The 16th Amendment, passed in 1909, granted Congress the power to collect taxes from individual states. This amendment was a response to the growing discontent among farmers in Pennsylvania, who were angry at the tax on their whiskey and had resorted to setting fire to the homes of tax collectors. This event highlighted the age-old aversion to taxes and the importance of the Constitution. The tax plan as we know it today has evolved over time, with a series of reforms and changes that have their roots in pre-independence United States. In July, Colorado residents will be subject to a retail shipping fee, a tax of 27 cents per sale that will be paid on all deliveries that include at least one item subject to sales tax.
The Inflation Reduction Act also includes some notable tax changes. The gas tax is a combination of taxes levied on gasoline at both the federal and state levels, which are used to fund road repair and maintenance, as well as other government infrastructure projects. New Mexico recently passed HB 163, which is the first state law in many years to lower its sales tax rate at the state level. This law also consolidated five individual income tax brackets into four and reduced the second highest rate from 3.1 to 3 percent.
Taxpayers can also make estimated or additional tax payments to avoid an unexpected tax bill and possibly a penalty. Local sales tax bases may vary from the state base, but this new law prevents those local bases from including certain types of prescription drugs. Unlike sales tax, gross revenue tax applies to businesses and applies to business-to-business transactions, in addition to purchases by end consumers, leading to a tax pyramid. The proposed changes would reduce the ability of family members to use a company to change the tax base of assets among themselves. This is an important step towards ensuring fairness in taxation and preventing individuals from taking advantage of loopholes in the system.
