Shutting down talk of a shutdown… The House is expected to vote on a continuing resolution to fund the government—including the IRS—through December 11. The resolution would include an extension of the Internet Tax Freedom Act, which bars states from taxing Internet access. Unless Congress acts, the law expires November 1.
Tax extenders are scheduled to see a vote, too. The Jobs for America Act, also scheduled for a vote this week, would make the Internet Tax Freedom Act permanent and repeal the medical device excise tax. Several “tax extenders,” including the research credit, certain business expensing, bonus depreciation, and rules for treatment of gains and charitable contributions of S corporations, would be made permanent. The Senate won’t go along, leaving the dispute for a lame-duck session.
More IRS-related votes are expected on the House floor this week. Three bills sponsored by House Ways & Means member Charles Boustany are scheduled for a vote: One would prohibit IRS employees from using personal e-mail to conduct official business. A second would give taxpayers' the right to administratively appeal adverse determinations of the tax-exempt status of some organizations. A third would allow taxpayers whose information has been leaked to learn the status of related investigations.
Hearings on the Hill: Tomorrow the Senate Finance Committee will hold a hearing on retirement savings, and Wednesday the House Ways & Means Subcommittee on Select Revenue Measures will hold one on defined benefit pension plans. Also Wednesday, the Senate Finance Committee will hold a hearing on energy tax policy, and the House Oversight and Government Reform Committee will hold one on the “changing story of IRS emails” with regard to former IRS employee Lois Lerner’s emails.
As for the NFL: It has problems, but losing its tax-exemption isn’t one of them. The National Football League has had nonprofit status since 1944, and received 501(c)6 status as a nonprofit trade organization in 1966. “Most of their income comes from licensing and royalties, which are not subject to the unrelated business tax,” notes Fran Hill, of the University of Miami School of Law. Oklahoma Republican Senator Tom Coburn has a bill that would take away the NFL’s tax-exempt status and save taxpayers $10 million a year—but it hasn’t gotten past the 20-yard line.
“You know happens when you assume…” Nevada’s legislature approved and Governor Sandoval signed a $1.3 billion tax incentive package with Tesla Motors late last week. It’s the biggest tax subsidy Nevada has ever seen and one of the largest in the country. Will Nevada realize the economic gains it anticipates? The answer depends on whether Tesla achieves as much cost-savings as it hopes with its 6500-employee gigafactory, if resulting business from the new battery plant goes to local companies, and if Tesla’s battery price supports demand. The odds of hitting this trifecta are about as good as, well, hitting a trifecta.
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