FINAL IRS Regulations Issues On Inherited IRAs, RMDs, SECURE Act -- August 3, 2024

Locator: 48310TAXES_IRS.

Link to Forbe's here. Still confusing but this is the best I've found to date explaining the rules. These rules affect very, very few folks.

Taxes And Royalty Income -- North Dakota -- August 28, 2018

I was waiting to post this at a more appropriate time, but I don't want to forget to post this, so I'm doing it now.

A huge "thank you" to the reader who sent me this some months ago. Hopefully, I will remember to re-post this next year during tax season:

One thing that you may have mentioned and that does strike me is that oil companies are now collecting the ND state tax, deducting it from the royalty checks, and have been doing this for several  years. 

And this is at the highest possible marginal rate.  

This has to be a windfall for ND as many  people receive a substantial refund if they file, so those people that live out of state and don’t file are paying much more in taxes on their royalties  (in many cases) then they actually owe. 

Five years ago ND was collecting nothing from the non-residents not filing so one would think this would be a windfall – an overly high tax rate and the fact taxes are now actually being collected.

And The Problem Is? -- April 11, 2016

Updates

April 12, 2016: along with the article linked below, there was a link to United Van Lines 39th Annual Moves Survey. In addition to the story, there is a great interactive map. When you get there be sure to click on the "video" at the bottom of the map to see the change in moves since 1978, on an annual basis. I think the results for North Dakota will surprise you. [The little grey arrow to click on is at the far right; it bleeds into the sidebar at the right.]
 

Original Post

CNBC is reporting:

Can you move 1,200 miles just to lower your taxes? Well, David Tepper can, and it may save him hundreds of millions of dollars.

Tepper is the founder of hedge fund Appaloosa Management, and he’s worth more than $10 billion, according to Forbes. He ran his firm out of New Jersey for years, but recently moved the operation to Miami Beach. The top income tax rate in New Jersey is nearly 9%. In Florida, the top rate is 0. Tepper will save so much money that New Jersey finance officials worry that the tax revenue lost to his move could blow a hole in the state budget.

Connecticut lost a couple of billionaires as well—businessmen Thomas Peterffy and C. Dean Metropoulos, who also decamped for Florida recently. Their departure lowered Connecticut’s billionaire count from 15 to 13.

The Nutmeg State is also losing longtime corporate citizen General Electric to Boston, a move GE made after Connecticut passed big tax hikes. Florida Gov. Rick Scott even invited Yale University to ditch New Haven and relocate to the Sunshine State, to avoid a new tax some Connecticut lawmakers wanted to impose on the school’s endowment. That bill failed to pass, and Yale says it is staying put (for now).

And the problem is?

The bigger story is that it appears the writer of this story, Robert Frank -- no doubt a business writer -- after all, he titles his column "Inside Wealth" -- seems to have just discovered that a) some states do not have income taxes; and, b) some folks like to take advantage of that.

When I read that only "wealthy" folks can take advantage of that, I cry "foul." There are no restrictions or laws that preclude anyone from moving to a state that has no income tax. Or one can move to a state where income taxes are lower. To the best of my knowledge, one can find work in almost any state if one tries hard enough. At least that's the story line from various state governments and the federal government and Reuters and Bloomberg every week when the jobs data comes out.

Google "unemployment Texas" and note that the unemployment rate in Texas approaches 4% -- full employment -- and that there are many, many stories on the number of jobs being added each month. Florida, at 5.6%, is almost as good. In both states, the unemployment rate has been dropping like a Boeing 747 with all engines shut off.

So, we had Robert Frank to our list of nominees for the 2016 Geico Rock Award.

And, I guess to be fair, we have to add Rick Newman, also, who reported the same story, almost word-for-word. As usual, the comments are more entertaining than the article.

Tuesday, April 21, 2015 -- Ducks

Active rigs:

	4/21/2015	04/21/2014	04/21/2013	04/21/2012	04/21/2011
Active Rigs	93	184	185	210	176

RBN Energy: getting Permian crude to the coast.

The flood of domestic light shale crude showing up at the Texas Gulf Coast by pipeline in the past two years is not best matched to most refineries in the region that are configured to run heavier crude. But flows across the Gulf Coast to refineries in the Mississippi Delta more suited to process light crude are constrained by a lack of pipeline capacity between Texas and Louisiana. New domestic shale crude has been delivered to eastern Gulf Coast terminals such as St. James by rail but narrowing coastal differentials to inland prices have reduced the CBR advantage. Today we detail how new pipeline projects promise to increase the flow of crude from Texas to the Eastern Gulf.

Last week we described the strong market share of takeaway capacity out of the Permian held by Plains All American (PAA) that is in the process of bringing the Cactus pipeline online linking Permian and Eagle Ford infrastructure (see When Are You Going to Come Down). Earlier this year PAA completed the Sunrise pipeline that facilitates 250 Mb/d of crude flows from Midland, TX to Colorado City, origin of the PAA/Magellan BridgeTex pipeline that now delivers up to 300 Mb/d of Permian crude to Magellan’s East Houston terminal (see Good Day Sunrise). Takeaway capacity out of the Permian has increased in line with growing production – especially in the Midland and Delaware basins as we described in our Come Gather ‘Round Pipelines series last year. Originally Permian crude flowed mainly to the Midwest Cushing, OK trading hub – delivery point for the CME NYMEX West Texas Intermediate (WTI) futures contract.

A surplus of supplies at Cushing led to infrastructure development to deliver Permian crude to the Texas Gulf Coast in the past two years – first from an extension to the Sunoco Logistics (part of Energy Transfer Partners) West Texas Gulf pipeline delivering to Houston and Nederland, TX in 2013 and then from the Magellan Longhorn reversal that now delivers up to 275 Mb/d Permian crude to Houston – joined by the Sunoco Permian Express I (150 Mb/d to Nederland) and then BridgeTex in 2015. A further 200 Mb/d will flow on the Permian Express II out of Colorado City by the end of summer 2015.

Reuters at Rigzone: No Need to Fear US Crude Supply Deluge.

Conventional wisdom holds that come June a pending $5.3 billion tax break in the No. 2 U.S. oil producing state, combined with a modest uptick in oil prices, will unleash a tsunami of new shale crude supply so big that prices may slump again.

Just one problem with that scenario: oil producers say this is not going to happen. The fear of a worsening supply glut, a recurring theme of many industry research reports and conferences over the past two months, is based on a view that U.S. shale producers have built up a heavy backlog of drilled but uncompleted wells (DUCs) that can be turned on quickly.

The assumption is that oil firms will finish work on those wells, known as "ducks" in the industry jargon, once oil prices recover further and North Dakota activates its tax relief in response to a long market slump.

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You Ate Them All?

Quick Look At WTI -- April 15, 2015

Cushing, Oklahoma, WTI spot price FOB, dollars per barrel (beware: the link may take a long time to load; watch the spinning wheel or the sand glass):

I do not know the "number" the NDIC has posted. In an earlier post, I thought February was the first month to begin the five-month "window." But the table above suggests January was the first month. If so, we are in the fourth of five months. So, we'll see.

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Iowans And Hillary

Delilah, Tom Jones

Insurers Are Baffled About Low Number Of ObamaCare Enrollments; Mainstream Media Worries About Early Flu Season

Updates

January 12, 2014: the numbers are low, but what is worse is the fact that the demographics are wrong -- too many old, high risk folks signing up for ObamaCare; not enough young folks enrolling. Predictable. Reuters is reporting:

Now that more than 2 million people have signed up for private insurance plans created by President Barack Obama's healthcare law, a crucial next check-up for the new marketplace will be to see how old customers are.

Early data from a handful of state exchanges shows the administration needs more young adults to sign up in the next three months to help offset costs from older enrollees and prevent insurers from raising their rates.

Critics of Obama's Affordable Care Act say the market won't attract enough young people to keep it financially viable, putting more pressure on government funds to compensate for any insurer losses.

Data from seven states and the District of Columbia, which are running their own marketplaces, show that of more than 200,000 enrollees, nearly 22 percent are 18 to 34 years old, according to a Reuters analysis.

The administration had hoped that over 38 percent, or 2.7 million, of all enrollees in 2014 would be 18 to 35 years old, based on a Congressional Budget Office estimate that 7 million people would sign up by the end of March.

Again, this is not a problem. The insurers are protected by the law: a bailout is guaranteed. The insurers will simply become "pass-through" entities for ObamaCare. The folks who crafted this bill were no dummies, and with a president who was given a free pass on every executive decision modifying the law, things are working out just fine for ObamaCare.

 

Original Post

The Dickinson Press is reporting: yup, insurers are baffled about the low number of enrollees. Let's count the ways:

• the websites didn't work
• the federal website was taken off-line for the first three weeks
• the ObamaCare website has more security risks than the Target breach
• original website required private data submission before viewing plans
• majority of folks who thought they would qualify, do not qualify (income is required)
• the most affordable plans had a $12,000 annual deductible

But the big reason North Dakota folks did not enroll: with the Bakken boom, everyone in North Dakota is a millionaire (some billionaires) and do not qualify for subsidies, so why sign up?

Just joking. The big reason folks did not enroll: sticker shock.

The insurers are not concerned: the law provides for a bailout if the insurers lose money on this scheme.

In the end, the insurers will simply be "pass-through" entities for national health care.

In case the above link is broken:

The Sanford Health Plan enrolled 92 in North Dakota through the new marketplace exchange.

By the way, Sanford Health has the monopoly in North Dakota for Medicaid; Blue Cross Blue Shield pulled out of Medicaid coverage in North Dakota.

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Mainstream media seems to be reporting that the flu season might be earlier and worst than previous seasons. See for yourself at Google flu trends, probably a better source than the government's own statistics. Right now, the flu season this year is much, much less severe than what it was this time last year.

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One would think that with the highest corporate tax rate in the world, the US would have no trouble paying universal health care, or at least subsidizing it. 

The U.S. has the highest corporate tax rate in the developed world. After Japan lowered its tax rate last year, the combined federal and average state tax rate of 39.2% in the U.S. was the highest of any nation in the Organization for Economic Co-operation and Development.

Some mega-corporations pay billions of dollars every year in federal and state taxes. In its most recent fiscal year, Exxon Mobil reported $31 billion in corporate income tax expenses.

Some large corporations, on the other hand, paid no taxes at all and even received tax benefits.

General Motors, which had annual revenue of more than $150 billion, received a tax benefit of $28.6 billion. 24/7 Wall St. examined the 10 U.S.-based, publicly traded companies with tax expenses of more than $5 billion in their most recently reported fiscal year, and the 10 companies that received a benefit of at least $5 million.

The ten (10) companies paying the most income tax, from least to most: Microsoft, IBM, Berkshire Hathaway, JPMorgan, ConocoPhillips, Wal-Mart, Wells Fargo, Apple, Chevron, Exxon Mobil. I doubt we will ever see a wind energy or solar energy corporation make the top 10 list.

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Speaking of corporate taxes, these corporations are also well known for philanthropy. As just one minor example, The Bismarck Tribune is reporting:

State leaders recognized an energy company Wednesday for its $1 million contribution to the Housing Incentive Fund which fills out the portion of the fund to be capitalized through tax credits.

Members of the North Dakota Industrial Commission recognized Denver-based QEP Resources for its contribution.

Earlier this week it was announced that the $20 million in state tax credits authorized by the Legislature through taxpayer contributions had been reached. These HIF dollars are in addition to a $15.4 million direct appropriation made to the fund for this biennium.
Gov. Jack Dalrympe said the $1 million from QEP Resources put the fund over the threshold.

I've been remiss in not reporting corporate philanthropy since the boom began -- mostly because it was hardly news -- there were so many companies donating at so many levels. But a reader pointed out that we haven't seen any donations from renewable energy companies in North Dakota. I'll watch for them. North Dakota is one of the leading wind energy states in the US.
 

Severance Taxes: Comparing The States; Stripper Well Taxes and The Loophole

Updates

April 3, 2013: ND legislature looking at stripper well loophole:

To encourage investment in oil development, the Legislature many years ago exempted stripper wells — those producing less than 30 barrels of oil a day — from the state extraction tax.

However, the exemption applies to an entire production spacing unit, and since the boom, some high-producing Bakken wells in the same unit that has a stripper well have escaped the extraction tax.

For at least two sessions, legislators have talked about closing the loophole, and this year Cook included stripper well changes as part of a comprehensive oil tax reform bill. It was killed in the House, largely due to a controversial plan to lower the oil extraction tax.

By combining the stripper well changes with oil tax changes, he was able to make the bill “revenue neutral.” 

Original Post

Very, very good article; a must read.