Tax News

CCH (cch.taxgroup.com) reports:

  For purposes of the Oregon corporate excise (income), personal income, and certain property tax laws, Oregon generally conforms to the Internal Revenue Code (IRC) as amended and in effect on May 1, 2009 (formerly, December 31, 2008). Thus, except for specific decoupling provisions, Oregon now conforms to the IRC as amended by the federal American Recovery and Reinvestment Act of 2009 (Recovery Act). As previously reported (TAXDAY, 2009/2/18, S.11), Oregon decoupled from the Recovery Act earlier this year. Oregon requires an addition to federal taxable or adjusted gross income for differences between federal and state law resulting from bonus depreciation under IRC §168(k), asset expense election limitations under IRC §179, and income from the discharge of indebtedness under IRC §108. For Oregon income tax purposes, taxpayers must use the amounts allowed under the IRC as in effect on December 31, 2008, prior to any changes made by the Recovery Act. For tax years beginning after 2010, Oregon will conform to the IRC as amended and in effect on May 1, 2009, or if related to the definition of taxable income, as applicable to the tax year of the taxpayer.

CCH (cch.taxgroup.com) reports:

  A Louisiana sales and use tax exemption is enacted for the amount paid by qualifying radiation therapy treatment centers for the purchase, lease, or repair of capital equipment and software used to operate such equipment. Political subdivisions of the state, including parishes and municipalities, are authorized to elect to grant the same exemption. "Capital equipment" is defined as tangible personal property eligible for depreciation for federal income tax purposes that is used in the diagnosis or treatment of cancer patients. Capital equipment includes linear accelerators, PET/CT scanners, imaging devices, and software necessary to operate such equipment. For purposes of the Biomedical Research Foundation in Shreveport, the term is defined as a PET/CT scanner and related equipment for medical diagnosis and the installation of such equipment. A "qualifying radiation therapy center" is defined as a radiation therapy center that is also a nonprofit organization that maintains joint accreditation with a state university by the Commission on Accreditation of Medical Physics Educational Programs, Inc. (CAMPEP) for a graduate medical physics program and that provides facilities and personnel for use for a joint CAMPEP-accredited graduate medical physics program for research, teaching, and clinical training for graduate students. In addition, such a center includes the Biomedical Research Foundation. An exemption certificate must be obtained from the Secretary of the Louisiana Department of Revenue in order for a radiation therapy center to qualify for the exemption.

Act 462 (H.B. 734), Laws 2009, effective July 1, 2009
 

CCH (cch.taxgroup.com) reports:

  The California Franchise Tax Board (FT has announced that it is sending more than 140,000 audit letters to pre-selected individuals who used the head of household (HOH) filing status on their 2008 personal income tax returns. The FTB advises taxpayers who receive an audit letter to promptly submit a completed questionnaire by any of these methods:

  -- go to the FTB's Web site at
http://ftb.ca.gov and use the HOH Audit Letter Web Response page (taxpayers will need their Social Security number and the FTB ID number listed at the top of the questionnaire letter);

  -- fax pages 3 and 4, and any supporting information, to (866) 223-8195; or

  -- mail the questionnaire using the pre-addressed envelope provided with the audit letter.

  Failure to respond could result in a penalty. The FTB provides an HOH self-test, answers to many frequently asked questions, and Publication 1540, CA Head of Household Filing Status, in English and Spanish on its Web site at
http://ftb.ca.gov.

  The HOH filing status generally provides a lower tax assessment for unmarried taxpayers who cared for a dependent for over half the year and paid more than half the cost of maintaining their home. Taxpayers who do not qualify for HOH filing status will have their tax reassessed using either the single or married-filing-separate filing status.

  The FTB notes that filing status mistakes are some of the more common errors on tax returns. Filing status errors are less common on electronically-filed returns, as the state's e-file programs and many other software-based tax preparation programs include a head of household questionnaire that guides taxpayers toward the correct filing status.

News Release , California Franchise Tax Board, August 6, 2009
 

CCH (cch.taxgroup.com) reports:

  The Senate on August 6 approved a bill (HR 3435) that would provide an additional $2 billion for the Cash for Clunkers program that gives consumers a cash incentive to trade in old vehicles for new, higher fuel-efficient models. The measure was approved 60-to-37 and came after lawmakers defeated six amendments that would have altered the original House-passed-version and likely delayed final action until Congress returned from its summer recess in September.

  "We have a choice before us. We're either going to have an extension of the Cash for Clunkers program with a passage of the House bill without any changes in it, or it is going to die," said Sen. Carl Levin, D-Mich., as the Senate prepared to vote on amendments.

  The widely popular program began running out of funds less than a week after it began, prompting the White House and Congress to seek additional funding. The House on July 31 immediately passed a bill providing an additional $2 billion to keep the program running (TAXDAY, 2009/08/03, C.1), but it was uncertain whether the Senate would follow suit before recessing for four weeks. Some senators had objected to more government spending at a time of record federal deficits, while others wanted assurances that Congress would find other means to finance the program instead of using funds earmarked for a clean energy loan guarantee program included in the American Recovery and Reinvestment Act of 2009 (P.L. 111-5). President Obama is expected to sign the measure quickly in order to keep the program running without interruption.

  The initial Cash-for-Clunkers legislation provided $1 billion in tax-free vouchers to automobile dealers who participated in the program. The program vouchers, worth $3,500 or $4,500, are given to dealers when consumers trade in old vehicles for ones with higher fuel efficiency. The vouchers are considered taxable income for the car buyer. Lawmakers created the Cash-for-Clunkers program as part of the Consumer Assistance to Recycle and Save Act of 2009 (CARS Act) (P.L. 111-32) (TAXDAY, 2009/06/25, W.1).

  By Jeff Carlson, CCH News Staff

Tax Analysts report: