Tax News

CCH (cch.taxgroup.com) reports:

  The New York City Department of Finance has issued a memorandum highlighting the substantial changes created by recently enacted legislation (Ch. 201 (A.B. 8867), Laws 2009), which include generally requiring related corporations with substantial intercorporate transactions to file a combined report, regardless of the transfer price for such intercorporate transactions, and phasing in a single sales factor for New York City general corporation tax and unincorporated business tax, as well as for certain taxpayers under the banking corporation tax. (TAXDAY, 2009/07/17, S.30)

 

CCH (cch.taxgroup.com) reports:

  The Hawaii Department of Taxation has issued an announcement discussing Act 196 (S.B. 1461), Laws 2009, which advanced general excise tax filing and payment due dates, expanded application of the semiweekly deposit schedule for withheld personal income taxes, authorized the director of taxation to impose additional electronic filing and electronic payment requirements, and extended the general excise tax exemption allowed to submanagers of condominium and homeowner associations and to hotel operators and suboperators. Details of the law were previously reported. (TAXDAY, 2009/07/20, S.8)

 

CCH (cch.taxgroup.com) reports:

  The California Commission on the 21st Century Economy held its sixth public meeting on July 16, 2009, in San Francisco. At the meeting, the Commission further discussed but did not reach a final decision on which tax reform proposals would be included in its package of recommendations that is scheduled to be delivered to Gov. Arnold Schwarzenegger and the Legislature by July 31, 2009.

  The 14-member bipartisan Commission has been meeting since January 2009 and is tasked with presenting a set of recommendations to reform the current California tax structure to stabilize state revenues and reduce volatility, increase the state's competitiveness, promote jobs and growth, and reflect the state's 21st century economy.

 

CCH (cch.taxgroup.com) reports:

  The IRS has provided a reminder to taxpayers of the various tax breaks made available by the American Recovery and Reinvestment Tax Act of 2009 (P.L. 111-5). In many cases, taxpayers must take action within the 2009 or 2010 calendar years in order to take advantage of the tax benefits.

  --The expanded $8,000 first-time homebuyer credit under Code Sec. 36 requires a home purchase before December 1, 2009.

  --The deduction for the local sales and excise taxes of qualified new vehicle purchases (up to $49,500 in cost) under Code Sec. 164 requires the purchase of the vehicle before January 1, 2010.

  --The 30-percent credit for energy-efficient home improvements under Code Sec. 25C applies to improvements placed into service in 2009 and 2010.

  --The expanded Hope scholarship credit under Code Sec. 25A, temporarily applicable to the first four years of college rather than only the first two, applies to tax years 2009 and 2010.

  --The expansion of education savings plans under Code Sec. 529 to allow for the purchase of computer technology, Internet access and related services applies to 2009 and 2010.

  --Finally, the making work pay credit under Code Sec. 36A provides taxpayers with lower withholding rates in 2009. However, families in which both spouses work or taxpayers with multiple jobs may need to adjust their withholding in order to avoid lower refunds or tax liabilities for 2009.

IR-2009-67,
2009FED ¶46,430

Other References:

 
Code Sec. 25A

  CCH Reference - 2009FED ¶3830.20

 
Code Sec. 25C

  CCH Reference - 2009FED ¶3843.10

 
Code Sec. 36

  CCH Reference - 2009FED ¶4190K.11

 
Code Sec. 36A

  CCH Reference - 2009FED ¶4195.11

 
Code Sec. 164

  CCH Reference - 2009FED ¶9502.35

  CCH Reference - 2009FED ¶9602.7244

  CCH Reference - 2009FED ¶9602.87

 
Code Sec. 529

  CCH Reference - 2009FED ¶22,945.30

  Tax Research Consultant

  CCH Reference - TRC INDIV: 45,104.15
CCH Reference - TRC INDIV: 57,800
CCH Reference - TRC INDIV: 57,950
CCH Reference - TRC INDIV: 58,050
CCH Reference - TRC INDIV: 60,152
CCH Reference - TRC INDIV: 60,204

 

CCH (cch.taxgroup.com) reports:

  A Congressional Budget Office (CBO) estimate that shows a $250-billion budget deficit under the Democratic health care reform bill does not take into account projected Medicare cost savings, according to House Ways and Means Chairman Charles B. Rangel, D-N.Y., who spoke on CBS News' "Face the Nation" on July 19. Rangel said that the more money lawmakers can cut out of Medicare, the less taxes will have to be raised under the America's Affordable Health Choices Bill of 2009 (HR 3200). The CBO did not score savings from fewer people getting sick or being admitted to the hospital because they receive preventive care, Rangel said. He added that the CBO is obviously using different assumptions that what Ways and Means and the White House are considering.

  Senate Finance Committee member Orrin G. Hatch, R-Utah, speaking on the same program, said that GOP lawmakers are not going to accept a Democratic proposal for a surtax on the wealthy. The Democratic bill will result in small business owners having a 45.7-percent tax rate --an amount that is higher than the corporate tax rate, he said.

  However, Rangel disputed that the small businesses would be hurt by taxes, since the legislation provides tax credits as well as exemptions for smaller firms. He said the bill represents a tax on less that 1 percent of the wealthiest people in America, not on small businesses. Hatch said the Senate Finance negotiations on the health care bill are working on the idea of Chairman Max Baucus, D-Mont., to tax health care benefits that cost over $25,000. Hatch said he does not support that plan, either.

  By Stephen K. Cooper, CCH News Staff

Congressional Budget Office Preliminary Analysis of Estimate of Effects on the Deficit and Effects of Key Provisions of HR 3200, America's Health Choices Act of 2009
 

CCH (cch.taxgroup.com) reports:

  President Obama on July 20 continued to make his case for health care reform in the face of growing criticism in Congress about its potential cost and how it would be paid for. Obama, in remarks at Children's Medical Center in Washington, D.C., maintained that the need for reform is "urgent and indisputable" and that it can be done in 2009 in a way that does not add to the deficit over the next decade.

  "The bill I sign must reflect my commitment and the commitment of Congress to slow the growth of health care costs over the long run. That's how we can ensure that health care reform strengthens our nation's fiscal health at the same time," he stated. In his remarks at the medical center, Obama criticized "health insurance companies and their executives" for reaping "windfall profits from a broken system" while premiums doubled and deductibles and out-of-pocket costs rose sharply over the past 10 years.

  Although there are calls to slow down the process, White House Press Secretary Robert Gibbs said the president believes the House and Senate can pass health care reform bills before the August recess. The president will continue his lobbying efforts throughout the week, including a town hall meeting in Cleveland, Ohio, on July 23 and an evening news conference on July 22.

  By Paula Cruickshank, CCH News Staff

Tax Analysts report: