Proxy Tax

AAA

DEFINITION of 'Proxy Tax'

A tax on lobbying or political expenses that exceed an allowable amount set by the IRS. The proxy tax rate is set at the same rate as the highest corporate tax rate for that particular year. Organizations may be required to pay a proxy tax if they spend more on lobbying efforts than they initially estimated, or if dues used to pay for lobbying were lower than expected.

INVESTOPEDIA EXPLAINS 'Proxy Tax'

A proxy tax is a penalty, and can also be accompanied by other charges or penalties. If an organization pays a proxy tax on all of its lobbying expenditures then it allows members, whose dues paid for those efforts, to be able to deduct the value of their dues from their taxes.

RELATED TERMS
  1. Tax Rate

    The percentage at which an individual or corporation is taxed. ...
  2. Bag Man

    Any person in charge of organizing, collecting and transporting ...
  3. Formal Tax Legislation

    The process by which a proposed tax rule or tax change may become ...
  4. Internal Revenue Service - IRS

    A United States government agency that is responsible for the ...
  5. Legislative Overkill

    A law enacted to stop or prevent the abuse of a loophole, but ...
  6. Tax Schedule

    A rate sheet used by individual taxpayers to determine their ...
Related Articles
  1. Tax Deductions You May Be Missing
    Taxes

    Tax Deductions You May Be Missing

  2. 5 Tax Credits You Shouldn't Miss
    Taxes

    5 Tax Credits You Shouldn't Miss

  3. The History Of Taxes In The U.S.
    Taxes

    The History Of Taxes In The U.S.

  4. 10 Most Overlooked Tax Deductions
    Taxes

    10 Most Overlooked Tax Deductions

comments powered by Disqus
Hot Definitions
  1. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  2. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  3. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  4. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  5. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  6. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
Trading Center