Tax News

CCH (cch.taxgroup.com) reports:

  Both Houses of the New Jersey Legislature have passed legislation that would, if enacted, increase the gross (personal) income tax rate and reduce the property tax deduction for high-income taxpayers and tax New Jersey lottery winnings in excess of $10,000.

CCH (cch.taxgroup.com) reports:

  After the Kentucky Legislature adjourned from its regular session without a final agreement on an economic incentives package (TAXDAY, 2009/03/30, S.14) and finally reached consensus on a package during a special session (TAXDAY, 2009/06/25, S.7), Gov. Steve Beshear signed legislation that creates and amends numerous credits that may be claimed against the Kentucky corporation income tax, the limited liability entity tax (LLET) and the personal income tax. The legislation includes new and amended credits for investment, job training, job retention, employer-paid tuition, first-time new home purchases, small business development, the film industry, and alternative energy facilities. In addition, all military pay received by active duty members of the U.S. Armed Forces, reserve members, and National Guard members, including compensation for state active duty, may be excluded from personal income effective for taxable years beginning on or after January 1, 2010. Provisions of the legislation that provide sales and use tax incentives (TAXDAY, 2009/06/29, S.11) and a pari-mutuel tax exemption for certain horse racing events and a motor vehicle usage tax incentive (TAXDAY, 2009/06/29, S.13) are covered in other stories.

CCH (cch.taxgroup.com) reports:

  The Connecticut General Assembly has passed a biennial budget bill for the period beginning July 1, 2009, and ending June 30, 2011, that, if enacted, would increase personal income tax rates, impose a corporate tax surcharge, decouple from the federal domestic product activities deduction, increase cigarette taxes, enact an estate tax surcharge, create a new tire fee, and make various other changes to the Connecticut tax laws as described below. Unless otherwise noted, all changes would be effective July 1, 2009, and apply to income or tax years beginning on or after January 1, 2009.

  Gov. Jodi Rell has indicated that she will veto the bill. The General Assembly has, however, sent Gov. Rell a letter asking for her support for the bill. The letter, signed by the Speaker of the House (Christopher Donovan) and the Senate President Pro Tempore (Donald Williams, Jr,), states that if Gov. Rell intends to veto the legislation, the General Assembly requests immediate bi-partisan negotiations between the Executive and Legislative branches of government. The General Assembly also suggests Monday, June 29, 2009, at 11:00 a.m. in Capitol Room 410 as a possible first session of negotiations.

CCH (cch.taxgroup.com) reports:

  The House passed the American Clean Energy and Security Bill of 2009 (HR 2454), a comprehensive energy measure designed to combat global warming by capping the amount of greenhouse gas produced by American businesses and consumers. The measure, which passed by a vote of 219 to 212 on June 26, includes few tax provisions since House Ways and Means Committee Chairman Charles B. Rangel, D-N.Y., decided against convening his committee to make changes to the bill.

  The measure includes a provision to modify the earned income tax credit by increasing the phaseout amount from $5,280 to $11,640 for taxpayers without qualifying children, effective after December 31, 2011. That provision was included in a 310-page amendment that Democratic leaders added to the bill in the early hours of June 26. The bill also includes a provision to allow the Treasury to transfer money from the general fund to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund to offset any changes in benefit costs and tax revenues caused by the energy measure.

  House Minority Leader John Boehner, R-Ohio, criticized the legislation, saying it allows the federal government to impose new regulations and programs that will drive up the cost of gasoline, food and electricity. This over-intrusive energy measure would drive millions of jobs overseas to other countries that have less strict environmental regulations, he said. Rep. Earl Blumenauer, D-Ore., said the bill puts a mechanism in place to rein in global warming and create capital that can be invested in renewable energy sources from the wind and sun.

White House

  President Obama hailed House passage of the energy bill, saying it was a historic action that would create millions of new jobs, reduce U.S. dependence on foreign oil and limit the release of dangerous pollutants.

  By Stephen K. Cooper and Paula Cruickshank, CCH News Staff

Tax Section of Amendment to American Clean Energy and Security Act of 2009, HR 2454

Statement of Administration Policy on HR 2454

CCH (cch.taxgroup.com) reports:

  Charging that the Obama Administration's economic stimulus bill has done little to assist small businesses, Senate Finance Committee ranking member Charles E. Grassley, R-Iowa, on June 26 introduced legislation that he said would give those employers critical tax relief, allowing them to grow and create new jobs.

  "My bill will leave more money in the hands of small business owners so they can hire more workers, keep paying the salaries of their employees, and make additional investments that will lead to new jobs" Grassley said.

  Grassley's Small Business Tax Relief Act of 2009 includes provisions that would increase the expensing allowance from $250,000 to $500,000, allow more small C corporations to benefit from the lower tax rates for the smallest C corporations, take the general business credits out of the alternative minimum tax (AMT) for companies with $50 million or less in annual gross receipts, extend the one-year carryback for general business credits to a five-year carryback for small businesses, provide a 20-percent deduction for flow-through business income for small businesses, which are defined as flow-through entities with $50 million or less in annual gross receipts, lower the potential tax burden when a C corporation becomes an S corporation, and expand the net operating loss provision contained in the stimulus bill.

  By Jeff Carlson, CCH News Staff

Senate Finance Committee Release: Grassley Introduces Bill to Strengthen Job-Creating Abilities of Small Businesses