It’s like chocolate suppliers cutting off the supply of hearts to card stores ahead of Valentine’s Day, but Jackson Hewitt Tax Service (JTX) is off sharply after its supplier of refund-anticipation loans, a unit of Pacific Capital Bancorp (PCBC), said it will provide just half of tax-preparer’s loans this year.
Tax-prep outfits, which tend to cater to less-financially-savvy consumers, find it very profitable to advance them their expected tax refunds. Think about it, getting a refund means you’re giving Uncle Sam an interest-free loan; then you pay interest to get the money back a couple of weeks early.
Meantime, Intuit (INTU), the maker of TurboTax software, trades is on the 52-week high list again (even without any endorsement from Tim Geithner.) And H&R Block (HRB) said it will open an office in New York City’s Times Square Thursday featuring a giant “smart wall” that “guides clients through an interactive tax experience.” Kinda makes you nostalgic for Times Square before they cleaned out the hookers and drug dealers. — Randall W. Forsyth
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