Tax Headlines

1827

Maine ~ Personal Income Tax: Senate Revives Tax Rate Bill

The Maine Senate has passed a revised version of a bill that, if enacted, would gradually reduce personal income tax rates in the future until there is a single rate of 4%. The rate reductions would be funded by excess revenue deposited into the Tax Relief Fund for Maine Residents. The bill was previously passed by the Maine Senate (TAXDAY, 2012/03/20, S.14), but then rejected by the Maine House of Representatives (TAXDAY, 2012/03/30, S.8). Under the latest Senate amendment, the percentage of excess revenue that is transferred to the Tax Relief Fund for Maine Residents would be lowered from 40% to 20%.

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FinCEN Issues Guidance on Filing New Currency Transaction and Suspicious Activity Reports (FIN-2012-G002)

The Financial Crimes Enforcement Network (FinCEN) has issued guidance on filing the new currency transaction report (CTR) and suspicious activity report (SAR). The guidance clarifies certain inquiries posed by industry regarding the new reports. FinCEN’s new CTR and SAR are designed to accommodate all the different types of industries that will file the reports. As such, the new SAR contains certain sections of suspicious activity characterizations that will generally be most relevant to a specific industry. When the filing institution’s industry is selected, those sections specific to other industries will automatically be noted as not applicable by being grayed out.

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County Employee’s Disability Retirement Payments Determined by Length Service Not Entirely Excluded from Gross Income; Individual Not Liable for Accuracy-Related Penalty (Sewards, TC)

The portion of a county government employee’s disability retirement benefits that was based on the length of his service was not excludable from gross income. The payments were taxable to the recipient to the extent that they were determined by reference to his age or length of service even if his retirement was the result of an occupational injury. The statute authorizing payments to the employee was in the nature of a worker’s compensation act; therefore, only the benefit that exceeded the guaranteed amount was not excludable from the taxpayer’s gross income.

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Vermont ~ Corporate Income Tax: House Passes Bill That Would Increase Corporate Minimum Tax and Update IRC Conformity Date

The Vermont House has passed a bill that, if enacted, would update the state’s conformity with federal income tax laws for Vermont personal and corporate income tax purposes and increase the corporate income minimum tax for corporations with gross receipts in excess of $2 million. If enacted, the legislation would increase the $250 current minimum tax for corporations, other than small farm corporations and digital business entities, to $500 for corporations with gross receipts over $2 million and to $750 for corporations with gross receipts over $5 million. The increase would be effective beginning with the 2012 tax year.

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Idaho ~ Corporate, Personal Income Taxes: Composite Return and Back-Up Withholding Provisions Revised

The provisions concerning the filing of returns and paying of Idaho personal income tax on behalf of pass-through entity nonresident individual owners are revised. Under the new provisions, nonresident individual owners of a pass-through entity transacting business in Idaho or nonresident individual beneficiaries of an estate or trust with income taxable in Idaho may have the entity file a composite return to report and pay tax on the individual owners’ income associated with the entity. An election by individual owners to have the entity include their information and pay tax on the entity’s return is no longer available.

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CCH Weekly Report from Washington, D.C.

Before adjourning for a two-week recess, the House and Senate passed, and the president signed, legislation that temporarily extends federal highway spending and fuel taxes. The House also approved the Concurrent Resolution on the Budget for Fiscal Year 2013, which is expected to die in the Senate. The Senate, meanwhile, defeated a bill that would have repealed billions of dollars in tax breaks for the five largest oil and gas producers. IRS Deputy Commissioner Steven Miller, Service and Enforcement, stated the Service will remain focused on the large corporate sector in the future, but will aim to expend less time and fewer resources on examining compliant taxpayers.

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Florida ~ Multiple Taxes: Economic Development Legislation With Numerous Tax Provisions Enacted

Florida has enacted an economic development bill that makes changes to corporate income tax, franchise tax, sales and use tax, property tax, severance tax, and oil production tax. Notably, the bill increases the franchise tax exemption on banks and saving associations, amends the entertainment industry credits, and creates new sales and use tax exemptions.

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