The incredible shrinking tax cut… The IRS published its inflation adjustments for tax year 2019. The Tax Cuts and Jobs Act requires the agency to use a slower-growing measure of inflation to adjust tax code features, including the standard deduction and tax brackets. As a result, more income will be taxed or taxed at higher rates. The change will cost taxpayers $133.5 billion over ten years.
Advice to states in a post-TCJA world… TPC’s Richard Auxier and Elaine Maag explain that some low- and middle-income families will pay more in state income taxes because of the complex relationships between state and federal tax law and the inability of some states to respond to the TCJA. Their new TPC paper presents a simple solution for these states, and for any state trying to assist families: Create a refundable child tax credit. .
Religious group wants a repeal of part of the TCJA. The Southern Baptist Ethics & Religious Liberty Commission wants Congress to rescind Section 512(a)(7) of the 2017 tax law. That provision requires nonprofits, including houses of worship, to pay a 21 percent tax on employee benefits including parking and transportation. The group says the provision “will hopelessly entangle the [Internal Revenue Service] with houses of worship, simply because [they] allow their clergy to park in their parking lots.”
Amazon’s deal of the day: New York. Bloomberg Tax reports that Amazon may qualify for additional tax breaks beyond the $1.5 billion included in its initial agreement with New York State. By contrast, Virginia capped its incentives to Amazon at $573 million in its Crystal City deal.
Nevada beats its marijuana tax collection record. Revenues are continuing to grow. The state’s Department of Taxation says that retail and wholesale pot taxes generated $8.1 million in August. That’s a monthly record, topping July 2018’s revenues of $7.9 million. In August 2017 the marijuana tax generated revenues of $4.9 million.
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