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States look to tax collection to fill empty coffers

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Several states, including Illinois, California, Massachusetts and New York, are cracking down on sales tax cheats to fill state coffers drained by the tanking economy, the Associated Press recently reported.

Verenda Smith, a government affairs associate for the Federation of Tax Administrators, said, “As their budgets quickly hit the skids and the pressure is on, they’re going to be looking to see where those dollars are.”

According to researchers at The Tax Foundation, small businesses tend to be the biggest tax evaders, and are therefore a prime target for increased collections. But Illinois is also pursuing large corporations, particularly those structured as “pass-through” companies that shift their income tax liabilities to shareholders or to other states.

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