Does Virginia get all the tax money? Michael Pope reports on the efforts to take action against tax avoiding companies.
In recent years, there has been growing concern that businesses are finding new and creative ways to avoid paying taxes.
Chris Wodicka of the Commonwealth Institute says Virginia allows many large corporations to evade paying their fair share. “Corporations have become much more sophisticated in their government tax reduction strategy by being able to move profits between different states and subsidiaries.” The solution is to combine reporting from the parent company with its subsidiaries and affiliates.
However, Jared Walczak of the Tax Foundation says the combined reporting approach may be too complicated and ultimately counterproductive. “You might be adding a subsidiary or affiliate in another state that doesn’t have sales in Virginia. This actually reduces the amount you can tax on the domestic business. So it’s not always a pro. how this is actually possible to lose revenue. “
Legislature recently approved a study that examines how mandatory combined reporting can work in Virginia and what kind of lost revenue can be achieved by avoiding tax-avoiding businesses.
This report, provided by Virginia Public Radio, was made possible with support from the Virginia Education Association.