Do you live in California and have questions about your taxes? You’re not the only one, especially after some recent news about slowing revenue improvements, even as tax collectors in state governments across the United States report gains over previous years. According to a study cited on CNBC, the 3 percent increase in tax revenues over the previous year after 10 straight quarters of gains wasn’t enough to stop the slowing growth of state revenue improvements. And some states, such as California, are not only seeing slowed growth; they are seeing steady drops in revenue for their state governments.
What This Means for States like California
The study cited by CNBC, which was conducted by the Nelson A. Rockefeller Institute of Government, analyzed preliminary data on 2012 tax collection around the nation. California was one of eight states to have seen drops in state revenues. The state reported a 4.9 percent drop in revenues, despite being the most populous state. The state is also expecting to see some temporary tax increases expire, which could further decrease state revenues. Six of the eight states reporting drops in revenues the last quarter can say they saw an overall growth in tax collection for 2012 compared to 2011, but California and Delaware haven’t reported such growth.
Not All Bad News
Experts at the Nelson A. Rockefeller Institute of Government and other agencies stress that state revenues are continuing to improve, despite some slowing in that growth over the last four quarters. In fact, in the second quarter of 2011, an increase in tax collection gains of 11.8 percent was reported nationwide. State economies are continuing to show improvement, but states like California and Delaware are a bit behind in that respect. Growth may take longer in California, where the population is massive, diverse and spread across a vast expanse of varying geographies, communities and economies. The good news is that there is growth around the nation.
Info for Taxpayers
Just because you live, work and/or own a business in California doesn’t mean you are destined to a life of higher taxes and lower revenues. If you are a taxpayer and/or business owner in California with questions about your taxes, a business expert and/or tax accountant from Allen Barron can provide knowledgeable answers and consulting services. Having a plan, a budget and the support of professional accounting and bookkeeping is the first step toward a balanced business budget.
We can answer your questions and help you with tax planning to lower your taxes. Please give us a call at 866-631-3470 to schedule an initial, complimentary consultation with one of our tax professionals.