State and Local Taxation

Introduction

Taxation is a set of rules as in when it should be paid, who pays the tax to whom and how much is the tax to be paid. Taxation is a process or means by which the ruler increases income to settle the required expenses of government, through its law-making body. A tax is a payment made to the government by an individual who has earned certain amount during a year. Income tax is a most important basis of income to the government. In other words it is an amount charged by a government on products, income, or activities. There are two types of taxes direct tax (which is charged on personal and corporate income directly) and indirect tax (which is charged on the prices of services and goods).

Tax consideration is an important factor in immigration and mostly in decision relating to business expansion. Tax structure of states and countries differ as per their government policies and economic conditions. When considering business expansion decisions or immigration, one needs to study various taxes that will be levied as well as exemptions to enable astute judgment and decisions. The paper will discuss the tax structure of various countries mentioned in the case and as per the assessment reach to a recommendation.

Case Discussion

Considering the offer letter from my employer, I would first assess the tax structure of all five countries primarily based on Sales Tax, Income Tax and Property Tax rates and exemptions. The reason behind particularly selecting these taxes is because it will have direct incidence on my spending while excise and business taxes relatively does not affect my spending.

Sales Tax

The sales tax structure of these countries is (Tax Information, 2012);

 

Sales Tax

Max

Arizona

6.60%

10.60%

Colorado

2.90%

8.00%

Maryland

6.00%

6.00%

Pennsylvania

6.00%

8.00%

Florida

6.00%

7.50%

Notes

Arizona

Groceries and Prescription Drugs are exempt

Colorado

Groceries are exempt from the Colorado sales tax

Maryland

Groceries and prescription drugs are ...