Tax Headlines

1827

CCH Weekly Report from Washington, D.C.

President Obama and House Speaker John Boehner, R-Ohio, met for 50 minutes in the early evening on December 13 to discuss the fiscal cliff before Boehner returned to Ohio for the weekend, representing only the second time the two leaders have met face-to-face since the new talks began. Sens. Charles E. Schumer, D-N.Y., and Robert Menendez, D-N.J., introduced comprehensive tax legislation to help individuals and businesses rebuild in the aftermath of Hurricane Sandy;

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Ohio ~ Corporate, Personal Income Taxes: Taxpayers Who Increase Payroll May Reduce Amount of Depreciation Addback

Recently signed Ohio legislation permits certain taxpayers that claim an enhanced federal income tax depreciation deduction to reduce the amount of the deduction they must add back for Ohio income tax purposes for taxable years beginning in 2012 or thereafter, clarifies treatment of net operating losses, and makes various other changes.

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Arkansas ~ Property Tax: Timber Land Classification Addressed

An Arkansas taxpayer, who was denied a timber land property tax classification, was unable to establish that the denial constituted an equal protection violation. Although the taxpayer asserted that property may be classified as residential only when the owner lives on the land, no such requirement existed. Further, the requirement that timber land demonstrate profitability was included in state regulations and was not, as the taxpayer claimed, an ad hoc requirement that was not applied to other taxpayers. In addition, the taxpayer’s argument that a “view toward profit” should be sufficient to qualify for timber land classification was undermined by his own testimony, which established that he did not expect to profit from the land’s timber production. Lastly, the taxpayer’s argument that he was not treated in the same manner as other similarly situated taxpayers was rejected because the taxpayer failed to demonstrate that other cited properties were sufficiently similar.

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Virginia ~ Corporate Income Tax: Activities of Prescription Drug Developer Not Protected Under P.L. 86-272

For corporate income tax purposes, an out-of-state partnership that develops and manufactures prescription drugs (the taxpayer) was determined to be conducting some activities in Virginia that exceeded the protections afforded under P.L. 86-272, including activities that would occur during product manufacturing and testing, providing expertise in post-sale situations, tracking relevant state and federal compliance guidelines and regulations, and certain activities aimed at gaining approval as to the safety and effectiveness of a drug.

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