In many areas, a state or a county operates a tax agency fund that includes coll

Question

In many areas, a state or a county operates a tax agency fund that includes collections and remittances for local jurisdictions within the bigger jurisdiction. In some ways the tax agency is an entity that operates independently. The goal is to have sufficient appropriations to cover the cost of operations. It is similar to some of the proprietary funds, but unlike a business type fund, the customers are limited to other governments, and none of the monies collected belong to this fund.

Why would a tax agency be set up this way?

Explanation / Answer

Tax agency fund is constituted to collec taxes, not only of its jurisdiction but also of the surroundings for facilitation of proper assessment.

It is just an organization of government, which is not for profit and only for facilitation of collection of revenues. It account for the taxes it collected on behalf of other governments in its GAAP based financial statements and none of the collections belong to this fund. It appropriates only to meet the cost of operations and not to make any profit.

This set up is only for the facilitating the states and centre to collect taxes in an easy way and to make the assessments in a healthy way.

Hope it is helpful!!

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.