November 20, 2020
Top 2020 Bank Tax Planning Strategies to Consider – Blake Crow & Paul Sirek, Eide Bailly. “Although immediate sweeping tax changes are not anticipated, a change in the White House provides an incentive for longer-term tax planning. In addition, having the ability to react and implement strategies in response to changing external factors, including the COVID-19 pandemic and its effect on your bank’s customers, needs to be a focus in coming weeks and months.”
Tax Pros Take Sides on Wisdom of Treasury’s Latest PPP Crackdown - Eric Yauch, Tax Notes($). "Practitioners were mostly frustrated with the latest round of guidance from Treasury on the deduction of expenses with tax-free coronavirus loans, and now the focus has shifted to quirks in its implementation."
Grassley, Wyden criticize Treasury guidance concerning PPP loans – Naomi Jagoda, The Hill. “Senate Finance Committee Chairman Chuck Grassley (R-Iowa) and ranking member Ron Wyden (D-Ore.) on Thursday criticized new Treasury Department guidance about the tax treatment of expenses related to Paycheck Protection Program (PPP) loans, asking the department to revisit its approach.”
"Grassley and Wyden said in their statement that the new guidance, along with the guidance issued earlier this year, goes against lawmakers' intention that small businesses receiving PPP loans be able to take deductions for ordinary and necessary business expenses.
“Regrettably, Treasury has now doubled down on its position in new guidance that increases the tax burden on small businesses by accelerating their tax liability, all at a time when many businesses continue to struggle and some are again beginning to close," the senators said. "Small businesses need help maintaining their cash flow, not more strains on it."
IRS commissioner: Penalty relief will not be 'blanket' – Paul Bonner, Journal of Accountancy. “The IRS’s response to the COVID-19 pandemic has included focused relief from tax penalties, but taxpayers and tax professionals should not expect a “blanket” approach, IRS Commissioner Charles Rettig told CPAs on Tuesday.”
Improving State Tax Collections Don’t Let Congress Off the Hook on COVID-19 Relief – Tracy Gordon, TaxVox. “While the elements of a smaller relief package this year remain a matter of debate, higher-than-expected state tax collections do not obviate the need for additional state and local fiscal relief.”
“Meanwhile, states and local governments must balance their budgets even as they still face plummeting tax revenues and rising costs for programs like Medicaid.
Balanced budget rules together with abrupt revenue losses in April and May caused states and localities to shed jobs (1.3 million since February) and cut services, causing hardship for residents and putting the national economic recovery at risk.
And the problem is expected to get worse because state tax collections lag economic activity and due to rising costs of the “third wave” in COVID cases and hospitalizations.”
Louisiana holds state sales tax holiday Friday and Saturday – AP News. “Louisiana’s state sales tax won’t be charged on most purchases Friday and Saturday, under a one-time sales tax holiday aimed to help people struggling with the coronavirus pandemic and recovering from hurricanes Laura and Delta.”
Mississippi governor proposes phasing out state income tax – Emily Wagster Pettus, AP News. “Mississippi Gov. Tate Reeves said Monday that the state should phase out its individual income tax by 2030 to attract new residents and businesses that could boost economic growth.”
New Taxes Your Business Should Be Aware Of – Steve Forbes, Forbes. “GOP control of the Senate will prevent big tax increases from coming out of Washington. But this episode of What’s Ahead warns that state and local governments are ravenous for revenue.”
America Taxed Your Favorite Bordeaux? Try One With More Alcohol. – WSJ ($), Josh Zumbrun.
“Wine investor Tom Gearing was intrigued by a French vintner’s offer of a 2019 Cabernet-Merlot blend rich with aromas of cinnamon and jasmine and what the vintner called “a dazzling expression of the estate’s terroir.”
Even more alluring was its alcohol content: 14.02%.
That two-hundredths of 1% meant Mr. Gearing could sell the big red from Château Cos D’Estournel in Bordeaux to Americans for the vintner’s recommended $153 price instead of $191. That’s because of a quirk in U.S. tariff code that has sent high-alcohol European wine exports soaring.”
This is a roundup of tax news and opinion. Any opinions expressed or implied are those of the author and not necessarily those of Eide Bailly. Opinions found in linked items are those of the authors of the linked item, not of your bloggers or of Eide Bailly. “$” means link may be behind a paywall. Items here do not constitute tax advice.