Tax Headlines

1827

Michigan ~ Property Tax: Procedures Approved for Accelerating Collection of Winter Tax Levy

Beginning in 2013 and each subsequent year, a millage levied by any taxing authority within a local tax collecting unit that had been previously billed and collected as part of a local Michigan winter property tax levy in a preceding tax year may be collected as a summer property tax levy if certain conditions are satisfied. The aggregate amount of the revenue from the levy and collection of all individual millages that would be collected in the winter tax bill must total $100 or less per individual tax bill, excluding any property tax administration fee.

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Rules on Treatment of Overall Foreign and Domestic Losses Finalized (T.D. 9595)

The IRS has finalized regulations relating to the recapture of overall domestic losses that was enacted as part of the American Jobs Creation Act of 2004 (P.L. 108-357) (AJCA). The regulations also provide updated guidance with respect to overall foreign losses and separate limitation losses, and affect individuals and corporations claiming foreign tax credits. The regulations are effective as of June 22, 2012.

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Switzerland and Japan Agree to Pursue FATCA Framework with United States (TDNR TG-1618, TDNR TG-1619, Joint Statements)

The Treasury Department has issued two separate joint statements with the governments of Japan and Switzerland that express the countries’ mutual intent to pursue a framework of intergovernmental cooperation with the United States for implementing the Foreign Account Tax Compliance Act (FATCA), as enacted in the Hiring Incentives to Restore Employment (HIRE) Act of 2010 (P.L. 111-147), a senior Treasury official announced during a June 21 press conference accompanying the release of the joint statements. FATCA imposes numerous reporting and withholding obligations for payments to U.S. accountholders held in certain foreign financial institutions (FFIs).

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Oklahoma ~ Property Tax: Statutory Exclusion of Certain Property From Charitable Exemption Held Invalid

A not-for-profit corporate owner’s operation of a low-income housing complex, which was acquired using the proceeds from the sale of county bonds the income from which was exempt from federal income tax, nonetheless qualified as a dedicated and devoted charitable use, and thus the complex was exempt from local Oklahoma property taxation pursuant to the applicable Oklahoma constitutional ad valorem tax exemption.

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California ~ Motor Fuel Tax: BOE Discusses State Tax Increase to Be Triggered if Federal Excise Tax Expires

The California State Board of Equalization (BOE) advises taxpayers that if the federal excise tax on fuel and federal highway funding to the states expires on June 30, 2012, the California excise taxes on diesel fuel and motor vehicle fuel will be adjusted beginning July 1, 2012. Authorization for the U.S. Department of Transportation to collect the federal excise taxes on fuel expires on June 30, 2012. These funds are deposited into the Federal Highway Trust Fund and disbursements from the fund are used for highway, bridge, and transit projects (surface transportation). As previously reported (TAXDAY, 2012/05/22, S.6), if Congress fails to act by June 30, 2012, and the federal excise tax and surface transportation funding expires, California and other states will no longer receive federal funds reimbursing them for the expenses they incur for highway and transit projects.

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IRS Issues Guidance on Tips and Service Charges (Ann. 2012-25, Rev. Rul. 2012-18)

The IRS has issued guidance that clarifies and updates existing guidelines on the taxation of tips. The guidance covers employer and employee obligations under the Federal Insurance Contributions Act (FICA) with respect to tips received by employees. It also discusses the credit for the employer share of FICA taxes paid under Code Sec. 45B(a). Finally, a selection of questions and answers is provided, addressing issues such as:

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Bonus Depreciation Bill Introduced by House Democrats

Legislation that would extend 100-percent bonus depreciation through 2012 was introduced on June 20 by Democrats on the House Ways and Means Committee. The Invest in America Now Bill of 2012 was introduced to spur House GOP lawmakers to pass legislation to boost the economy before Congress leaves for its August recess. Republicans on the panel have said they expect to work on a bill during the week of June 25 that would extend a group of expired or expiring tax provisions and also set in place the framework for comprehensive tax reform.

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Oklahoma ~ Personal Income Tax: Capital Gain Deduction Disallowed for Goodwill

A taxpayer could not take the Oklahoma capital gains deduction on his 2006 personal income tax return for gains received for goodwill and other intangibles from the sale of his ownership interest in a limited liability company (LLC). The taxpayer alleged that under 68 O.S. §2358, he was entitled to claim a capital gains deduction in 2006. The Oklahoma Tax Commission (OTC) denied the claim and argued that, until it was amended in 2007, 68 O.S. §2358 did not allow a deduction for intangibles and that the capital gains deduction for intangibles did not go into effect until the 2008 tax year.

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