Coyote Blog

In May of this year I got a form from the Arizona Department of
Revenue that said my company was now large enough to make estimated
sales tax pre-payments.  Some states do this when you are large enough
- they don’t like you holding their sales tax money a whole month until
the reporting deadline, they want their cash in hand.  Its a pain, so I
sighed, but we did it.  We prepaid estimated full-month June sales tax
in mid-June as required, rather than in mid-July when the payment would
normally be due.  Note that we still have to fill out all the sales tax
reports in July, so paperwork is doubled, not to mention the extra work
to reconcile between the estimate and actual results.

So this month, I was looking for the July pre-payment form.  I
figured the July pre-payment must be due soon, so I called the
Department of Revenue and asked where my form was.  They said there was
no form for July.  The pre-payment is only one time.  I said, "its only
for June?" and they said yes.  You can see the blank form online is hard-coded for June.

Then it dawned on me:  Arizona is on a June 30 fiscal year.  The
entire point of this exercise is to pull July revenues into June to
artificially inflate the prior fiscal year financials.  Wow – all those
pious government workers artificially manipulating results just like an
evil old corporation.  Because there is absolutely no other reason to
do this for just one month.  The time value of money gained is dwarfed
by the costs of changing your payment processing approach for just one
month, and is certainly dwarfed if you consider the extra taxpayer
effort required (which of course the government never does).

But it’s even worse!  Because, in effect, this only worked one time
– the first time.  The first time they did this, they helped the
fiscal year.  But now, pulling forward July this year just offsets
losing the July revenues from last year.  So politicians have saddled
us with a tax process that costs the government more money and the
taxpayer more time and has no benefit beyond generating a slightly more
positive press release about the budget for some politician several
years ago (whatever year this was first implemented).