Big corporations are allowed to pocket state sales tax that they withhold from employees?!?


JH: I want to talk about one of the practices you describe that I find to be… I don’t know, I’d say shocking, but I’m pretty hard to shock these days. You wrote about this in a Reuters column — how in 16 states, big corporations collect state taxes from their employees and pocket them.

DCJ: It’s now up to 21 states. In 21 states, they’ve passed a law that says that taxes withheld from your paycheck, for the state, can be kept by the company. Now, every employer doesn’t get this windfall — you have to have to get a deal from the government to do it — 2,700 big companies, every big company you’ve ever heard of, General Electric, Procter and Gamble, Deutsche Bank, you name it, they’ve got these deals, where they get to keep the taxes. Billions of dollars are diverted this way. You know the best thing for the companies about this?

JH: What’s that?

DCJ: The workers don’t know, because once the taxes are withheld, the state government treats you as having paid your taxes. You paid your taxes. They just then give a credit to let the company keep the taxes. I’ve called journalists. I’ve called union people who negotiate union contracts. And they say, “What are you talking about?” I showed them the work I’ve done. They go, “Oh my God!” They have no idea that this is what’s happening, and the fact that it’s spread from the 16 states when I first wrote about this and it’s now grown to 21 – eventually, all of the 44 states with income taxes are going to allow this, if we don’t put a stop to it.

http://www.salon.com/2013/03/26/major_corporations_are_pocketing_your_taxes_partner/