a state to put a personal income tax in place in a way that workers don’t see it directly coming from their checks is a masterful way of doing that very thing. But just because a tax is not seen doesn’t mean that it doesn’t exist. -“M.” in Nevada