Sunday, October 31, 2010

Cost Detail for Tax Freedom and Internet Tax Freedom

Jamie for State Rep In 2008, the number of business locations that remitted greater than or equal to $17,500 in combined state Sales and Use tax was 29,939. Their total state Sales and Use Tax (Total Tax) was $4,362,074,123.

In 2008, the number of business locations that remitted less than $17,500 in combined state Sales and Use tax was 129,958. Their total state Sales and Use Tax (Total Tax) was $311,974,251.

$311,974,251 - small biz < $250k taxable
$2,000,000 - sales and use paper-filed (unregistered individuals)
523,932,500 - cost of big biz $17,500 exemption ($17500 * 29,939)

$837,906,751 total cost with all brick & mortar sectors included and big biz $17,500 exemption included.
$313,974,251 total cost with all brick & mortar sectors included and big biz $17,500 exemption excluded.

Now, of the $837 million above in potential government lost revenue after enacting Tax Freedom for all (up to $250k), representing 160,000 Minnesota companies, what percent is internet related? If the average Minnesota company gets a small portion of their revenue from online commerce, then the expected loss of revenue for Internet Tax Freedom will be as low as $60 million (7.16% of $837 million). Many Minnesota companies are not yet online (Menards is just one example). Enacting Internet Tax Freedom will cost little, and encourage all companies to be "computer literate" by helping them engage in online commerce based in Minnesota.
Enacting Internet Tax Freedom will increase the vitality of the Minnesota economy and improve Minnesota's livability by enabling grown children to better support their elderly relatives.

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