Tax Analysts Blog

Apr 29, 2016

Since 1960, Congress has enacted 66 major tax laws. At more than one major law per year, that makes for a pretty good clip -- and a lot of uncertainty.

Apr 28, 2016

Few terms in state and local tax are more of a misnomer than “nonbusiness income.” It’s as if nonbusiness income would have no relationship to a business. In reality, though, nonbusiness income is part of a business’s total income; it is simply not apportionable income. Thankfully, many states and the Multistate Tax Compact now refer to business income as apportionable income and nonbusiness income as non-apportionable income. While that provides some clarity, the underlying definitions – and how states apply them – leave much to be desired.

Apr 27, 2016

The Nelson A. Rockefeller Institute of Government recently released a report on state revenue generated from gambling, which everyone should read. The use of gambling as a source of state revenue has proliferated over the past three decades. Only Hawaii and Utah don't use any form of gambling to pay for public services. The proliferation of gambling is shameful. Before I explain why, you should know that I don't care whether you gamble -- what you do with your money is your business. I don't care if you smoke, drink, get high, or bet the ponies. But despite my libertarian views on the subject, I don't think gambling is a sound way to pay for government services.

Apr 20, 2016

It’s always enlightening to reduce information to a scoreboard. The state and local tax (SALT) team at Sutherland Asbill & Brennan LLP apparently knows that as well. On April 6 Sutherland released its SALT Scoreboard, a quarterly feature tracking significant state tax litigation across the country.

Apr 20, 2016

The Tax Foundation recently released its annual Tax Freedom Day report. Tax Freedom Day is the day when the nation has earned enough money to pay its federal, state, and local tax bills for the year. In 2016, that day is April 24.

Apr 19, 2016

Sen. Elizabeth Warren, D-Mass., might be a polarizing figure, but she is correct about at least one issue: pre-filled tax returns. Warren introduced legislation April 14 that would require the IRS to fill out tax returns for taxpayers with relatively simple tax situations. This would, of course, deal a major blow to the so-called Free File Alliance, which is primarily led by Intuit (the maker of TurboTax), H&R Block, and Jackson Hewitt.

Apr 13, 2016

https://www.law.uconn.edu/faculty/profiles/richard-pomp"Yeah, we're going to study that combined reporting thing," said an Indiana legislator when asked whether he supported combined reporting. In his defense, he's not a tax guy. Perhaps the decision to study combined reporting in Indiana is a good thing. Gov. Mike Pence (R) recently signed legislation directing the Legislative Services Agency to study and report on the feasibility of adopting combined reporting.

Apr 13, 2016

An April 6 news article out of Sacramento caught the eye of an editor in my office. The story provides details about companies that are applying for tax credits in California. The first company mentioned was Faraday Futures, and the second was Snapchat, but it was the third company that made the story interesting to the editor. According to the story, the online news company, Politico, “would expand its California operation by adding 41 employees in Sacramento — if it received $205,000 in tax credits.”

Apr 12, 2016

In amending the whistleblower statute and establishing a mandatory award in 2006, Congress evidently sought to provide greater incentives for whistleblowers by promising them more certain payments. But the statutory text does not seem to have anticipated FBAR penalties. That, combined with the subsequent delegation of administering the FBAR regime to the IRS, means that whistleblower awards largely continue to remain acts of administrative grace.

Apr 7, 2016

In September 2014 Treasury took its first stab at stopping the wave of inversions that some argued were stripping the U.S. corporate base. It issued a finely turned notice targeting the ability of companies to use cash in foreign subsidiaries without paying U.S. tax. Inversions continued. In November 2015 another notice came out, but that same month Pfizer and Allergan announced the largest inversion in U.S. history, a $160 billion deal that incensed some lawmakers.