Business owners, sales people and employees who have to use their automobiles for business, received good news last week when the IRS announced that the mileage rates for the second six months of 2011 (July 1- December 31, 2011) will increase from 51 cents per mile to 55.5 cents per gallon. A 4.5 cent per mile increase.
Typically, gas mileage rates are increased once per year (usually at the beginning of the year), but as a result of increased gas prices at the pump, the IRS made this adjustment mid-year. "This year's increased gas prices are having a major impact on individual Americans. The IRS is adjusting the standard mileage rates to better reflect the recent increase in gas prices," said IRS Commissioner Doug Shulman. "We are taking this step so the reimbursement rate will be fair to taxpayers."
The table below list the mileage rates for the first six months of 2011 and the new mileage rates.
| Purpose |
Rates 1/1/2011 - 6/30/2011 |
Rates 7/1/2011 - 12/31/2011 |
| Business |
51 |
55.5 |
| Medical/Moving |
19 |
23.5 |
| Charitable |
14 |
14 |
For those that use their vehicle for business purposes, the individual has a choice of deducting actual costs of using the vehicle for business purposes or deducting business mileage.
To use the actual cost for the vehicle, you will have to maintain all receipts and records related to business use for the vehicle and then total up the cost.
Keeping track of mileage is much simpler, you only have to keep a mileage log and record the business mileage usage of the vehicle. The mileage log for the vehicle becomes your business usage record and should be kept with your tax return and all other related financial receipts and records. A mileage log can just be an inexpensive notebook recording the date, where you are going, the purpose of the trip and the mileage.
Effective July 1, 2011, North Carolina's gas sales tax will increase from 32.5 cents per gallon to 35 cents per gallon. The increased gasoline tax will place NC in the not so enviable position of being third highest in the nation for a state imposed gas tax.
The NC gasoline sales tax increase will be 2.5 cents per gallon, increasing the state imposed gasoline sales tax to 35 cents per gallon. When all other gasoline taxes are applied, the total sales tax per gallon of gasoline in NC will be 53.7 cents per gallon. At a total pump price of approximately $3.50 per gallon this amounts to a sales tax of approximately 17%.
In NC the gasoline tax is adjusted semi-annually (July 1 and January 1 ) and is based on a formula that fluctuates with wholesale price.
Senator Clark Jenkins, D-Edgecomb, NC, a former State Board of Transportation member in NC and current state senator in remarking about how the gas tax was capped in 2006 after Hurricane Katrina, "It cost us a lot of money, I don't think the gas tax affects the price."
The table below includes the gasline tax broken down by state. What do you think? Do you feel the impact of the cost of gasoline at the pump everytime you fill-up with gas? Does it help to have a sales tax increase amongst historically high gas costs at the pump? Leave your comments below.
|
US Gas Tax By State - June 2011
|
|
State
|
Total Gas Tax (Local + State + Federal)
|
State
|
Total Gas Tax (Local + State + Federal)
|
|
Alabama
|
39.3
|
Montana
|
35.7
|
|
Alaska
|
26.4
|
Nebraska
|
45.7
|
|
Arizona
|
37.4
|
Nevada
|
51.5
|
|
Arkansas
|
40.2
|
New Hampshire
|
38
|
|
California
|
66.1
|
New Jersey
|
32.9
|
|
Colorado
|
40.4
|
New Mexico
|
37.2
|
|
Connecticut
|
63.6
|
New York
|
65.6
|
|
Delaware
|
41.4
|
North Carolina
|
51.2
|
|
DC
|
41.9
|
North Dakota
|
41.4
|
|
Florida
|
52.8
|
Ohio
|
46.4
|
|
Georgia
|
39.2
|
Oklahoma
|
35.4
|
|
Hawaii
|
64.2
|
Oregon
|
49.4
|
|
Idaho
|
43.4
|
Pennsylvania
|
50.7
|
|
Illinois
|
61.2
|
Rhode Island
|
51.4
|
|
Indiana
|
55.6
|
South Carolina
|
35.2
|
|
Iowa
|
40.4
|
South Dakota
|
42.4
|
|
Kansas
|
43.4
|
Tennessee
|
39.8
|
|
Kentucky
|
40.9
|
Texas
|
38.4
|
|
Louisiana
|
38.4
|
Utah
|
42.9
|
|
Maine
|
49.4
|
Vermont
|
43.4
|
|
Maryland
|
41.9
|
Virginia
|
38.1
|
|
Massachusetts
|
41.9
|
Washington
|
55.9
|
|
Michigan
|
56.1
|
West Virginia
|
50.6
|
|
Minnesota
|
45.6
|
Wisconsin
|
51.3
|
|
Mississippi
|
37.2
|
Wyoming
|
32.4
|
|
Missouri
|
35.7
|
|
|
Last week in, our posts, Payroll, Hiring, New Employee and Why I9s are important, Part 1 and Part 2, we highlighted how 
important I9s are. Today Laurie Seagull posted an article on CNNMoney.com, 1,000 firms targeted in illegal hiring crackdown. Her article underscores the importance of having each employees' I9 properly filled out and on file.
Gillian Christensen, a public affairs spokesperson from The U.S. Immigration and Customs Enforcement (ICE), released a written statement regarding the increased number of I9 audits: "the inspections will touch on employers of all sizes and in every state in the nation, with an emphasis on business related to critical infrastructures and key resources."
The articles goes on to highlight the importance of this issue:
"The audit surge is an effort to crack down on employers who hire illegal immigrants, an issue Secretary of Homeland Security Janet Naploitano began focusing on in April 2009. "
Christensen's released statement, in the article, is quoted further: "As part of that strategy, we radically stepped up the use of I9 audits. Basically they were barely doing them."
As we pointed out in Part 1 of our post, by law it is the employers responsibility to:
- Verify the identity and eligibility of employment in the US for each worker hired.
- Maintain a file for all I9s which can be provided to investigators upon request.
The I9 only takes a few minutes to fill out while the consequences of not filling out and having I9s on file is extremely high...why run that risk.
To help organize your employee files and highlight the forms that, by law, you must complete and have on file we put together a New Hire Forms Checklist that you can download for free.
Because of the increased strain on states' budgets in recent years, every state is looking for additional sources of tax revenue to balance it's budget while minimizing the budget cuts they must make
Last years in a post titled Are You an On-Line retailer? If So, You have a Big Time Ally in Amazon, we highlighted the battle brewing between some of the states and Amazon. Over the past year additional states have jumped into the fray and have attempted to pass legislation requiring Amazon to collect sales tax.
Amazon, is fighting back aggressively, discontinuing relationships with its affiliates and pulling jobs in states requiring sales tax be collected. Jeannine Pogi posted a great article "Amazon Sales Tax: The Battle State by State" and map that details the state by state battles between the states and Amazon.
Source: Jeannine Poggi, Amazon Sales Tax: The Battle, State by State from theStreet.com
In addition to the state by state battle being fought, Senator Dick Durbin (D-Ill.) plans on introducing a bill later this month called the Main Street Fairness Act. If passed, it would require all businesses to collect sales tax in the state where the consumer resides.
Currently there are approximately 30,000 state and local sales-tax jurisdictions. Imagine, as a business owner keeping up with all of the requirements and changes for some 30,000 locales where the sales tax requirements are constantly changing. What may be taxable in one jurisdiction may not be subject to sales tax in all other locales.
This was part of the basis for a 1992 US Supreme Court ruling (Quill vs. North Dakota). It ruled states could not force retailers to collect sales tax, unless the retailer had a presence in that state. The court reasoned that because the rates in every state, city and county and the products or services taxed were all different, it would be impossible for a retailer to keep track and conform to all the various sales tax laws and rates across the country.
Despite this Supreme Court ruling, a number of states are pressing forward to force Amazon and all other e-commerce retailers to collect and report the sales tax collected.
If you are expanding into another state it is important to understand the laws, licensing and tax reporting requirements of each state. To assist you we put together a list of links to connect you to each state's business web site. Go here to get your list of links.
In part 1 of the article we highlighted the responsibility that an employer and an employee has with regards to the I9 and why it is important to have the I9s filled out correctly and on file when new employees are hired and started on payroll.
This article focuses on the consequences you face if you fail to have I9s properly filled out and on file. It is essential that employers take the time to setup an internal process and procedures to validate they have I9s on file for all employees, they are filled out correctly, located in one folder or binder and can be readily accessed.
Employers who violate the law may be subject to civil fines and criminal penalties as outlined in the tables below. In addition, if you have government contracts, or intend to compete for government contracts, I9 violations can cause debarment from government contracts.
For substantiated charges of discrimination against you, you can be subject to a court order requiring you to pay back pay to individuals you were found to discriminate against as well as be required to hire individuals you discriminated against.
The I9 only takes a few minutes to fill out while the consequences of not filling out and having I9s on file is extremely high...why run that risk.
To help organize your employee files and highlight the forms that, by law, you must complete and have on file we put together a New Hire Forms Checklist that you can download for free.
When hiring new employees, the I9 is one of the most important forms that an employer must make sure is completed correctly and kept on file. Prior to running any payroll for a new employee, 
an employer should verify that all the paperwork is in order including the I9. Failure to have I9s properly filled out and on file can result in fines and could lead to criminal violations.
By law it is the employers responsibility to:
- Verify the identity and eligibility of employment in the US for each worker hired.
- Maintain a file for all I9s which can be provided to investigators upon request.
There are a couple of very important requirements that employers have to comply with as part of their recruiting and hiring process:
- Employers cannot discriminate against any individual authorized to work in the United States because of their national origin or citizenship status. This includes discrimination during the recruiting, hiring or discharging of an employee.
- Employers cannot specifiy which documents they will or will not accept. The List of Acceptable Documents is spelled out on the last page of the I9. An employer that refuses a document because of a future expiration date, may open themselves up to charges of illegal discrimination.
It is not just the employer that has an obligation and legal requirement regarding the I9. Employees must also be truthful when filling out the I9. The employee fills out and signs the first section of the I9 attesting to the truthfulness of the information stated on the form and documents they provide. An employee that lies or provides false documents on the I9 can be subject to fines or imprisonment.
In part 2 of our blog post we will review the fines and penalties an employer is subject to for failure to comply with the I9 requirements.
Learn more about the forms required for your new hires and stay organized with our New Hires Form Checklist.