A spending bill before the weekend? The House appears poised to vote on a $1.3 trillion spending package today. In the nick of time, lawmakers worked out a fix for the “grain glitch” that gave a generous tax cut to agricultural co-ops. In exchange, Democrats secured an expansion of the low-income housing tax credit. The bill also includes $320 million in additional IRS funding for implementation of the Tax Cuts and Jobs Act. If both chambers pass the bill and President Trump signs it by Friday night, the government will avoid another shutdown.
The EU moves ahead with its tech tax. The European Union announced yesterday its plan to levy a new tax companies like Google and Facebook. The 3 percent tax on revenue, not profit, could raise $6.2 billion (€5 billion) next year. Tech companies have booked profits in low-tax jurisdictions, but this initiative would make it tougher for firms to hunt tax savings in the Eurozone.
Idaho tried to protect its residents from state tax hikes caused by the TCJA. It didn’t quite work. The Tax Cuts and Jobs Act will raise state income taxes in jurisdictions that link their revenue codes to the federal law. In an effort to make its residents whole, Idaho passed a $100 million tax cut. Yet many large low- and middle-income families still face tax increases. TPC’s Richard Auxier explains what went wrong.
Twenty-six years and counting. In 1992, the Supreme Court urged Congress to write rules of the road for state taxation of remote sales. Two-and-a-half decades later, the online market accounts for more than 10 percent of all retail commerce, states are largely ignoring the High Court’s 1992 constraints on taxing these sales, and Congress is still dithering. The Court, meanwhile, is about to take up the issue again. TPC’s Howard Gleckman tells the (really) long, sad story.
With Britain’s soda tax, more carrot than stick? The Washington Post considers the strengths of the UK’s tax on sugary beverages set to go into effect on April 6. Some of the country’s largest soda makers have changed their recipes in anticipation of the levy’s graduated structure. A lower rate of about 6 cents per serving applies to drinks with about 12 to 19 grams of sugar per eight-ounce can. Drinks with over 19 grams of sugar face a tax of 8 cents per serving.
Paying taxes on cryptocurrency can be… cryptic, to say the very least. The New York Times takes a look at the fears and follies of cryptocurrency traders and their efforts to comply with tax law by this year’s April 17 filing deadline. Last year’s cryptocurrency boom prompted the IRS to devote more resources toward investigating tax evasion. Paying taxes is complicated by the fact the IRS currently treats Bitcoin and the like as property, not currency. A trader must therefore treat every transaction as an individual taxable event. Said one trader, “It’s not Monopoly money anymore.”
New from Urban: TCJA’s Opportunity Zones successes depend first on governors. Urban Institute’s Brett Theodos explains that the Tax Cuts and Jobs Act includes a new federal incentive in its “Opportunity Zones. Designed to spur investment in poor and undercapitalized communities, state-designated Opportunity Zones could become the nation’s largest economic development program. Concludes Theodos, “The communities that governors select will eventually provide evidence on this incentive’s capability to drive meaningful, positive change in neighborhoods that need it. This is an exciting moment in the development of a new, sizable federal incentive for investing in undercapitalized communities.”
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