July 1, 2025 • 20 mins
Episode 142: Hidden Taxes Exposed - The Taxes You Don't See Coming
Join hosts Chris Picciurro, CPA and John Tripolsky as they shine a light on the "cockroach taxes" that hide in the dark - those sneaky hidden taxes that have nothing to do with your income level but can significantly impact your wallet.
What You'll Learn:
• The #1 hidden tax affecting everyone: Sales tax (45 states + DC)
• How travel industry taxes can add 40% to your booking costs
• Franchise and excise taxes for business owners
• Real estate transfer taxes that hit even loss transactions
• "Sin taxes" on alcohol and cigarettes with shocking state variations
• Hotel occupancy and rental car taxes that inflate travel costs
Key Takeaways:
Hidden taxes are non-income based taxes you pay without filing returns. From California's $800 LLC fee to New York's $4.35 per pack cigarette tax, these taxes can add thousands to your annual expenses. Learn which states have the highest burdens and how to plan around them.
Eye-Opening Examples:
• Florida's 0.7% real estate transfer tax on ALL property sales
• New York cigarette taxes costing smokers $1,500+ annually
• Hotel taxes adding 15% to your lodging costs
• Ticketmaster-style "convenience fees" of 25-35%
Resources:
Find a tax professional at www.2025.tax
Episode Sponsor:
Strategic Associates, LLC
Roger Roundy
www.linkedin.com/in/roger-roundy-86887b23
- (00:00) - Uncovering Hidden Taxes and Their Impact on Your Wallet
- (03:31) - Hidden Taxes: Sales, Travel, and Franchise Fees Explored
- (07:37) - Californians Moving and Making Friends in Franklin Tennessee
- (08:05) - Understanding Real Estate Transfer Taxes and Their Implications
- (12:31) - Exploring Sin Taxes and Their Impact on Consumption
- (19:05) - Exploring Local Tax Initiatives and Community Engagement
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
John Tripolsky (00:04):
Welcome back to the podcast, everybody, here
from the teaching tax flow team.So we are gonna get into today,
we're gonna uncover those hiddentaxes. That's right. We're
uncovering hidden taxes just foryou, the listener of this show.
But before we get into it, let'stake a brief moment and thank
our episode sponsor.
Ad Read (00:25):
This podcast is brought to you by Strategic Associates.
Are you a high income earner,real estate investor, or
successful entrepreneur who isfrustrated by having to pay
$75,000 or more of annual taxliability? If so, Strategic
Associates can help. Your firststep to saving thousands, if not
hundreds of thousands, is tocontact Roger Roundy at
(00:46):
roger@strategicag.net or bycalling (801) 641-2956, and be
sure to tell them TTF sent you.
John Tripolsky (01:14):
Hey, everybody, and welcome back to the teaching
tax flow podcast. One thing thatyou probably don't hear on this
show, especially at thebeginning is you might not even
know who I am. So my name isokay. I like the I like the
pause.
You don't need to know who I am.Who gives a crap? We're here.
Chris Picciurro Welcome back,sir.
How
Chris Picciurro, CPA (01:33):
are Watch us trick. What am I? I'm hidden.
We're talking about hidden taxestoday. And if you're not
watching the YouTube channel,you should be.
If you're listening to this,thank you. Thanks for hitting us
on Spotify, Apple, iTunes. Giveus a great five star review, but
we're talking about hidden taxestoday. We're gonna jump right
(01:54):
into it because when we talkabout legally and ethically
reducing tax you're paying yourlifetime, most people think
about income tax. Some peoplethink about a state tax.
We've had a lot of great contenton that. But, man, there are a
lot of what I call hidden taxesout there. If you recently went
to a restaurant or looked atyour bill on anything, you will
(02:15):
see, dang. You know, I'm notseeing that. So a lot of times,
hidden tax is something that youdon't file a tax return for.
So it's something you're justpaying as you go along. We know
the tax agencies are involuntarybusiness partner, and we wanted
to take those little cockroachcockroach taxes that usually
(02:35):
hide in the dark and shine alittle light on them today.
John Tripolsky (02:38):
Let's do it. And if you're not watching this and
you're only listening to it,you're missing out on Chris'
little, magic tricks here. He'san illusionist now. He's getting
ready for taxposia here thatwe're going to in Vegas here,
pretty soon. So he's he'spracticing for his, you know,
moment to shine or
Chris Picciurro, CPA (02:55):
Yes. Or hop again. See, you know, I like
I like to jump in and jump out.
John Tripolsky (02:58):
So Tax happens.
Chris Picciurro, CPA (03:00):
Probably yeah. Exactly. Probably the
number one hidden tax that wesee. So remember, defining what
is a hidden tax? A non incomebased tax has nothing to do if
you make $20,000,000 a year orno million dollars a year,
you're still paying these taxes.
They have nothing to do withyour income. The largest hidden
tax is absolutely sales tax. Andhere, many of the states that
(03:24):
have higher sales tax had nointerestingly, no state income
tax are the states that aregrowing and thriving. But a
sales tax is quite simply a saletax imposed on the retail sales
of tangible personal property orcertain services depending on
what state you're in. So inwhich we go and buy something,
like television, a whatever, alot of times you're going to see
(03:48):
a sales tax.
And 45 states plus DC impose aimpose a sales tax according to
our friends over at the TaxFoundation. Now some things are
exempt from it. It's a state bystate basis, sometimes food,
digital goods, medicineservices. But ultimately, sales
(04:09):
taxes are number one hidden tax.And, I mean, yeah, we see it.
Yo. Kinda like John, and thenwe're gonna talk about this in a
a bit a couple more men in acouple minutes. Travel has
probably the industry with thebiggest hidden tax. You ever
book something on either Airbnb,VRBO? You book your room, and
(04:32):
you see literally 40% additionalin taxes and fees.
John Tripolsky (04:36):
That's gotta be like a marketer's dream. Right?
It's like, you have this client.You're like, hey. We can totally
put out there that it's $99 anight.
Like, that's you know, it givesyou context to market off of.
But then, yeah, you're right.You go you go to check out, and
you're like, what in the world?You're like, your your head is
already calculated. It'salright.
Well, I got this. It's 99 anight. I'm sitting there for
three nights. It's probably$3.03 54. You get there, you're
(04:58):
like, now how in the heck is it$685?
Chris Picciurro, CPA (05:01):
I mean, those think about, like,
Ticketmaster, StubHub, SeatGeek.Those guys snake those are guys
that are weasels sometimes.They're weasels, and they sneak
in a 25 to 35% convenience fee.Convenience fee means a hidden
tax. So sales tax and commonlyyou commonly pay that on a lot
(05:24):
of different things.
And sometimes it affects traveland entertainment and that sort
of stuff. So next one'ssomething called franchise and
excise tax. Not every stateassesses a franchise and excise
tax. The state of Tennessee isnotorious for for slapping that
on businesses because we don'thave an individual personal tax
(05:45):
return. But a franchise andexcise tax could could play a
role if you and this is gonnaplay a role if you have a
business.
You know, if you form an LLC,you're a corporation, you're
typically going to pay afranchise and excise tax. It
doesn't matter many times, oryou're gonna have to pay the
(06:05):
secretary of state an annualfee. Doesn't it's not always
based on your income. Sometimesit's based on the assets that
you have, and and it's kind of asneaky hidden tax. So that's our
franchise.
Now I did say, a hidden tax is atax you pay when you don't file
a tax return. That one's kind ofa hybrid. But but if you you
know, some states, if you justsimply I know in cal our friends
(06:27):
in California, we haven't thrownthem under the bus in a while.
They they spank you with an $800per entity tax. If your LLC made
a dime or a million dimes, it'san $800 annual fee just to have
the privilege of being an LLC ora corporation in that beautiful
state of California.
John Tripolsky (06:46):
And, Chris, this is for, you know, some of the
people that have listened to usnow for a 140 plus episodes and
watched us now for 40 plus ofthose. You know, it's you're
right. I feel like we haven'trazzed on on our friends out
west in a long time there.Ironically enough, we have met a
handful of people in person whoare from California that have
listened, and they actually likewhen we get them shit. So I'll
(07:07):
beat that one out, but it iswhat it is.
And it kinda makes it funbecause, I mean, I know people
that have moved from Californiathat are self employed. One of
our neighbors behind us, at ourhouse has. And he he's like,
man, this is like winning thelottery on a small level just
leaving the state for as much asthey get taxed on stuff. So, you
(07:28):
know, there we go. There's ourthere's our dig at at the state
here for a while.
We'll leave you aloneCalifornians for a little bit.
Not too long.
Chris Picciurro, CPA (07:36):
But Well, hey. You know what? I have made
friends with. I can't I'mserious. Very close friends with
tons of Californians that havemoved here too.
As you know, I like to say, andyou guys you and our buddy Jim
Ingersoll like to like to liketo razz me a little when I when
I was kicked off that podcast,beautiful and historic Franklin,
(07:58):
Tennessee. It was
John Tripolsky (08:01):
a good episode. If anybody missed that one, go
back and listen to it. We giveChris a hard time.
Chris Picciurro, CPA (08:05):
Another big one, real estate transfer
tax. So if you transfer propertyfrom one party to another
property, a lot of times,there's a transfer tax. I've
been subject to it withproperties in Florida. Some
states, it's very small. Somestates, it's large.
In New York state, it's likepoint 4% of transfers over a
half a million dollars, which isand New York City has an
(08:28):
additional tax, which is mostproperties in New York state,
really. In Florida, it's 70¢ per$100 of consideration. That's
significant. That's point 7%. Soeven if you sell a property at a
loss, John, and pay no incometax on that, you are paying a
state transfer tax.
John Tripolsky (08:46):
I didn't know that. Yes. Wow. Talk about it.
That's a bite, man.
Chris Picciurro, CPA (08:52):
That's a betta that's a that's more than
a nibble. That's a bite.
John Tripolsky (08:55):
Wow. I I had no idea.
Chris Picciurro, CPA (08:57):
Some states actually charge a
transfer tax if you transferproperty from your your name
into an LLC. So you've gottareally be careful about that.
John Tripolsky (09:11):
And with the transfer tax there, I'm I mean,
I won't dig into too much, butI'm I'm sure a lot of people
don't know either. So that'svery similar. I mean, I think of
just off the top of my head is,you know, you go to sell a car
or buy a car even if you don'tpay anything for it, you're
still paying that. Like, our so,I forget what it is here.
Chris Picciurro, CPA (09:27):
Michigan. Yeah. It's like the
John Tripolsky (09:28):
same thing. Right? Right. Oh, that's an
operating tax.
Chris Picciurro, CPA (09:32):
You actually had a good comment.
Congratulations. We're proud ofyou. No. No.
That's a great point. Thatvehicle tab. Sometimes you gotta
pay transfer tax on vehicles.Sometime some states like,
Michigan actually has a prettymodest it's called the ad
valorem or or tax on yourvehicle tabs because in theory,
(09:52):
it that that tax is based on thevalue of the vehicle, and it
goes down over time. Where somestates, it's very expensive to
own a vehicle.
John Tripolsky (09:59):
Like, I remember in South Carolina I'm gonna get
it wrong to the point somebodyagain, please correct me if I
am. When I lived in CharlestonCounty in South Carolina, bought
a new vehicle. I think thevehicle was, like, 41,000 or
something out the door a whileago. The sales tax was capped at
500.
Chris Picciurro, CPA (10:17):
Mhmm.
John Tripolsky (10:18):
But the registration fee was, like, 8 or
$900 or something a year, andthen it was bay it went down by
the mileage, which I looked atit like, what in the world?
Like, way way to complicate asystem, but you know? And then
he had people out there gettingfake oil change saying their
brand new car is 65,000 miles onit because there's a high
(10:38):
mileage vehicle tax deduction orsomething out there. But it's an
interesting spec.
Chris Picciurro, CPA (10:43):
Yeah. There's always there's always
something going on. So so, yeah,so a lot of times, transferring
that real estate, it's itsometimes sometimes it's called
a tax stamp or something. It itcan be expensive, and you gotta
look at first, say, butFlorida's a doozy, man. In some
states exempt, like, transfersfrom you to an LLC that you own,
(11:07):
but, you know Right.
Like, flow again, Florida's aFlorida's a tricky one, and we
have a lot of growth down there.
John Tripolsky (11:14):
And that's a good thing too, Chris. I mean,
you you know, we talk about taxplanning. I mean, that's
something that I unless youreally know somebody that knows
that market very well. Right? Imean, might not even think to
think of that.
Right? Because you might go in,you're like, hey. You know, my
margins are kinda short. Sayit's a fix and flip or something
along those lines, and you don'tknow that's there. I mean,
(11:37):
that's up.
Chris Picciurro, CPA (11:38):
I mean, I yeah. And that's why you wanna
work with, you know,professionals. I mean, we've had
Park Barofsky of MovementMortgage is a great resource
when it comes to mortgages, andwe've had Crystal Ball on from
Panama City Beach, a phenomenalrealtor. So but my point is is
when you're buying that thatthat property, if down the road,
(12:00):
you think you're either gonnatransfer it in and out of an LLC
due to financing or variousthings, you've gotta think about
that, especially in Florida inthat short term rental market.
So it's a team approach.
Of just be, you know, just beaware of those transfer taxes on
real estate in thejurisdictions.
John Tripolsky (12:15):
Makes sense. And I know the next one we're gonna
talk about. I won't say what itis. I'll let you do that. But
you would definitely pay thistax extremely high because you
would be getting a lot of thisif you didn't know about that
that, that tax that we justspoke about in real estate
drowning your service.
Chris Picciurro, CPA (12:31):
So the next tax is called a, quote,
unquote, sin tax. And, you know,that's not my term for it. But a
sin tax is an is an additionaltax beyond your normal sales tax
on certain items that thegovernment calls a quote unquote
(12:54):
sin to consume. Again, we're notwe're not the church. We're not
the state.
But in general, like alcohol andcigarettes are the largest types
of product that are subject toboth federal and state, quote
unquote, syntax. So it's justit's it's basically the they're
discouraging consumption, sothey wanna raise revenue to fund
public health by hitting peoplewith with a large tax. And and,
(13:19):
actually, not you know, somesome states have quite a bit of
sales tax on gas purchasing tooif they really are trying to be
green.
John Tripolsky (13:28):
Yeah. And there Chris, I mean, there's we could
take this and expand out it, youknow, very far. You know, a lot
of states I mean, I'm not gonnasay what side of the fence I am
on with that specifically. But,you know, Michigan has a lot of
consumable products now than alot of other states do not, and
they text the crap out of them.And I believe that there has
(13:50):
been some studies done that veryminimal people will stop
purchasing it even if the taxeswent up on it.
So maybe that's why they were Ijust think of, like, the Syntax
name. Right? Like, maybe that'sjust kinda where it came from
is, you know, they could tax thecrap out of it, you know, as
high as they want to, really, ina sense, and people still
(14:11):
consume it. Right? So who knows?
Chris Picciurro, CPA (14:13):
I mean, think about we I know we we work
in our in in the defeating taxesprivate Facebook group. We we do
a lot of education, and a lot ofthat comes from the tax
foundation, and they break downall types of different taxes.
And they did a big article oncigarette tax. So the federal
(14:35):
cigarette tax is about a dollara pack, but states vary. New
York, it's like $40 and $4.35per pack.
California is a little under $3per pack. That's a significant
tax if you're if you let's let'ssay you smoke a pack of
cigarettes a day. That's 5 NewYork, that's $5 a day times 365
(15:00):
days. That's a couple thousanddollars just in the tax, not
even the cigarettes.
John Tripolsky (15:03):
Well, there's people there. Right? I mean,
there's it's a legit problemfrom what I understand. People
like smuggling in cigarettesfrom New Jersey or somewhere
into New York and making abusiness out of it. I mean, it's
a legitimate business, but youknow?
Chris Picciurro, CPA (15:16):
Yeah. No. I mean, that that's Wild. That's
that's happening. Can you
John Tripolsky (15:21):
imagine that joining, like, NYPD and be like,
you know what? You're on theanti smuggling tobacco whatever
test for us.
Chris Picciurro, CPA (15:29):
I mean, it's legit. I mean, it's it's
definitely something that that'sout there.
John Tripolsky (15:35):
Sure.
Chris Picciurro, CPA (15:35):
So speaking of so we'll move away
from cigarettes, and let's talkabout alcohol tax. You know,
sometimes they go hand in hand.No pun intended. I actually pun
intended. Right?
You could have one in one hand,one in the other.
John Tripolsky (15:46):
That's very true.
Chris Picciurro, CPA (15:47):
But there's a federal excise tax per
gallon of alcohol, about $13.50for for spirits. Wines, about
buck to $3 a gallon. So that butthat'll last you till noon,
John, the way you operate. See,that's I I'm an alcoholic. We we
know you're not a wine drinker,John.
(16:07):
You're much more sophisticatedthan that.
John Tripolsky (16:09):
I tried it, and I think I embarrassed you, your
wife, and mine at a wine bar. So
Chris Picciurro, CPA (16:14):
I would know. I'm never embarrassed,
John. I was encouraging you. Iwas proud of you. You're right.
And then beers, you know,between $3 and $18 a barrel on
the federal side of things ontop of state potential potential
taxes on those. So, again, a lotof times, you know, you're
paying more for these productsbecause of the, quote, unquote,
(16:35):
sin taxes or hidden taxes. Youcan't I can't tax plan around
the cigarette tax. I get taxplanning around a lot a lot of
other things, but there's noother than telling you not to
smoke as much and and and not toremember, we do legally and
ethically reduce the tax you payin your lifetime, so smuggling
cigarettes across borders is isnot a legal or an ethical
practice.
John Tripolsky (16:56):
Ironically enough, here we are talking
about alcohol and cigarette tax.It mean you both grew up very
close to the Canadian Americanborder where bootlegger was,
like, the fame during theprohibition. Right? So maybe we
should do a bootlegging and taxepisode. That'd be good.
Chris Picciurro, CPA (17:13):
We could dig out. We could I
John Tripolsky (17:15):
don't know who would get on and talk about it,
but
Chris Picciurro, CPA (17:17):
I'm sure. Well, my grandfather told me
some interesting stories aboutpeople coming out through
swimming across the DetroitRiver and and all these other
cool things. But, anyway, let'swrap it up by a couple other
hidden taxes. I touched on thema little bit, but let's put some
numbers to it. Hospitality andlodging.
So hotel occupancy tax. Now,John, fortunately for you, when
(17:38):
you come to the beautiful andhistoric Franklin, you get you
have your own suite here at theat our household. But if you
didn't, you'd be slapped with a19 to 15% state and local
hospitality and lodging tax. Sothat's you know? So a lot of
times when you go on to acertain hotel, you know, a a big
(17:59):
hotel brand's booking site, youmight say, hey, you know, $150 a
night.
That's pretty good and then itends up being like 180 a night.
Right? That's why where thatfree breakfast comes in and
maybe free parking,
John Tripolsky (18:11):
you feel a little better.
Chris Picciurro, CPA (18:13):
Anyway, or rental vehicles and stuff. So
hospitality and lodging taxes.In in expanding on that, you
know, travel related taxes.Rental car taxes. John, another
attack tolls.
Another hidden tax.
John Tripolsky (18:28):
I didn't think of that one at all. You are
right.
Chris Picciurro, CPA (18:32):
Are right. We talked about gasoline taxes.
So a bunch of, you know, thesetype of consumption taxes that,
every, you that that can eataway at things. So those are
just those are probably the mostpopular hidden taxes. And I
would say if you're listening tothis, if you if there's a hidden
(18:53):
tax that we didn't mention, putit in the comments.
Put it in the comments of thisYouTube video or in the
defeating taxes Facebook group.I would love to know about it.
Maybe we'll actually create somecontent. So we're challenging
the listeners and the watcherson this episode.
John Tripolsky (19:10):
That'd be awesome. And and, Chris, that's
a great place to wrap this oneup. Right? And, yep, to to echo
what Chris said there, let'sfind out what you guys excuse
me, in your areas because somemunicipalities even have them
that, you know, they're not aslow or I was just gonna say
they're not more, geographicallywidespread. Right?
Like, I can think of some herein in our little town outside of
(19:32):
Ann Arbor, and it's not theUniversity of Michigan fan base
tax. And that's extremely highbecause they're such a good
team. We know how that goes.That's how we get Chris all
fired up. He might be able to,make his video disappear, but I
can mute him if he says anythingabout U of M.
So we're we're all good here.We're even. But, yes, let's do
(19:52):
that. Everybody post some stuff.Share it with us.
Share us the community. Let'sget it out there. Let's figure
out what's there. Now this isnot a, you know, bash your local
city on specific stuffconversation, but put them in.
Let's see what's there.
Let's have a discussion aroundit. And who knows? Might be
helping out your neighbor thatdoesn't know anything's there.
So as always, I am not gonna letChris say anything now because
(20:12):
he's gonna say something about Uof M. We'll leave him on the
side right in the pine, but wewill see everybody back here
again next week.
Completely different topic. Sameday of the week. A little bit of
a change in the timepotentially. Just like I like to
change the outro every show. Sosee everybody later.
Have a great week. Remember, taxplanning is your friend. See you
soon.
Disclaimer (20:37):
The content provided is for educational purposes
only. We encourage you to seekpersonalized investment advice
from your professional. For alltax and legal advice, please
consult your CPA or attorney.Investment advisory services are
offered through Cabin Advisors,a registered investment advisor.
Securities are offered throughCabin Securities, a registered
broker dealer.
The content of this podcast doesnot constitute an offer of
(20:58):
securities. Offerings can onlybe made through an offering
memorandum, and you shouldcarefully examine the risk
factors and other informationcontained in the memorandum.
Welcome back to the podcast, everybody, here
from the teaching tax flow team.So we are gonna get into today,
we're gonna uncover those hiddentaxes. That's right. We're
uncovering hidden taxes just foryou, the listener of this show.
But before we get into it, let'stake a brief moment and thank
our episode sponsor.
Ad Read (00:25):
This podcast is brought to you by Strategic Associates.
Are you a high income earner,real estate investor, or
successful entrepreneur who isfrustrated by having to pay
$75,000 or more of annual taxliability? If so, Strategic
Associates can help. Your firststep to saving thousands, if not
hundreds of thousands, is tocontact Roger Roundy at
(00:46):
roger@strategicag.net or bycalling (801) 641-2956, and be
sure to tell them TTF sent you.
John Tripolsky (01:14):
Hey, everybody, and welcome back to the teaching
tax flow podcast. One thing thatyou probably don't hear on this
show, especially at thebeginning is you might not even
know who I am. So my name isokay. I like the I like the
pause.
You don't need to know who I am.Who gives a crap? We're here.
Chris Picciurro Welcome back,sir.
How
Chris Picciurro, CPA (01:33):
are Watch us trick. What am I? I'm hidden.
We're talking about hidden taxestoday. And if you're not
watching the YouTube channel,you should be.
If you're listening to this,thank you. Thanks for hitting us
on Spotify, Apple, iTunes. Giveus a great five star review, but
we're talking about hidden taxestoday. We're gonna jump right
(01:54):
into it because when we talkabout legally and ethically
reducing tax you're paying yourlifetime, most people think
about income tax. Some peoplethink about a state tax.
We've had a lot of great contenton that. But, man, there are a
lot of what I call hidden taxesout there. If you recently went
to a restaurant or looked atyour bill on anything, you will
(02:15):
see, dang. You know, I'm notseeing that. So a lot of times,
hidden tax is something that youdon't file a tax return for.
So it's something you're justpaying as you go along. We know
the tax agencies are involuntarybusiness partner, and we wanted
to take those little cockroachcockroach taxes that usually
(02:35):
hide in the dark and shine alittle light on them today.
John Tripolsky (02:38):
Let's do it. And if you're not watching this and
you're only listening to it,you're missing out on Chris'
little, magic tricks here. He'san illusionist now. He's getting
ready for taxposia here thatwe're going to in Vegas here,
pretty soon. So he's he'spracticing for his, you know,
moment to shine or
Chris Picciurro, CPA (02:55):
Yes. Or hop again. See, you know, I like
I like to jump in and jump out.
John Tripolsky (02:58):
So Tax happens.
Chris Picciurro, CPA (03:00):
Probably yeah. Exactly. Probably the
number one hidden tax that wesee. So remember, defining what
is a hidden tax? A non incomebased tax has nothing to do if
you make $20,000,000 a year orno million dollars a year,
you're still paying these taxes.
They have nothing to do withyour income. The largest hidden
tax is absolutely sales tax. Andhere, many of the states that
(03:24):
have higher sales tax had nointerestingly, no state income
tax are the states that aregrowing and thriving. But a
sales tax is quite simply a saletax imposed on the retail sales
of tangible personal property orcertain services depending on
what state you're in. So inwhich we go and buy something,
like television, a whatever, alot of times you're going to see
(03:48):
a sales tax.
And 45 states plus DC impose aimpose a sales tax according to
our friends over at the TaxFoundation. Now some things are
exempt from it. It's a state bystate basis, sometimes food,
digital goods, medicineservices. But ultimately, sales
(04:09):
taxes are number one hidden tax.And, I mean, yeah, we see it.
Yo. Kinda like John, and thenwe're gonna talk about this in a
a bit a couple more men in acouple minutes. Travel has
probably the industry with thebiggest hidden tax. You ever
book something on either Airbnb,VRBO? You book your room, and
(04:32):
you see literally 40% additionalin taxes and fees.
John Tripolsky (04:36):
That's gotta be like a marketer's dream. Right?
It's like, you have this client.You're like, hey. We can totally
put out there that it's $99 anight.
Like, that's you know, it givesyou context to market off of.
But then, yeah, you're right.You go you go to check out, and
you're like, what in the world?You're like, your your head is
already calculated. It'salright.
Well, I got this. It's 99 anight. I'm sitting there for
three nights. It's probably$3.03 54. You get there, you're
(04:58):
like, now how in the heck is it$685?
Chris Picciurro, CPA (05:01):
I mean, those think about, like,
Ticketmaster, StubHub, SeatGeek.Those guys snake those are guys
that are weasels sometimes.They're weasels, and they sneak
in a 25 to 35% convenience fee.Convenience fee means a hidden
tax. So sales tax and commonlyyou commonly pay that on a lot
(05:24):
of different things.
And sometimes it affects traveland entertainment and that sort
of stuff. So next one'ssomething called franchise and
excise tax. Not every stateassesses a franchise and excise
tax. The state of Tennessee isnotorious for for slapping that
on businesses because we don'thave an individual personal tax
(05:45):
return. But a franchise andexcise tax could could play a
role if you and this is gonnaplay a role if you have a
business.
You know, if you form an LLC,you're a corporation, you're
typically going to pay afranchise and excise tax. It
doesn't matter many times, oryou're gonna have to pay the
(06:05):
secretary of state an annualfee. Doesn't it's not always
based on your income. Sometimesit's based on the assets that
you have, and and it's kind of asneaky hidden tax. So that's our
franchise.
Now I did say, a hidden tax is atax you pay when you don't file
a tax return. That one's kind ofa hybrid. But but if you you
know, some states, if you justsimply I know in cal our friends
(06:27):
in California, we haven't thrownthem under the bus in a while.
They they spank you with an $800per entity tax. If your LLC made
a dime or a million dimes, it'san $800 annual fee just to have
the privilege of being an LLC ora corporation in that beautiful
state of California.
John Tripolsky (06:46):
And, Chris, this is for, you know, some of the
people that have listened to usnow for a 140 plus episodes and
watched us now for 40 plus ofthose. You know, it's you're
right. I feel like we haven'trazzed on on our friends out
west in a long time there.Ironically enough, we have met a
handful of people in person whoare from California that have
listened, and they actually likewhen we get them shit. So I'll
(07:07):
beat that one out, but it iswhat it is.
And it kinda makes it funbecause, I mean, I know people
that have moved from Californiathat are self employed. One of
our neighbors behind us, at ourhouse has. And he he's like,
man, this is like winning thelottery on a small level just
leaving the state for as much asthey get taxed on stuff. So, you
(07:28):
know, there we go. There's ourthere's our dig at at the state
here for a while.
We'll leave you aloneCalifornians for a little bit.
Not too long.
Chris Picciurro, CPA (07:36):
But Well, hey. You know what? I have made
friends with. I can't I'mserious. Very close friends with
tons of Californians that havemoved here too.
As you know, I like to say, andyou guys you and our buddy Jim
Ingersoll like to like to liketo razz me a little when I when
I was kicked off that podcast,beautiful and historic Franklin,
(07:58):
Tennessee. It was
John Tripolsky (08:01):
a good episode. If anybody missed that one, go
back and listen to it. We giveChris a hard time.
Chris Picciurro, CPA (08:05):
Another big one, real estate transfer
tax. So if you transfer propertyfrom one party to another
property, a lot of times,there's a transfer tax. I've
been subject to it withproperties in Florida. Some
states, it's very small. Somestates, it's large.
In New York state, it's likepoint 4% of transfers over a
half a million dollars, which isand New York City has an
(08:28):
additional tax, which is mostproperties in New York state,
really. In Florida, it's 70¢ per$100 of consideration. That's
significant. That's point 7%. Soeven if you sell a property at a
loss, John, and pay no incometax on that, you are paying a
state transfer tax.
John Tripolsky (08:46):
I didn't know that. Yes. Wow. Talk about it.
That's a bite, man.
Chris Picciurro, CPA (08:52):
That's a betta that's a that's more than
a nibble. That's a bite.
John Tripolsky (08:55):
Wow. I I had no idea.
Chris Picciurro, CPA (08:57):
Some states actually charge a
transfer tax if you transferproperty from your your name
into an LLC. So you've gottareally be careful about that.
John Tripolsky (09:11):
And with the transfer tax there, I'm I mean,
I won't dig into too much, butI'm I'm sure a lot of people
don't know either. So that'svery similar. I mean, I think of
just off the top of my head is,you know, you go to sell a car
or buy a car even if you don'tpay anything for it, you're
still paying that. Like, our so,I forget what it is here.
Chris Picciurro, CPA (09:27):
Michigan. Yeah. It's like the
John Tripolsky (09:28):
same thing. Right? Right. Oh, that's an
operating tax.
Chris Picciurro, CPA (09:32):
You actually had a good comment.
Congratulations. We're proud ofyou. No. No.
That's a great point. Thatvehicle tab. Sometimes you gotta
pay transfer tax on vehicles.Sometime some states like,
Michigan actually has a prettymodest it's called the ad
valorem or or tax on yourvehicle tabs because in theory,
(09:52):
it that that tax is based on thevalue of the vehicle, and it
goes down over time. Where somestates, it's very expensive to
own a vehicle.
John Tripolsky (09:59):
Like, I remember in South Carolina I'm gonna get
it wrong to the point somebodyagain, please correct me if I
am. When I lived in CharlestonCounty in South Carolina, bought
a new vehicle. I think thevehicle was, like, 41,000 or
something out the door a whileago. The sales tax was capped at
500.
Chris Picciurro, CPA (10:17):
Mhmm.
John Tripolsky (10:18):
But the registration fee was, like, 8 or
$900 or something a year, andthen it was bay it went down by
the mileage, which I looked atit like, what in the world?
Like, way way to complicate asystem, but you know? And then
he had people out there gettingfake oil change saying their
brand new car is 65,000 miles onit because there's a high
(10:38):
mileage vehicle tax deduction orsomething out there. But it's an
interesting spec.
Chris Picciurro, CPA (10:43):
Yeah. There's always there's always
something going on. So so, yeah,so a lot of times, transferring
that real estate, it's itsometimes sometimes it's called
a tax stamp or something. It itcan be expensive, and you gotta
look at first, say, butFlorida's a doozy, man. In some
states exempt, like, transfersfrom you to an LLC that you own,
(11:07):
but, you know Right.
Like, flow again, Florida's aFlorida's a tricky one, and we
have a lot of growth down there.
John Tripolsky (11:14):
And that's a good thing too, Chris. I mean,
you you know, we talk about taxplanning. I mean, that's
something that I unless youreally know somebody that knows
that market very well. Right? Imean, might not even think to
think of that.
Right? Because you might go in,you're like, hey. You know, my
margins are kinda short. Sayit's a fix and flip or something
along those lines, and you don'tknow that's there. I mean,
(11:37):
that's up.
Chris Picciurro, CPA (11:38):
I mean, I yeah. And that's why you wanna
work with, you know,professionals. I mean, we've had
Park Barofsky of MovementMortgage is a great resource
when it comes to mortgages, andwe've had Crystal Ball on from
Panama City Beach, a phenomenalrealtor. So but my point is is
when you're buying that thatthat property, if down the road,
(12:00):
you think you're either gonnatransfer it in and out of an LLC
due to financing or variousthings, you've gotta think about
that, especially in Florida inthat short term rental market.
So it's a team approach.
Of just be, you know, just beaware of those transfer taxes on
real estate in thejurisdictions.
John Tripolsky (12:15):
Makes sense. And I know the next one we're gonna
talk about. I won't say what itis. I'll let you do that. But
you would definitely pay thistax extremely high because you
would be getting a lot of thisif you didn't know about that
that, that tax that we justspoke about in real estate
drowning your service.
Chris Picciurro, CPA (12:31):
So the next tax is called a, quote,
unquote, sin tax. And, you know,that's not my term for it. But a
sin tax is an is an additionaltax beyond your normal sales tax
on certain items that thegovernment calls a quote unquote
(12:54):
sin to consume. Again, we're notwe're not the church. We're not
the state.
But in general, like alcohol andcigarettes are the largest types
of product that are subject toboth federal and state, quote
unquote, syntax. So it's justit's it's basically the they're
discouraging consumption, sothey wanna raise revenue to fund
public health by hitting peoplewith with a large tax. And and,
(13:19):
actually, not you know, somesome states have quite a bit of
sales tax on gas purchasing tooif they really are trying to be
green.
John Tripolsky (13:28):
Yeah. And there Chris, I mean, there's we could
take this and expand out it, youknow, very far. You know, a lot
of states I mean, I'm not gonnasay what side of the fence I am
on with that specifically. But,you know, Michigan has a lot of
consumable products now than alot of other states do not, and
they text the crap out of them.And I believe that there has
(13:50):
been some studies done that veryminimal people will stop
purchasing it even if the taxeswent up on it.
So maybe that's why they were Ijust think of, like, the Syntax
name. Right? Like, maybe that'sjust kinda where it came from
is, you know, they could tax thecrap out of it, you know, as
high as they want to, really, ina sense, and people still
(14:11):
consume it. Right? So who knows?
Chris Picciurro, CPA (14:13):
I mean, think about we I know we we work
in our in in the defeating taxesprivate Facebook group. We we do
a lot of education, and a lot ofthat comes from the tax
foundation, and they break downall types of different taxes.
And they did a big article oncigarette tax. So the federal
(14:35):
cigarette tax is about a dollara pack, but states vary. New
York, it's like $40 and $4.35per pack.
California is a little under $3per pack. That's a significant
tax if you're if you let's let'ssay you smoke a pack of
cigarettes a day. That's 5 NewYork, that's $5 a day times 365
(15:00):
days. That's a couple thousanddollars just in the tax, not
even the cigarettes.
John Tripolsky (15:03):
Well, there's people there. Right? I mean,
there's it's a legit problemfrom what I understand. People
like smuggling in cigarettesfrom New Jersey or somewhere
into New York and making abusiness out of it. I mean, it's
a legitimate business, but youknow?
Chris Picciurro, CPA (15:16):
Yeah. No. I mean, that that's Wild. That's
that's happening. Can you
John Tripolsky (15:21):
imagine that joining, like, NYPD and be like,
you know what? You're on theanti smuggling tobacco whatever
test for us.
Chris Picciurro, CPA (15:29):
I mean, it's legit. I mean, it's it's
definitely something that that'sout there.
John Tripolsky (15:35):
Sure.
Chris Picciurro, CPA (15:35):
So speaking of so we'll move away
from cigarettes, and let's talkabout alcohol tax. You know,
sometimes they go hand in hand.No pun intended. I actually pun
intended. Right?
You could have one in one hand,one in the other.
John Tripolsky (15:46):
That's very true.
Chris Picciurro, CPA (15:47):
But there's a federal excise tax per
gallon of alcohol, about $13.50for for spirits. Wines, about
buck to $3 a gallon. So that butthat'll last you till noon,
John, the way you operate. See,that's I I'm an alcoholic. We we
know you're not a wine drinker,John.
(16:07):
You're much more sophisticatedthan that.
John Tripolsky (16:09):
I tried it, and I think I embarrassed you, your
wife, and mine at a wine bar. So
Chris Picciurro, CPA (16:14):
I would know. I'm never embarrassed,
John. I was encouraging you. Iwas proud of you. You're right.
And then beers, you know,between $3 and $18 a barrel on
the federal side of things ontop of state potential potential
taxes on those. So, again, a lotof times, you know, you're
paying more for these productsbecause of the, quote, unquote,
(16:35):
sin taxes or hidden taxes. Youcan't I can't tax plan around
the cigarette tax. I get taxplanning around a lot a lot of
other things, but there's noother than telling you not to
smoke as much and and and not toremember, we do legally and
ethically reduce the tax you payin your lifetime, so smuggling
cigarettes across borders is isnot a legal or an ethical
practice.
John Tripolsky (16:56):
Ironically enough, here we are talking
about alcohol and cigarette tax.It mean you both grew up very
close to the Canadian Americanborder where bootlegger was,
like, the fame during theprohibition. Right? So maybe we
should do a bootlegging and taxepisode. That'd be good.
Chris Picciurro, CPA (17:13):
We could dig out. We could I
John Tripolsky (17:15):
don't know who would get on and talk about it,
but
Chris Picciurro, CPA (17:17):
I'm sure. Well, my grandfather told me
some interesting stories aboutpeople coming out through
swimming across the DetroitRiver and and all these other
cool things. But, anyway, let'swrap it up by a couple other
hidden taxes. I touched on thema little bit, but let's put some
numbers to it. Hospitality andlodging.
So hotel occupancy tax. Now,John, fortunately for you, when
(17:38):
you come to the beautiful andhistoric Franklin, you get you
have your own suite here at theat our household. But if you
didn't, you'd be slapped with a19 to 15% state and local
hospitality and lodging tax. Sothat's you know? So a lot of
times when you go on to acertain hotel, you know, a a big
(17:59):
hotel brand's booking site, youmight say, hey, you know, $150 a
night.
That's pretty good and then itends up being like 180 a night.
Right? That's why where thatfree breakfast comes in and
maybe free parking,
John Tripolsky (18:11):
you feel a little better.
Chris Picciurro, CPA (18:13):
Anyway, or rental vehicles and stuff. So
hospitality and lodging taxes.In in expanding on that, you
know, travel related taxes.Rental car taxes. John, another
attack tolls.
Another hidden tax.
John Tripolsky (18:28):
I didn't think of that one at all. You are
right.
Chris Picciurro, CPA (18:32):
Are right. We talked about gasoline taxes.
So a bunch of, you know, thesetype of consumption taxes that,
every, you that that can eataway at things. So those are
just those are probably the mostpopular hidden taxes. And I
would say if you're listening tothis, if you if there's a hidden
(18:53):
tax that we didn't mention, putit in the comments.
Put it in the comments of thisYouTube video or in the
defeating taxes Facebook group.I would love to know about it.
Maybe we'll actually create somecontent. So we're challenging
the listeners and the watcherson this episode.
John Tripolsky (19:10):
That'd be awesome. And and, Chris, that's
a great place to wrap this oneup. Right? And, yep, to to echo
what Chris said there, let'sfind out what you guys excuse
me, in your areas because somemunicipalities even have them
that, you know, they're not aslow or I was just gonna say
they're not more, geographicallywidespread. Right?
Like, I can think of some herein in our little town outside of
(19:32):
Ann Arbor, and it's not theUniversity of Michigan fan base
tax. And that's extremely highbecause they're such a good
team. We know how that goes.That's how we get Chris all
fired up. He might be able to,make his video disappear, but I
can mute him if he says anythingabout U of M.
So we're we're all good here.We're even. But, yes, let's do
(19:52):
that. Everybody post some stuff.Share it with us.
Share us the community. Let'sget it out there. Let's figure
out what's there. Now this isnot a, you know, bash your local
city on specific stuffconversation, but put them in.
Let's see what's there.
Let's have a discussion aroundit. And who knows? Might be
helping out your neighbor thatdoesn't know anything's there.
So as always, I am not gonna letChris say anything now because
(20:12):
he's gonna say something about Uof M. We'll leave him on the
side right in the pine, but wewill see everybody back here
again next week.
Completely different topic. Sameday of the week. A little bit of
a change in the timepotentially. Just like I like to
change the outro every show. Sosee everybody later.
Have a great week. Remember, taxplanning is your friend. See you
soon.
Disclaimer (20:37):
The content provided is for educational purposes
only. We encourage you to seekpersonalized investment advice
from your professional. For alltax and legal advice, please
consult your CPA or attorney.Investment advisory services are
offered through Cabin Advisors,a registered investment advisor.
Securities are offered throughCabin Securities, a registered
broker dealer.
The content of this podcast doesnot constitute an offer of
(20:58):
securities. Offerings can onlybe made through an offering
memorandum, and you shouldcarefully examine the risk
factors and other informationcontained in the memorandum.
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