Tax Headlines

1827

California ~ Corporate Income Tax: FTB Not Required to Accept Certification as Proof for Enterprise Zone Hiring Credit

The California Supreme Court has concluded that the California Franchise Tax Board (FTB) may conduct an audit to determine whether a taxpayer is entitled to an enterprise zone hiring credit for corporation franchise and income tax purposes, and during such audit may require the taxpayer to establish that the employee is a “qualified employee.” The FTB is not required to accept a certification or voucher from a local agency as conclusive or prima facie proof that an employee is a “qualified employee,” nor is the FTB required to establish that the employee is not a “qualified employee.”

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Lawmakers Voice Support for Corporate Tax Extenders

Members of Congress took turns testifying at a hearing of the House Ways and Means Select Revenue Measures Subcommittee on April 26 in favor of extending the life of corporate and small business tax incentives. With the Bush-era tax incentives set to expire at the end of 2012 and talk of deficit reduction and tax reform continuing to draw congressional interest in 2012, lawmakers wanted to go on record in support of tax provisions they said would create jobs and provide a boost to the economy.

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Kentucky ~ Corporate, Personal Income Taxes: Limited Cooperative Associations Authorized, Fuel Production Credits Amended

Legislation has been enacted authorizing the creation of Kentucky limited cooperative associations and establishing rules for how biodiesel and ethanol fuel production credits may be shared among association members. Associations eligible to claim the credits against the Kentucky corporation income tax, limited liability entity tax (LLET), and personal income tax may elect to apportion a pro rata share of the credit only to members that contribute to the association based on the quantity or value of business done with or for such members for the taxable year.

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Six-Year Assessment Limitation Period Did Not Apply to Deficiency from Overstated Basis (Home Concrete & Supply, LLC, SCt)

A taxpayer’s overstatement of its basis in an asset that resulted in an understatement of gross income from the asset’s sale did not trigger the extended limitations period under Code Sec. 6501(e)(1)(A) because a basis overstatement is not an “omission from gross income.” Ordinarily, the IRS must assess a deficiency against a taxpayer within three years after the return was filed, but that period is extended to six years when a taxpayer “omits from gross income” an includible amount of more than 25 percent.

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IRS Provides Update to Issuers of Qualified Mortgage Bonds, Mortgage Credit Certificates on Average Purchase Prices for U.S. Residences (Rev. Proc. 2012-25)

The IRS has provided issuers of qualified mortgage bonds and mortgage credit certificates with the nationwide average purchase price of residences in the United States. The current nationwide average purchase price for use in the housing cost/income ratio for new and existing residences is $214,000. Also provided are the average area purchase price safe harbors for residences located in the statistical areas of each U.S. state, the District of Columbia, Puerto Rico, the Northern Mariana Islands, American Samoa, the Virgin Islands, and Guam.

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Nevada ~ Sales and Use Tax: State and Amazon Reach a Collection Agreement

Nevada Gov. Brian Sandoval announced that the state has reached an agreement with Amazon to begin collecting Nevada sales tax on purchases. Amazon has voluntarily agreed to collect sales and use tax in the same manner as traditional brick-and-mortar retailers. Additionally, the state and Amazon have agreed to work together to get federal legislation enacted that would create a simplified framework for sales tax collection. If federal legislation is passed, Amazon will begin its collection of Nevada sales and use taxes on the effective date of the legislation, or January 1, 2014, whichever is earlier.

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Arizona ~ Property, Miscellaneous Taxes: Constitutional Amendments Will Be Submitted to Voters

Two newly enacted resolutions proposing amendments to the Arizona Constitution related to personal property and real property taxes will be submitted to the voters at the next general election. First, S.C.R. 1012 would amend the Arizona Constitution, upon voter approval, by increasing the exemption for commercial and agricultural business personal property initially acquired during or after tax year 2013 from $68,079 to an amount equal to the annual earnings of 50 workers in the state, based on a designated national measure. Using the Federal Bureau of Economic data, that amount would be approximately $2.4 million.

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CCH Welcomes New Tax Tracker News™ Users

CCH is pleased to welcome a number of new users to CCH’s Tax Tracker News™, CCH’s customizable daily news service that is delivered via email or personalized news webpage. This valuable solution is part of your IntelliConnect®subscription and has been automatically set up for many who had not previously enabled this functionality.

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