President Trump signs a spending bill to keep government open, declares a national emergency to fund a border wall. On Friday the president signed a budget deal to keep nine government agencies, including Treasury and the IRS, open through the fiscal year. At the same time, said he’d get up to $8 billion for a border wall by declaring a national emergency. His move already has spurred a flurry of lawsuits.
Why is Amazon’s US tax bill so low? CNN explains why the company didn’t pay any federal income tax in 2017 and 2018. Among the reasons: Earnings from non-US sales; accelerated depreciation on equipment purchases for fulfillment centers; and research and development tax credits. The firm reported a net tax credit of $129 million in 2018, and a net credit of $137 million in 2017. Its most recent financial statement shows $1.4 billion in unused federal credits to offset future tax bills. Amazon paid $533 million in state taxes and $1.3 billion in international taxes over the past two years.
Rubio’s buyback tax. GOP Senator Marco Rubio wants to tax stock buybacks to fund permanent expensing for business investment. So far, he’s described the idea in just a few sentences of a long manifesto on China, but Rubio said late last week he’d introduce a bill within a few weeks.
More on underpayment penalties. Most of the attention so far this tax season has been on smaller-than-expected refunds in the wake of the many changes in the Tax Cuts and Jobs Act. But congressional Democrats also are keeping up the heat the IRS for TCJA-created underpayments. Senate Democratic Leader Chuck Schumer and Finance Committee senior Democrat Ron Wyden asked the IRS to waive all penalties for those who must write a check to the IRS by April 15. The only exception: Those who deliberately understated their incomes.
New York faces a revenue shortfall. Governor Andrew Cuomo wants to shift money between state accounts to cover a $2.6 billion state revenue shortfall in the current fiscal year, reports The Wall Street Journal (paywall). Estimated income tax payments are $2.3 billion shy of projections. Cuomo says it’s because the stock market performed poorly and wealthy New Yorkers left the state in response to the TCJA’s cap on state and local tax deductions. Given the current shortfall in revenues, the budget gap for the coming fiscal year is now estimated to be $5.9 billion compared to earlier estimates of $4.6 billion.
Connecticut tax talk: Sugary drinks and cars. Governor Ned Lamont’s budget includes a one penny per once tax on sugary drinks. The same proposal failed two years ago when analysts estimated it could raise $145 million annually. Lamont likely also will support a legislative proposal to lower motor vehicle taxes for 156 of the state’s 169 cities and towns. The state allows local governments to impose their own car taxes but the bill would set a uniform tax rate of 15 to 19 mills. The tax rate currently ranges from 11.369 mills to 45 mills.
With taxes, finders aren’t keepers. A Tampa-area man filed a 2016 income tax return in February 2017 with a W-2 showing $17,098 in wages and $1 million in federal income tax withholding. The IRS issued a refund for $980,000. Thing is: The gentleman earned $2,098 and no tax was withheld. He kept the money, and the US government has filed a forfeiture complaint to get it back. Chuck Pine, a former high ranking criminal enforcement officer at the IRS, told The New York Times that the IRS refund processing systems should have flagged a refund this large.
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