Saturday, May 15, 2010

The tax man cometh

It's that time of year again for the Preakness Celebration Balloon Festival at Turf Valley. One of the companies participating, Friendship Hot Air Balloon Co., is based in Howard County.

I found this tidbit on their website interesting:

Our long standing community service of providing donations and contributions(silent auctions,etc.) of Hot Air Balloon Flights is now ended. This is because Maryland Comptroller's Dept. is imposing and enforcing a state admissions and amusement tax (7.5-10%) on our business in direct violation of a federal law and a US Supreme Court ruling. Comptrollers refuses to recognize that 'States are preempted by federal statute from assessing any taxes on gross receipts of aircraft flying in 'air commerce'. Further, they do not want to realize that a hot air balloon is an aircraft regulated by the FAA.

To read about this illegal back tax and future tax on my hot air balloon company, please review and give me your thoughts! A pending (and much delayed) date for my Tax Court pre-trial hearing was finally received. It was April 14 and a Merits hearing date has now been delayed until September. It goes on and on!!!

All other states in the country do not collect such a tax and are in compliance with federal law! Maryland is not in compliance with federal law. The full financial burden of legal fees is on me as I continue to pursue setting legal precedents and to prove that we are RIGHT in our fight!

I remember reading about this case a few years ago. The Maryland Comptroller is trying to collect a 7.5-10% amusement tax on gross receipts. Note that this is a tax on gross receipts, not net income. A tax on gross receipts is EXTREMELY regressive. Gross receipt taxes would hurt a grocery store with a thin profit margin much more than, say, a law firm with a high profit margin.

As the federal stimulus money runs out, state and local governments will probably make more of a nuisance of themselves as they try to loot the tax base to pay for the budget deficits.