Powell and Mnuchin offer different economic outlooks. In testimony before the House Financial Services Committee yesterday, Treasury Secretary Steven Mnuchin said he expects the US economy to “improve significantly” in the second half of the year. But Federal Reserve Chairman Jerome Powell warned of obstacles ahead. He continues to say that a full recovery remains unlikely until the coronavirus is contained.
Will COVID-19 depress property taxes? TPC’s Robert McClelland reviews research on what happens to property taxes in economic downturns, including after the real estate bubble burst during the Great Recession. “If history is a good indicator, and so far it seems to be, property taxes may hold up better in the COVID-19 economy than sales and income taxes,” Rob concludes. That’s a small piece of good news in an otherwise dismal outlook for state and local governments.
The US Supreme Court Reverses a state court ban on tax credit scholarships for religious schools. In Espinoza v. Department of Revenue, the high court overturned a 2018 Montana Supreme Court decision that blocked the tax credit scholarships. The US Supreme Court remanded the case to a trial court. In 2015, Montana gave taxpayers a dollar-for-dollar tax credit of up to $150 on contributions to scholarship organization that support private school students, including those in religious schools. The Montana Supreme Court said the program violated the state Constitution by permitting indirect tuition payments to religious schools.
In Nevada, gambling revenues are busted. Casinos, closed through May because of the coronavirus pandemic, generated next to no tax revenue for the state. House winnings fell by 99.4 percent compared to May 2019. Mobile sports betting and interactive poker generated some winnings, but produced tax revenues of just $56,000 in May, a 99.9 percent drop from the same period last year.
Ohio AG says GM should repay $60 million in state tax credits. State Attorney General Dave Yost argues that General Motors agreed in 2009 to maintain operations in Lordstown, Ohio, through 2028 and keep 3,700 people employed through 2040, in exchange for state tax credits. “We demand the money that is rightfully owed to Ohio – no more, no less,” Yost said. GM did not immediately comment. GM closed the Lordstown plant after 52 years in the spring of 2019 due to insufficient sales of the sedans the plant produced.
In case you missed it, Tax Day remains July 15 this year. Despite some calls to extend the federal income tax filing and payment deadline yet again, Mnuchin said the July 15 deadline will hold. Individuals needing more time can request a filing extension to October 15, but they still must pay any balances due or estimated taxes by July 15 to avoid penalties and interest. The IRS estimates that almost 90 percent of taxpayers already have filed. Most procrastinators are disproportionately wealthy and many likely owe a payment.
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