What Is Intangible Tax?
Intangible taxes are taxes on items that cannot be physically touched or money that comes mostly from investments. States typically define intangible taxes and whether or not a person has to pay such a tax depends on the state he lives in. The Federal Government also places taxes on many of the same assets that states define as such, but the federal government considers the revenue received from such items as income taxes. Stocks, bonds, and the income a person receives from bank account are often defined as intangible assets.
Is There A Different Intangible Tax Rate?
The federal government considers income earned from bank accounts as income. Stocks and bonds may have to be declared on a person’s taxes as a capital gain. Because each state operates under different tax codes, it is impossible to go into great detail about how the rates for intangible taxes for each state. A reader may have noticed that intangible taxes often deal with investments and passive income streams. Not every person who receives a passive income stream needs to worry about different intangible tax rates. The most prominent example of this type of passive income are royalties earned by writers, musicians, and inventors.
Do I Need to Worry About Intangible Tax?
The federal government gives a person clear guidelines on when he has to file taxes on investments and bank account earnings. States often make the information available to tax payers. No form of government will prevent taxpayers from receiving information that could result in the government getting more money. This is especially true for state governments suffering from severe budget deficits. Only one or two states do not face some budget crisis at the present time, and the ones in better shape are about to face new budget crises.