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State Taxes

Each state and territory in Australia imposes taxes on a range of transactions/events affecting matters in the state/territory. Whilst the states and territories have attempted to take a uniform approach to taxation there are significant differences in the tax base, exemptions, rates and rights to object/appeal and seek refunds. 

Payroll Tax

Payroll tax is a tax levied on wages paid by employers to their employees. Whilst there are common provisions and definitions between states, the requirements, liabilities and rates of tax vary from state to state, and each administrator differs in how they interpret various requirements. 

As payroll taxes make up a large proportion of an entities’ taxes, it is important for employers to ensure that they have adopted the appropriate tax treatment and that those treatments are reflected in their internal tax policies.

In our experience the key areas requiring focus to ensure that errors are not made and there is no exposure to penalties include ensuring that:

  • the classification of workers as either employees or contractors is correct with an understanding that the legislation in each jurisdiction deems certain contractors to be employees for payroll tax purposes
  • all non-cash benefits are included in the calculation taxable wages
  • all associated entities with the relevant connection are grouped for payroll tax purposes.

Stamp Duty

Stamp duty is a tax imposed by individual states and territories on various transactions either at a fixed rate or at an “ad valorem” rate on the value of the transaction. In general, duty is imposed on the transfer of dutiable property or conveyances of property. Duty can also be imposed on (but is not limited to) declarations of trusts, surrenders of interest in land, foreclosures of mortgages and vesting of dutiable property as a consequence of a court order and certain leases.

The transfer of shares or units in certain landholder corporations and unit trusts which have an interest in dutiable property can also attract a duty known as landholder duty. These laws seek to ensure that duty on the transfer of land is not avoided by transferred shares or units in land-holding entities, rather than the land itself.

It is important to consider stamp duty implications when undergoing any acquisitions or restructures that directly or indirectly involve the transfer of dutiable property.

Land Tax

Land tax is an annual tax on the ownership of land. Broadly, it is a tax charged on the unimproved value of land above a certain (jurisdiction dependant) value threshold. 

Depending on the jurisdiction, how your obligation is calculated can depend on:

  • the type of land held and its use
  • the value of the land
  • whether the land is occupied
  • whether the owner is a trust
  • the residency status of the land owner.

The unimproved value of land is generally taken from local council valuations. Therefore it is important to check the value notified in rate notices to protect your objection rights. 

Other State Taxes

Other state taxes include:

  • the Victorian windfall gains tax
  • gambling and wagering taxes
  • health insurance levies
  • mineral and resource royalties.

State Tax Rates

Click here to view a summary of the key state taxes and their rates.

How we can assist you

How we can assist you

We have extensive experience acting for individuals, small-medium sized enterprises and multinational corporations in state tax matters. Predominantly, we can assist you with the following:

  • advising on potential tax risks, liabilities and exposures
  • determining the appropriate structure for transactions
  • identifying and preparing applications for relevant exemptions / concessions or rulings
  • managing investigations, objections and disputes with the relevant state authorities, including settlement negotiations, administrative reviews and court appeals.

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