Tax Headlines

1827

Medical Marijuana Dispensary’s Cost of Goods Sold Estimated; Business Expense Deductions Disallowed; Accuracy Related Penalty Imposed in Part (Olive, TC)

The sole proprietor of a legal California medical marijuana dispensary failed to maintain sufficient records to substantiate the business’ income or expenditures. The fact that the marijuana industry operates in cash and shuns formal substantiation does not mean that a more lenient substantiation rule applies for marijuana dispensaries.

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House Passes Legislation to Address Tax Return Fraud

House lawmakers have approved bipartisan legislation that would strengthen criminal penalties against identity thieves who file fraudulent income tax returns and steal refunds. The House approved the Stopping Tax Offenders and Prosecuting Identity Theft Bill of 2012 (HR 4362 ) by voice vote late on August 1.

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Finance Panel Approves Tax Extenders Bill

The Senate Finance Committee on August 2 approved, by a bipartisan vote of 19 to 5, a $205-billion package of expiring tax breaks, but the measure faces an uncertain future on the Senate floor and in the Republican-controlled House. The modified Family and Business Tax Cut Certainty Bill of 2012 would protect taxpayers from the alternative minimum tax (AMT) for two years, and extend the research and development credit for the same period of time.

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Florida ~ Sales and Use Tax: Tax Imposed on Amount Online Travel Companies Pay Hotels, Not Amount Customers Pay

The Broward County, Florida, tourist development tax, which is imposed on the rent charged for hotel rooms, short-term leases, and other transient accommodations in the county, is imposed on the privilege of renting rooms and, as such, online travel companies (OTCs) must pay tax on the amount they pay hotels for rooms booked by their customers and not on the full amount the customers pay the OTCs.

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House Passes GOP Bill to Extend Bush-Era Tax Rates

House lawmakers on August 1 passed GOP legislation that would extend the middle-class tax relief enacted in 2001 and 2003 for one year. By a largely party-line vote of 256 to 171, the House approved the Job Protection and Recession Prevention Bill of 2012 (HR 8 ). Lawmakers also agreed to attach the Pathway to Job Creation through a Simpler, Fairer Tax Code Bill of 2012 (HR 6169 ), to HR 8 when both bills are enrolled and sent to the Senate. HR 6169 , which sets up an expedited process for passage of comprehensive tax reform legislation, will be considered by the House on August 2.

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Baucus, Hatch Plan Markup of Tax-Extenders Bill

The leaders of the Senate Finance Committee announced late on July 31 that they would hold a markup on August 2 of a bill extending a number of tax breaks set to expire at the end of 2012. The bipartisan Family and Business Tax Cut Certainty Bill of 2012 would cost roughly $151.7 billion over 10 years and does not include nearly 25 percent of the provisions typically found in an extenders package.

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