GOP Sen. Pat Toomey: Make “full expensing” permanent. The Pennsylvania senator introduced legislation to permanently extend a provision of the Tax Cuts and Jobs Act (TCJA) that allows a businesses to immediately deduct the full amount of their capital investments. Full expensing is scheduled to phase out after 2022. The bill also corrects a drafting mistake in the TCJA that requires retailers and restaurants to depreciate their equipment capital speover 39 years from immediately deducting the costs of their renovations rather than instead.
Happy Valentine’s Day from TPC! If the holiday makes you think about marriage, check out our updated TPC Marriage Bonus and Penalty Calculator. It compares federal income taxes owed by couples if they remain single partners or if they get married. Chocolates not included.
Starting today: Tariffs on some goods drop by half, but not for all US companies. As part of the partial ceasefire in its ongoing trade war, the Trump Administration agreed to reduce by 50 percent the levies on $75 billion in imported goods including soybeans, cars, and crude oil. Thousands of US companies, however, continue to pay higher prices for foreign goods since they have not received waivers from the federal government. NBC News reports that the exclusion requests, overseen by the Office of the US Trade Representative, are processed slowly and reasons for rejection “are, at best, opaque.”
Attention Fortnite gamers: V-Bucks are not virtual currency. The Washington Examiner reports that this tax season, the IRS will not ask whether taxpayers have used “V-bucks,” the “money” used for in-game purchases for Fortnite. The IRS had included V-Bucks as an example of convertible virtual currency that has an equivalent value or substitutes for real currency. Transactions in these currencies, such as Bitcoin, are subject to capital gains tax. After media coverage on Wednesday, however, the IRS reversed course and removed V-Bucks from its definition of virtual currency.
Attention Netflix bingers: Maine may be the next state to try to tax streaming services. Governor Janet Mills’ administration has proposed taxing services like Netflix and Spotify. Streaming would face the same tax as phone and internet service and video rentals. Maine’s finance department estimates the tax could generate $3.7 million in 2021 and up to $6 million by 2023. That gain would be mostly offset by adjustments to individual income taxes and a reduction in taxes paid by nonprofits.
In Tennessee, lawmakers worry that a tax holiday will encourage women to hoard feminine hygiene products. Forbes reports on the journey of a state bill, sponsored by female lawmakers, that would include feminine hygiene products in the state’s annual three-day sales tax holiday. Said one vocal opponent, Republican Dr. Joey Hensley, “I would think since it’s a sales tax holiday, there’s really no limit on the number of items anybody can purchase…” Lawmakers have voiced no similar concerns about other products covered by the sales tax holiday, such as clothing, art supplies, or computers. Maybe they’re just concerned about bathroom storage space?
Monday is Presidents Day. The Daily Deduction will return to its regular schedule on Tuesday, February 18.
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