Tax News

CCH (cch.taxgroup.com) reports:

The Washington Supreme Court has affirmed a superior court order prohibiting the city of Bellevue from imposing its utility occupation tax on a network telephone service provider's charges for access to interstate service, charges for interstate services, or federally tariffed charges. The state high court found that RCW 35A.82.060(1) precluded such taxation.
The city disputed the superior court's ruling to the extent it held that customer access line charges; private line, frame relay, and ATM service charges; and other federally tariffed charges were necessarily charges for interstate services. The Supreme Court stated that whether the Federal Communications Commission or the Washington Utilities and Transportation Commission had jurisdiction over certain charges (i.e., whether the charges were for access to interstate or intrastate service) was not determined by looking to the customer's use of the connections, as the city contended. Instead, whether charges were charges for access to interstate, as opposed to intrastate, service was a question of law, and the city's contention that a court needed to conduct factual analysis to determine the interstate or intrastate nature of the charges was erroneous. In addition, the Supreme Court agreed with the company's position that access charges imposed pursuant to federal tariff were by law charges imposed on access to interstate service.
The Washington Court of Appeals had recently interpreted RCW 35.21.714, a statute substantively identical to RCW 35A.82.060, as precluding tax on interstate services only when those charges were to another telecommunications company. (Community Telecable of Seattle, Inc. v. City of Seattle, 149 P.3d 380 (2006)) However, the Supreme Court disagreed with the Court of Appeals' interpretation and found that the legislative history of RCW 35A.82.060(1) supported the conclusion that the statute precluded taxation of charges for interstate service regardless of whether those charges were to another telecommunications company.
Qwest Corp. v. City of Bellevue, Washington Supreme Court, No. 79909-1, August 30, 2007, ¶202-674
Other References:
Explanations at ¶72-001

CCH (cch.taxgroup.com) reports:

Missouri Governor Matt Blunt has signed special session legislation that provides new and enhanced corporate income, corporate franchise, financial institutions franchise, express companies (utilities), insurance gross premiums, and personal income tax credits designed to spur economic development in the state. Specifically, the legislation increases the annual tax credit cap and makes other changes relating to the quality jobs program, enacts a new distressed-area land assemblage tax credit, enacts a new tax credit for sales of beef from cattle born in Missouri, authorizes a tax credit for qualified equity investments in qualified community development entities, lowers eligibility requirements for film production tax credits and revises credit amounts, increases the annual tax credit cap and makes other changes relating to the enhanced enterprise zone tax credit, and expands definitions to make various tax credits available to tax-exempt charitable organizations.

CCH (cch.taxgroup.com) reports:

The IRS has announced that the interest rates for the calendar quarter beginning October 1, 2007, will remain at 8 percent for overpayments (7 percent in the case of a corporation), 8 percent for underpayments, and 10 percent for large corporate underpayments. The interest rate for the portion of a corporate overpayment exceeding $10,000 remains at 5.5 percent. The interest rates are computed by using the federal short-term rate based on daily compounding determined during July 2007.
Code Sec. 6621 provides that the rate of interest is to be determined on a quarterly basis. For taxpayers other than corporations, the overpayment and underpayment rate is the federal short-term rate plus three percentage points. Generally, in the case of a corporation, the underpayment rate is the federal short-term rate plus three percentage points, and the overpayment rate is the federal short-term rate plus two percentage points. The rate for large corporate underpayments is the federal short-term rate plus five percentage points. The rate on the portion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the federal short-term rate plus one-half of a percentage point.
IR-2007-154, 2007FED ¶46,617
Rev. Rul. 2007-56, 2007FED ¶46,618
Rev. Rul. 2007-56, ETR ¶66,836
Rev. Rul. 2007-56, FINH ¶30,561
Other References:
Code Sec. 6601
CCH Reference - 2007FED ¶174.01
CCH Reference - 2007FED ¶175.01
CCH Reference - 2007FED ¶175.30
CCH Reference - ETR ¶102
CCH Reference - ETR ¶50,615.01
Code Sec. 6621
CCH Reference - 2007FED ¶39,455.01
CCH Reference - 2007FED ¶39,455.51
CCH Reference - FINH ¶21,685.01
CCH Reference - FINH ¶21,685.30
Code Sec. 6622
CCH Reference - 2007FED ¶39,465.01
Tax Research Consultant
CCH Reference - TRC ACCTNG: 33,204.15
CCH Reference - TRC PENALTY: 9,152

CCH (cch.taxgroup.com) reports:

In an overview of the Senate's ambitious fall legislative schedule, Senate Minority Leader Mitch McConnell, R-Ky., told reporters that renewing some 40 expiring tax provisions and providing another year of relief for middle-income taxpayers from the alternative minimum tax (AMT) is "fundamental" legislation that must be completed by the end of 2007.
Senate Majority Leader Harry Reid, D-Nev., however, who also gave the customary fall legislative agenda speech upon Congress's return from its summer recess on September 4, made no reference to tax legislation.
The tax provisions McConnell referenced are the temporary, more narrowly targeted temporary tax benefits --sometimes called the "extenders." The Senate on December 9, 2005, approved an extenders bill (HR 6111) that had been passed by the House on December 8 of that year. The bill was estimated to reduce tax revenue by $38.1 billion over five years and $45.1 billion over 10 years. It was signed into law as the Tax Relief and Health Care Act of 2006 (P.L.109-432).
The following are some of the temporary provisions extended by the Act; the extensions expire at the end of 2007:
--deduction of tuition;
--the new markets tax credit;
--deduction of state and local sales taxes;
--the research and experimentation tax credit;
--the work opportunity and welfare-to-work tax credits (combined);
--the earned income tax credit treatment of combat pay;
--qualified zone academy bonds;
--deduction of teacher expenses;
--expensing of brownfields costs;
--D.C. investment incentives;
--the Indian employment credit;
--depreciation on Indian reservations;
--leasehold depreciation; and
--rum excise cover-over to Puerto Rico and Virgin Islands.
By Jeff Carlson, CCH News Staff
 

Tax Analysts report: