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> Did they even lose tax revenue other than income tax from some admin jobs? There's no doubt that there is more to lose than just the direct job losses. There
by koolba 3y ago
> Did they even lose tax revenue other than income tax from some admin jobs?
There's no doubt that there is more to lose than just the direct job losses. There's the GDP impact of those people traveling to the city, eating lunch, taking out clients, sticking around after work to socialize. It's not easy to put a number on it but it's definitely much larger than just the direct income tax losses.
> Most states have moved to market based sourcing rules for corporate taxes, so revenue is taxed where the services are received. If the clients are still in CA/NY, I presume it does not change much.
It doesn't work like that for managing assets as the client is delivering the assets to the manager in their jurisdiction. Where the manager's revenue is taxed is based on the location of those employees and the company headquarters. Not where the customer assets came from.
- User23 3y agoI assume their vig is at least 1% if not higher too so that’s at least 20 billion in management fees. If I recall correctly NYC has a 1% income tax so the City alone is missing out on 200 million a year in tax revenue. Edit: thanks for the correction
- woodruffw 3y agoFTR: NYC's income tax ranges between 3.078% and 3.876%.
- lotsofpulp 3y agoWhile not as authoritative as I would like, a quick search came up with this: https://www.mhmcpa.com/insights/article/evaluating-economic-nexus-market-based-sourcing-for-your-funds https://www.mhmcpa.com/insights/article/evaluating-economic-... > States are currently electing to move from performance-based sourcing methods to market-based sourcing, which may prove difficult for PE/VC firms that will be required to allocate management fees to the home states of their investors rather than where they conduct business. The management company may be considered to have economic nexus in a state where its fund’s investors are located if management fees are allocated to those states and economic nexus thresholds are exceeded. https://rsmus.com/insights/services/business-tax/state-nexus-and-apportionment-issues-facing-fund-management-comp.html https://rsmus.com/insights/services/business-tax/state-nexus...
- koolba 3y ago> The management company may be considered to have economic nexus in a state where its fund’s investors are located if management fees are allocated to those states and economic nexus thresholds are exceeded. Ha! One cannot even imagine the wave of litigation that will fight this effort. I don't see the States winning the cases either.
- lotsofpulp 3y agoMarket based sourcing rules have been in effect for many years now. Any litigation would have already happened.