Pandemic-Driven Declines in Tourism Take Toll on Many States’ Revenues

Hawaii’s economy thrives on tourism and all the dollars spent at hotels, restaurants, and attractions throughout the state. So when the COVID-19 …

Hawaii’s economy thrives on tourism and all the dollars spent at hotels, restaurants, and attractions throughout the state. So when the COVID-19 pandemic forced business closures and grounded air travel in March, the islands sustained a major economic blow. Leisure and hospitality workers suffered massive layoffs, and the latest data covering August shows that state employment in the industry remained less than half of what it had been in February.

Nationally, leisure and hospitality jobs have endured by far the largest losses of any major industry. A review of U.S. Department of Labor jobs data for August, however, shows vast differences in how the industry has held up across states. Seven had incurred sharp reductions of a third or more from February’s pre-pandemic employment totals. A few others, meanwhile, had largely recovered from an initial wave of layoffs and were down less than 10%. For areas that lean heavily on tourism and hospitality, how the industry recovers matters not only for regional economies, but also for the vital tax dollars generated to fund state and local government budgets.

Leisure and hospitality employment dropped by more than 7.5 million jobs nationwide immediately following the business closures and travel restrictions issued in March. About half of the lost jobs, including temporary layoffs, have since been recovered in the industry, defined to include restaurants, drinking establishments, lodging, attractions, and related venues. Still, September job estimates remained down about 23% from February, three times the private sector’s total rate of decline.

The industry supports at least some jobs everywhere, but the resulting revenues are especially critical for tourism-dependent states. Leisure and hospitality workers accounted for a quarter of Nevada’s and nearly 20% of Hawaii’s labor force last year, for example.

The hit to Hawaii’s budget has been severe: The state’s latest revenue forecast shows an estimated 19.6% general fund tax revenue loss this year on top of a 9.7% decline in fiscal year 2020 from pre-pandemic projections. In fact, when estimated revenues for both years are compared to fiscal 2019, the cumulative decline in percentage terms is greater than any other nonenergy state, according to a Pew analysis of revenue forecasts.

No major source of tax revenue has gone unscathed. The most recent Hawaii Department of Taxation data shows that taxes on transient accommodations and rental vehicles had nearly vanished as of June, and excise taxes assessed on businesses were down about 16% over the year. Although these revenue streams sustained especially sharp declines, income taxes and other sources weren’t spared, either.

The state’s revenue losses aren’t surprising given the absence of tourists. The first week of October, the number of passengers flying to Hawaii was still down more than 90% from a year ago. Hotels and resorts have sustained severe losses as fewer travelers are checking in. Some remain open, albeit with limited capacity, but others have shut down entirely. In March, Governor David Ige (D) issued a mandatory 14-day quarantine for all arriving travelers that remains in effect. On Oct. 15, the state will implement a new pre-travel testing program that can exempt those testing negative for COVID-19 from the quarantine. Policymakers hope that could lead some tourists to opt not to cancel their plans.

Nevada also experienced a dramatic tourism slowdown. Like Hawaii, the state relies heavily on the industry to fund its budget: The hotel and casino industry generates about 38% of general fund revenue, according to figures published by the Nevada Resort Association.

In March, Governor Steve Sisolak (D) ordered nonessential businesses to close, shuttering casinos and cutting off a key revenue stream. Gaming revenues essentially disappeared as sales tax collections, which typically make up more than half of the state’s tax revenue, also plummeted. Casinos later reopened with restrictions in early June. Unlike Hawaii, Nevada has since recovered about two-thirds of the leisure and hospitality jobs it lost between February and April.

Still, the state’s gaming revenue remained down 22% over the year in August. More broadly, recent sales tax collections were down 18% in May and 4% in June.

Florida similarly expects to face sharper revenue reductions than most states, but its forecast shows smaller losses than Hawaii or Nevada’s projections. Sales taxes, which account for the bulk of the state’s revenues, are estimated to dip just 2% over the year in fiscal 2021.

The state’s economy is a long way from recovering, however, as leisure and hospitality employment remained 21% below February totals as of August. The pandemic canceled many spring break plans. Walt Disney World, which recently announced massive layoffs, and other major tourist destinations remained closed for months. In all, the number of visitors in the second quarter was down a staggering 61% from a year ago, according to Florida’s tourism bureau.

Tourism-Dependent States Project Significant Pandemic-Related Revenue Losses

The three most reliant on leisure and hospitality jobs expect major declines from prior forecasts

StateLeisure and hospitality share of total employment (2019)FY 2020 estimated revenue change from pre-COVID forecastFY 2021 estimated revenue change from pre-COVID forecast

Source: Nevada Governor’s Finance Office, Budget Division representing FY 2020 actual totals and FY 2021 estimates as of July; Hawaii Council on Revenues forecasts published March 11 and Sept. 9; Florida Revenue Estimating Conference estimates published Jan. 15 and Aug. 14.

In sharp contrast, some areas of the country rely little on the industry for tax revenue. Leisure and hospitality employees last year made up the smallest shares of the workforce in Iowa and Nebraska, two states projecting among the least disruption to their budgets from the pandemic, according to a Pew review of state revenue forecasts. Nebraska Economic Forecasting Advisory Board members said the state’s economy was holding up better than elsewhere, in part because it relies less on hospitality services.

Hawaii (-53%), New York (-42%), and Vermont (-42%) have sustained the largest percentage losses in leisure and hospitality jobs from pre-pandemic totals in February, while industry employment is down only 6% in Indiana and Mississippi. But these jobs are more important to some states’ economies than others. The losses are most critical to Hawaii’s economy, where the sector accounts for nearly 1 in 5 jobs. The industry accounts for between 9% and 12% of total employment in nearly all other states.

Of course, many factors dictate states’ revenue losses. Government-mandated closures because of the coronavirus have shuttered many businesses. Other industries, such as energy and oil production, are also struggling. States’ varying tax structures further explain why some are projecting larger losses as certain revenue streams tend to be more volatile, particularly during a recession.

Going forward, how well the leisure and hospitality sector rebounds carries major implications for state budgets. So far, industry job growth has followed uneven trajectories across states. California, Hawaii, and New Mexico all posted flat numbers or slight industry job losses in recent months despite leisure and hospitality employment remaining down more than a quarter from February. Other states have experienced stronger recoveries. Some segments of the industry, too, face larger deficits. About 40% of U.S. hotel jobs (excluding casinos) and half of performing arts and sports positions have been eliminated temporarily or permanently since February, compared with 19% for restaurants and other eateries.

In the coming months, much of the industry’s fateand that of several states’ budgetswill depend largely on the course of the pandemic.

Congressional candidates weigh in on healthcare

… Health Network of Central New York and in 2017 named Champion of Health Care Innovation Award American Life Sciences Innovation Council for …

UTICA — The Affordable Care Act, also known as Obamacare, has entered the rematch race for the 22nd Congressional District in New York, with Rep. Anthony J. Brindisi, D-22, Utica, joining a call for the U.S. Justice Department to withdraw support for a legal challenge to law, and former Congresswoman Claudia Tenney saying she sponsored legislation to protect its requirement that insurers cover pre-existing medical conditions.

Brindisi held a press conference Wednesday in Utica and released a letter to U.S. Attorney General William Barr asking that the Justice Department withdraw its backing of a lawsuit challenging provisions of the Affordable Care Act, also known as Obamacare, coming before the U.S. Supreme Court.

Brindisi’s letter to Barr said the Justice Department should support the law while the administration and Congress seek ways to improve it instead, particularly protecting the part that requires insurers to cover pre-existing conditions.

Brindisi said an estimated 63,900 people in the 22nd District rely on the act for coverage, whether through state expansion of Medicaid, which insures the poor and people with disabilities, to cover more people, or through getting health insurance through the individual-coverage exchange.

“Their health care and financial security could be at risk should the ACA be overturned by the Supreme Court. We cannot go back to a time when big insurance companies had the power to deny health insurance to Americans with pre-existing conditions or charge so much that coverage was essentially impossible to get.”

Tenney, in an interview earlier this month with the Daily Sentinel editorial board, said she, too, wants to protect pre-existing conditions and sponsored legislation to that effect while she was in Congress after being elected in 2016.

Tenney said she favored ideas such as a model that lets families join a health practice and pay a certain amount each month for care from the practice, and for maintaining public coverage for the needy and seniors.

“I co-sponsored the bill that would mandate that anyone with a pre-existing condition, and yet there was a million or two million in ads saying that I voted to take away preexisting conditions,” Tenney told the Sentinel.

Tenney added today in a statement from her campaign: “I support protecting patients with pre-existing conditions 100% … Healthcare companies should not be able to deny care to those with pre-existing conditions ever. In Congress, I was named ‘Health Center Supporter’ of the year for 2017 by Family Health Network of Central New York and in 2017 named Champion of Health Care Innovation Award American Life Sciences Innovation Council for my advocacy on behalf of patients especially those with urgent healthcare needs.

“I will always fight for those with

medical conditions especially the sick, vulnerable, and our seniors to get high-quality, affordable, and accessible care when I return to Congress no matter what.”

The case, California v. Texas, was originally brought by states against the Affordable Care ACT and by self-employed plaintiffs who primarily challenged the mandate that everyone have health insurance. The federal government does not necessarily want the entire law struck down, but is seeking court clarification and freedom from enforcing provisions that harm plaintiffs, according to the Kaiser Family Foundation, a non-profit organization that analyzes health issues and policy. The case is to be heard by the Supreme Court Nov. 10.

Bitcoin investor stunned by $ 100000 in tax debt

“Have you bought, sold, sent to someone or made a profit from a virtual currency at any time in 2020,” the IRS told US taxpayers. He demands that they …

The cryptocurrency investor, who faced with $ 100,000 in tax debt last year and was stunned, won his fight with the tax office.

In the US, the tax notifications regularly sent to cryptocurrency investors by the Internal Revenue Service (IRS) occasionally shock investors.

The latest example of this happened to a close friend of finance writer Zack Voell, who is active in the cryptocurrency space. According to the information shared by Voell on the issue, his close friend received a tax notification from the IRS last year and it was written in the letter that he owed 100 thousand dollars to the tax office for the false statement. The investor, stunned by this notification, later embarked on a struggle to prove the debt was unfair. After a year of fighting with the IRS, he was told today that he actually owed $ 600.

The IRS, the US tax collecting agency, recently sent tax letters to a large number of cryptocurrency investors that they did not declare their earnings correctly. “Have you bought, sold, sent to someone or made a profit from a virtual currency at any time in 2020,” the IRS told US taxpayers. He demands that they answer his question. The institution is said to have obtained information about investors from Coinbase.

The IRS has monitored the transactions made in 7 privacy-oriented cryptocurrencies, including Monero (XMR), Zcash (ZEC), Dash (DASH), Grin (GRIN), Komodo (KMD), Verge (XVG) and Horizon (ZEN). He opened a project proposal that he was looking for tools that would make it possible.

IRS Sends Contemporary Spherical of Tax Warning Letters to Cryptocurrency House owners

Fintech Zoom on Tuesday: “We don’t know for sure where the IRS got the user list, however we have seen Coinbase as a common exchange synced …
IRS Sends Fresh Round of Warning Letters to Cryptocurrency OwnersIRS Sends Fresh Round of Warning Letters to Cryptocurrency Owners

The U.S. Inside Income Service (IRS) has begun sending new warning letters to cryptocurrency homeowners. This adopted the tax company prioritizing cryptocurrency on its tax kinds. “The IRS is getting very serious about cryptocurrency tax compliance,” a tax knowledgeable advised information.Fintech Zoom.

IRS Sending New Warning Letters

The IRS has began sending out a brand new spherical of tax letters to cryptocurrency homeowners. A number of tax service suppliers revealed on Tuesday that their shoppers have obtained a warning letter from the IRS just like these the company despatched to about 10,000 crypto homeowners final 12 months.

There are three sorts of letters. The primary sort, Letter 6173, specifies a date by which the taxpayer should reply or their tax account can be examined by the company. The opposite two, Letter 6174 and 6174-A, solely remind taxpayers of their tax obligations. The Taxpayer Advocate Service, an impartial group inside the IRS, has mentioned that the IRS letters violate taxpayers’ rights.

“We have information that you have or had one or more accounts containing virtual currency but may not have properly reported your transactions involving virtual currency, which include cryptocurrency and non-crypto virtual currencies,” reads Letter 6174-A, shared by bitcoin tax software program supplier Cointracker. The letter is dated Aug. 14.

The IRS letter proceeds to advise cryptocurrency homeowners that if they didn’t precisely report the cryptocurrency transactions on the federal earnings tax return, they need to “file amended returns or delinquent returns.” The company warned:

If you don’t precisely report your digital foreign money transactions, you may be topic to future civil and felony enforcement exercise.

Cointracker co-founder Chandan Lodha shared with information.Fintech Zoom on Tuesday: “We don’t know for sure where the IRS got the user list, however we have seen Coinbase as a common exchange synced across users who are receiving these letters so that does seem likely.”

He continued: “We also know from the US government that in addition to Coinbase subpoena data, they also receive 1099 reports from exchanges, have subpoenaed other exchanges including non-US exchanges like Bitstamp, and are using blockchain analytics software like Chainalysis, Coinbase analytics, and Palantir. They have even gone so as far as to start trying to de-anonymize on-chain privacy coin transactions.”

Lodha outlined that previously 12 months, the IRS despatched out warning letters, added a cryptocurrency query to Schedule 1, issued new crypto tax steerage, and solicited contractors to assist them with crypto tax audits. Final week, the company moved the crypto tax query from Schedule 1 to the entrance web page of Type 1040. He emphasised:

The pattern appears to be fairly clear: the IRS is getting very critical about cryptocurrency tax compliance.

What do you concentrate on the IRS’ warning letters to crypto homeowners? Tell us within the feedback part beneath.

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Tax letter sent from the IRS makes you nervous

CoinTracker co-founder Chandan Lodha stated that most of the people who received the letter were trading on the Coinbase exchange.

The IRS, the US tax collecting agency, sent tax letters to a large number of investors stating that their cryptocurrency earnings were not properly reported.

The Internal Revenue Service (IRS), which is responsible for collecting taxes in the USA, sent a warning letter to cryptocurrency investors reminding them of their obligation to pay taxes on their transactions.

The IRS, the US tax collector, has sent a warning letter to investors who are believed not to report their cryptocurrency earnings properly. An example of the letter dated August 14 was shared by CoinTracker, which produces the software that calculates the tax that crypto money investors must pay, while the following statements were used in the letter:

“We have learned that you have one or more accounts related to virtual currencies. You may not have reported all of these transactions, including crypto coins and non-crypto virtual currencies. ”

In the letter, cryptocurrency investors were informed that unreported or underreported transactions are transferred to the institution, otherwise, criminal sanctions may be incurred in the future.

3 types of letters sent

Shehan Chandrasekera, CoinTracker’s tax and strategy manager, tweeted that the letters 6171 and 6174-A are slightly more informative and telling investors what to do, while the letter number 6173 is much more serious and definitely requires a response. transferred.

While many users on Reddit stated that they received similar letters, CoinTracker stated that they did not have information about how many letters were sent.

What does the IRS demand?

“Have you bought, sold, sent to someone or made a profit from a virtual currency at any time in 2020,” the IRS told US taxpayers. He demands that they answer his question. The institution asked the same question to taxpayers last year, but this question remained in writing on a form that investors had to request themselves. The taxpayers who did not request this form or could not reach it did not deliver the necessary information to the institution, either knowingly or unknowingly. This time, the question was sent directly to the people by letter.

Where does the IRS get this information?

One of the most important questions that are curious is how the IRS reaches the information about who, how much cryptocurrency is transacted or not… CoinTracker co-founder Chandan Lodha stated that most of the people who received the letter were trading on the Coinbase exchange.

Lawsuit for “obtaining illegal information” against IRS

In 2016, the institution sent a subpoena to Coinbase to send account information (transaction and amount held) of users transacting. A user named James Harper sued the IRS last month for unlawfully obtaining personal information and violating his constitutional rights.

“They went so far as to try to abolish anonymity”

Chandan Lodha also stated that the US government has sent a subpoena to exchanges abroad such as Bitstamp or analytics software companies such as Chainanalysis, Coinbase Analytics and Palantir, saying, “They went so far as to remove even the transactions of on-chain privacy coins from anonymity.”