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Gringo Gazette

Que Pasa in Baja?

Baja prepares for Influenza. Even though COVID-19 cases have been consistently decreasing lately in our State, the regular flu season is about to begin, threatening the public with a health challenge of its own. Alonso Rico, head of the State Health Office, already announced they have been preparing for it with a fivefold strategy, which consists of vaccinating all members of the “at risk” population for this year’s influenza strain; making sure the hospital infrastructure is functioning properly: ending the exchange agreement between hospitals that allows people to go only to the facility they are affiliated to; ensuring the availability of a  consistent supply of medicines; and lastly, providing the presence of qualified medical personnel for December.

Government cracks down on fake documents. Our state government stated that it has found a great number of fake drivers licenses, mostly Type C, which are the ones needed by drivers of vehicles used for public transportation.

Officials said they are being sold in the “5 y 10” area in Tijuana, for around $2,000 pesos. This is more than what it would cost to get the real thing; however, a requisite to get this kind of drivers license is to have no criminal records, and most of the people that buy the fake ones have them. Add “Possession of a fake government ID” to that record!

Governor and Tijuana mayor clash again, this time over the closure by the state government of a storage facility where the local DIF kept the food packages that are distributed in the poorest areas of town.

The State Government closed down the facility because they said “expired candy” was found there.

Consequently, the city of Tijuana announced that about 3,500 citizens that receive a food package every week will not be able to get them.

Magdalena Bautista, head of DIF Tijuana, stated that the act was retaliation for the bad relationship that the Tijuana Mayor and Governor have had in the past.

Ensenada mayor passes the hat in Cali. In a three-day tour of the counties of Orange, Los Angeles and San Diego, Armando Ayala was able to get donations with a value of more than $2 million USD.

Among the things that he was able to get for Ensenada were two 2002 Kenworth trucks for use by the city garbage collection service, three Vactor trucks for the city water company, a fully equipped ambulance and two 32-passenger buses.

During the tour he also officialized Ensenada’s intentions of sistering the cities of Pico Rivera and San Diego.

Police Chief in hot water. Adrian Ortiz, head of the police department in Ensenada, landed himself in hot water after he jokingly stated that “after taking the weapons away from police personnel, crime rates lowered.”

Several police officers protested outside of the public security building expressing their outrage over Ortiz’s comments.

They are demanding a public apology from him, because they claim that the already beaten-down image of the police force was even more damaged and now it’s from the police chief himself.

For his part, Ortiz said it was all a misunderstanding and that he never meant the statement that way.

Baja’s COVID risk color improves to orange.  The “stoplight” that measures our risk factor was changed from red to orange this week, this means that now businesses will be able to have a 50% occupancy instead of the usual 30%, with the exception of supermarkets which are now allowed to have a 75% occupancy with the usual precautions. Kids are now allowed into businnesses also with the usual precautions.

Bars and event venues will continue to be closed.

Governor Bonilla stated that the federal government is strongly pushing towards changing the “stoplight” to green so the economic reactivation starts sooner.

Alonso Perez Rico, head of the state health office, reminded the popullation to use their masks at all times in public places, a noticeable decrease in the use of it has been seen.

California Wealth Tax, a Dangerous Initiative

As the Pandemic dried state treasuries, they desperately seek new ways to get more revenue.  Like addicts without a fix, some have resorted to extreme measures. I watch these with trepidation because the emergency makes them justifiable to legislatures. But once adopted, they tend to grow roots and become permanent, making them doubly dangerous. New York just enacted its own way of getting the “stuff”. Others will likely follow.

California’s Wealth Tax initiative -AB2088- is textbook “California”: innovative, greedy and innocuous looking from popular perspective. After all, it only applies if your net worth is over 30 million (15 if married filing separately). Read even if it still does not yet apply.

This is a “net worth” tax. Unlike an income tax, this requires you to compute your worldwide net worth to figure if the tax applies. A long list of assets are included in the mix, even if they are difficult to value family businesses, startups, farms, or others. Since cash counts, you would have to disclose its existence to California, no matter where located, even if it’s under your mattress.

If you barely met the threshold, $120,000 would be added to your annual tax bill.

In a pernicious twist, if you decide to become a nonresident, leaving that nonsense behind, you would remain subject during the next ten years, albeit at “generous” declining tax rates. Worse, it invents a new “temporary resident” category, aimed at those spending over 60 days in the state over the year. Those would prorate the tax based on time spent in California. Aimed at snowbirds, those should be very leery of these provisions. They could find themselves stuck with a California reporting obligation and tax even if they have no corresponding federal one. No tax treaty would be of help against California.

Dangerous? Well, it’s populist. It sounds good to tax the wealthy. I would generally agree, except there’s no guarantee that once enacted, that $30M “floor” won’t somehow move down to include more and more taxpayers. The compliance costs, even figuring out if you are subject, can be staggering and can exceed the tax itself. You have foreign businesses or investments or retirement funds anywhere? They go in. It can quickly get quite complex.

In my almost 25 years as a licensed attorney, I have never seen such a worrying proposal from California, the state that even figured how to tax satellites that fly far above the state.

Orlando Gotay is a California licensed tax attorney (Master of Laws in Taxation) admitted to practice before the IRS, the U.S. Tax Court and other taxing agencies.  His love of things Mexican has led him to devote part of his practice to federal and state tax matters of U.S. expats in Mexico.  He can be reached at [email protected] Facebook: GotayTaxLawyer or WhatsApp at +17604491668. This is just a most general outline. It is informational only and not meant as legal advice.

Missing American Couple Found Dead

The bodies of Ian Hirschsonhn and Kathy Harvey that were reported missing two weeks ago were found at the bottom of a water well in Ensenada.

According to Ian’s daughter, they couldn’t be lost as the 77-year-old man knew the area very well, as he frequently visited since 1985.

Kathy and Ian were last seen in their truck, which was found abandoned seven days later.

On September 4, San Diego’s Police Department, where the couple was from, confirmed that the bodies were  Hirschsonhn y Kathy Harvey.

Hiram Zamora, a local prosecutor in charge of the case, said to the press that they were both murdered in their house by a drug addict who wanted to steal from them.

The suspect, who has already been identified, moved their bodies from El Socorrito (near San Quintin) to the city of Ensenada, where they were later found.

The couple rented a house near El Socorrito beach, a popular area for American retirees.

Local Wines to be Auctioned by Mortons

Mortons Auctions, the most important auction house in Mexico, announced an upcoming auction of wines and liquors this past week. The virtual event will include variety of Mexican wines, from popular labels to collectibles, with a unique selection of wines from Baja California thanks to a partnership with Provino.

The auction will be online and is scheduled for this coming Thursday, September 10 at 4:00PM (local time), 6:00PM (Mexico City time).

Casa de Piedra, Vena Cava, Cava Maciel, Las Nubes, Emeve, Corona del Valle Alximia, Madera 5 and Monte Xanic are some of the wineries that you will be able to find in the catalogue.

The auction is already online on the bidsquare platform, click here to check it out and place a bid.

Sorry US residents; these wines can only be shipped to Mexico addresses.

Tijuana-Tecate Passenger Train Announced

Mario Escobedo, head of the state economy and tourism office, said that the Tijuana-Tecate passenger train is already on the works with an initial investment of 136 million USD for a 17 miles section.

He stated that the train would be a secure, sustainable option to connect with Tijuana and Tecate, with seven stations and two terminals. A minimum of 30,000 passengers are expected to use the train every day.

This project should not be confused with the already present tourism train that goes from Tijuana to Tecate (pictured above).

Initially, the project considered a route to Ensenada. And although the plan hasn’t been cancelled, Escobedo stated that “it’s not a priority right now”, mainly because the current state government administration will only last two years and will not be able to finish a project of such magnitude.

Mexican Army Seizes Drug Load Valued at 16 million USD

Soldiers from the Mexican Army seized a massive load of a variety of drugs in the La Rumorosa area in Tecate.

The illicit drugs were found in an inhabited area about 6 miles south from the La Rumorosa town.

The army reported that 1 ton of crystal meth was found, along with 6 kilos of powdered fentanyl and 5,000 pills of that same drug. About 5.3 kilos of heroin and 4 gallons of marihuana (THC) oil were also found.

The army stated that the bust would considerably affect the financial structure of local crime organizations since the total street value of the drugs was about 16 million USD.

The drugs were found abandoned on a dirt road when the military was doing a surveillance drive through the area. No arrests were made in connection with the drugs.

Foreign Asset Control and You

BY ORLANDO GOTAY / TAX ATTORNEY

If you are a US person who runs a business in Mexico and have not heard about OFAC, perhaps you should. OFAC (Office of Foreign Asset Control), is part of the US Treasury. It administers dozens of programs related to trade and economic sanctions to further US national security interests.

OFAC foreign asset control programs designate both foreign individuals and entities for economic sanctions. Some of these are country focused, such as Cuba, Iran, Venezuela and North Korea. Others are broader, making designations under Global Terrorism, Narcotics Trafficking and “Kingpin” lists, among others. Because these are economic sanctions, the lists include entities in which target persons have a majority ownership too, even if the named entities themselves have no actual relation to what got the “owners” on the list. This is the so-called “Specially Designated Nationals (SDN) and Blocked Persons” list.

Sanctions are a bad thing. One does not want to be on these lists. Why is this relevant to you? Great question!

If you are a US person, you are not allowed- in fact, you are prohibited by federal law- from doing business, receiving or giving property to anyone on these lists. OFAC has a comprehensive database of listed persons and entities that change constantly. I just searched it to figure out how many entries it had for Mexico; it returned over seven hundred names. On the basis of a name alone, some businesses would hardly be noticed. There is a childcare center, hotels, even an air taxi service. But the rule is there and it’s on you to not do any business with listed persons.

Why? Because, you can be fined for a violation of OFAC sanctions if you have prohibited transactions with sanctioned persons. More serious cases could warrant more comprehensive actions, ranging all the way to criminal prosecution.

Compliance with these rules can be burdensome. There are screening services that will clear names for you. If you are operating a souvenir shop somewhere, you may not need to do much screening. If you are a real estate developer, the scope of your activities could be such where it may be worth the while, maybe even critical, to screen against the OFAC list.

Of course, the screening universe includes not only clients, but even partners and service providers.  Remember, it’s on you not to do business with them!  You were told.

Orlando Gotay is a California licensed tax attorney (Master of Laws in Taxation) admitted to practice before the IRS, the U.S. Tax Court and other taxing agencies.  His love of things Mexican has led him to devote part of his practice to federal and state tax matters of U.S. expats in Mexico.  He can be reached at [email protected] Facebook: GotayTaxLawyer or WhatsApp at +17604491668. This is just a most general outline. It is informational only and not meant as legal advice.

Victor Diaz Dies at 77

On Saturday, August 8th, Victor Diaz, loving husband and father of 4, passed away at the age of 77 in Tijuana.

He was born in Mexico City on December 1st, 1942, although he lived his final years in Rosarito, where he helped countless families move between the US and Mexico with his business “Fletes y Mudanzas Diaz”.

Mr. Diaz, an honest man of strong convictions, was very well appreciated in the local community, especially by the staff of this newspaper where he was a good friend and a client for over 5 years.

He is survived by his wife Juanita Ramirez, his four children, Victor Hugo, Jose Humberto, Leo Kenneth and Omar Saul, his 7 grandchildren and 2 great-grandchildren.

He will be greatly missed.

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