Daily Tax Report: State

States, Cities Set for Deficit-Borrowing Spree After Big Tax Hit

New York Quickly Drops U.S. Virus Relief on Tax Write-Offs

Latest Stories

McConnell Moves on Quick Aid Vote While Pelosi Urges More Cash

Senate Majority Leader Mitch McConnell pressed ahead with his plan for a quick vote Thursday on a $250 billion boost in a small business aid program, putting him at odds with the two top Democrats in Congress who want to double the size of an interim stimulus package.

IRS May Soon Provide Refund Clarity to Virus-Hit Businesses (1)

The IRS may soon offer businesses filing instructions for claiming refunds after it scaled back operations at a major processing center—a step that could bring clarity for those trying to take advantage of perks in the new virus relief law.

New York Quickly Drops U.S. Virus Relief on Tax Write-Offs (2)

New York may be starting a trend, becoming the first state to decouple from a provision in the federal virus response package that temporarily relaxes limits on business interest payment deductions.

Colleges With Empty Campuses Face an Uncertain Financial Future (1)

The coronavirus pandemic threatens to remake U.S. higher education, speeding the closure of small, financially weak colleges and forcing others to make tough decisions about what they can afford. Even state schools may no longer be immune as tax revenue falls.

BGOV Closer Look: Congress Eyes More Coronavirus Relief

Lawmakers are moving to provide more relief from the coronavirus pandemic after enacting three packages in March.

Utah Sales Tax Deadlines Must Wait for Legislative Action (2)

Utah won’t alter its sales tax deadlines until the Legislature is able to discuss the crisis. Meanwhile, Nebraska continues to mull property-tax relief, and Illinois detailed plans to give distillers tax deductions on alcohol for making hand sanitizer. Here’s the latest on shifting state tax guidelines, deadlines, and policy to deal with the coronavirus pandemic. For Tuesday’s coverage click here. Here’s a state-by-state roadmap.

States, Cities Set for Deficit-Borrowing Spree After Big Tax Hit

America’s state and cities will likely need to sell billions of dollars of short-term debt to keep running as the fallout from the coronavirus deals a massive hit to tax collections.

Featured Topics

credits and incentives

Top Finance Democrat Pushes Expanded Rebates in Next Relief Bill

Opportunity Zone Investors Want Covid-19 Deadline Certainty (1)

U.S. Starts Employee Retention Credit for Virus-Hit Businesses

individual income tax

New York Quickly Drops U.S. Virus Relief on Tax Write-Offs (2)

Top Finance Democrat Pushes Expanded Rebates in Next Relief Bill

IRS Closures, Service Cutbacks Turn Tax Queries Into a Struggle (1)

sales and use tax

Colleges With Empty Campuses Face an Uncertain Financial Future (1)

States, Cities Set for Deficit-Borrowing Spree After Big Tax Hit

Missouri May Consider Remote Sales Tax Bill in Later Session

Washington DOR Issues Information on Sales, Excise Taxability of Alcohol Sold for Sanitizing Purposes

The Washington Department of Revenue (DOR) April 7 issued information of excise and sales and use taxability of alcohol sold for sanitizing purposes to hospitals and first responders. The DOR provided that: 1) spirits sales tax and spirits liter tax don’t apply to alcohol not sold as a beverage; 2) manufacturers of distilleries are allowed the Multiple Activities Tax Credit for the applicable selling business and occupation (B&O) tax against the Manufacturing B&O tax when the alcohol is sold in Washington; 3) alcohol sold to hospitals, clinics, and first responders for sanitizing purposes is generally subject to retail sales tax, with the tax rate determined by the location of receipt; 4) sales to a free hospital that doesn’t charge patients for the health care provided are exempt; and 5) bona fide donations of alcohol aren’t subject to the sales and B&O tax. [Wash. Dep’t of Revenue, Sales of Alcohol for Sanitizing Purposes, 04/07/20]

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Washington Appeals Board Sustains King County Assessor’s Property Tax Valuation of Taxpayer’s Apartment Building

The Washington Board of Tax Appeals (BTA) Feb. 14 sustained the King County Assessor’s property tax valuation of Taxpayer’s apartment building. The King County Board of Equalization sustained the assessor’s valuation and Taxpayer appealed. Both parties relied primarily on the income approach to value the property. The BTA found: 1) Taxpayer’s expense estimate wasn’t reliable because Taxpayer based its expense deduction on the property’s expenses when it was being repaired and renovated following a fire that disrupted its occupancy; 2) a prudent buyer, wouldn’t anticipate the fire repair expenditures; 3) annual expenses averaged well below both parties’ estimates and didn’t support net operating income below the assessor’s estimate; 4) The evidence didn’t clearly support a capitalization rate above the rate used by the assessor; and 5) the comparable sales in the record also supported the assessed value. Accordingly, the BTA sustained the assessor’s value. [Summerhill Place, LLC v. Wilson, Wash. B.T.A., No. 94832, 02/14/20]

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Washington Governor Signs Law Extending Electric Marine Battery Sales and Use Tax Incentive

The Washington Governor April 3 signed a law extending the electric marine battery incentive for sales and use tax purposes. The law includes measures: 1) extending to July 1, 2030, from July 1, 2025, the retail sales and use tax exemption for the sale and use of vessel electric propulsion systems; 2) expanding the exemption to include the sale of additional types of batteries; and 3) defining key terms for the exemption. The law takes effect July 1. [/WA\FINAL\2020R1HB2486///, enacted 04/03/20]

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Texas Comptroller Decides Sales and Use Taxpayer Didn’t Provide Exempt Improvements to Manufacturing Unit

The Texas Comptroller of Public Accounts Feb. 12 decided to adopt the Administrative Law Judge’s (ALJ) recommendation to adopt a sales and use tax assessment against Taxpayer. The Tax Division (staff) audited Taxpayer, an electrical contractor, and assessed tax, penalty, and interest. Taxpayer sought review, arguing that it provided exempt repairs to manufacturing equipment to increase capacity. The ALJ found: 1) they had no authority to order settlement; 2) Taxpayer didn’t provide clear and convincing evidence that it repaired exempt manufacturing equipment; 3) a retailer can only accept a blanket exemption certificate from purchasers who only purchase exempt items; 4) a blanket exemption certificate didn’t apply where Taxpayer sold taxable services to a customer; and 5) Taxpayer failed to prove that its sales were exempt as improvements to a manufacturing unit that increased capacity. Therefore, the comptroller adopted the ALJ’s recommendation. [Tex. Comptroller of Pub. Accts., Comptroller’s Dec., Hearing No. 116,013, Accession No. 202002032H, 02/12/20]

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Opportunity Zones: Will Tax Break for Investors Benefit Communities Too?

The 2017 tax overhaul included incentives to invest in distressed communities. Investors benefit from tax breaks and the designated opportunity zones benefit from economic investment, but critics say already-wealthy investors don’t need these breaks.