I regularly tell clients that cash-starved states have become very entrepreneurial and even aggressive in their tax collection efforts. If you earn money in a state, the tax department will probably be willing to go to court to collect income taxes even if you live hundreds of miles away. (I’m looking at you, New York State.) Revenue departments review business filings and public records to determine if a business has any type of a presence (called “nexus” in tax-geek world) that would make the business liable for state taxes. I even saw an author get a letter from a state tax department informing her that she owed taxes on any books that she sold directly as part of a speaking tour.
And now, something new: Don’t pay your state taxes and you could lose your driver’s license.
Again, we turn our lonely eyes to Albany, where thousands of drivers have had their licenses suspended, as The New York Post reported. The state program targets residents who owe more than $10,000 in back taxes.
The program has resulted in more than $50 million in back taxes coming into state coffers. You can’t argue with success.