Lunch Links: Philadelphia Soda Tax; Connecticut Tax Credit Evaluations; Trump Advisor on Charitable Deductions

June 14, 2016

Today is June 14, the anniversary of a Supreme Court decision upholding foreign tax liens. The Court upheld New York City’s decision to assess the portion of India’s mission to the United Nations dedicated to housing mission employees, and their action converting the amount owed into a tax lien on the building. It is also Donald Trump’s 70th birthday. Our analysis of Trump’s tax plan can be found here.

A few stories that came across my desk this morning:

  • Philadelphia Soda Tax Revenues Will Fund City Employee Benefits: Originally touted as a funding source for pre-K education, we now know that over half of the $91 million in projected annual revenue from the new Philadelphia soda tax will be put to other uses, some publicly touted prior to the vote (e.g., parks and recreation spending), and others newly disclosed (e.g., city employee benefits). Twenty percent of revenues were redirected in final negotiations with the city council. (Philadelphia Inquirer)
  • Regional Tax Authority Sought for Washington Metro System: The Metropolitan Washington Council of Governments plans to step up efforts to persuade the Virginia and Maryland legislatures to approve regional tax authority for the WMATA (D.C. Metro) system. Such a proposal can be expected to face stiff opposition, particularly as the Metro system continues to grapple with a series of very public crises. (Washington Post)
  • New Report Reviews California Tax Reform Options: The California State Controller’s Office has released a report on comprehensive tax reform options which outlines a range of possible reforms, with an emphasis on sales tax expansion to services, a reduction in individual income taxes, and a split-roll property tax system. The 84-page report does not make recommendations, but does note that a broad expansion to subject all services to the sales tax would raise about $120 billion annually, roughly equal to the size of the current state budget. (San Francisco Chronicle / California State Controller’s Office)
  • Trump Advisor Suggests Narrowing Charitable Deduction: Steve Moore, who is advising the Trump campaign and met with Donald Trump at Trump Tower last week to discuss tax issues, is floating the idea of narrowing charitable deductions to limit their applicability to nonprofits that can more strictly be classified as “charities.”
  • Severance Tax Refunds in Colorado: In Colorado, the legislature is advancing legislation to provide $115 million in severance tax refunds pursuant to a state supreme court ruling that the state had improperly calculated severance tax deductions available to energy companies. (Associated Press)
  • House Moves Forward with IRS Chief Censure Resolution: The House Oversight Committee is moving forward with a censure resolution aimed at IRS Commissioner John Koskinen, which committee chair Jason Chaffetz describes as a prelude, and not an alternative, to an impeachment vote. (Politico Morning Tax)
  • “Inadvertent” Tax Credit on the Way Out in Michigan: Michigan is on the verge of repealing an $80 million tax credit for auto insurers that legislators characterize as inadvertent. Due to a change in the administration of benefits for uninsured accident victims, Michigan insurers have been able to draw substantial credits since 2012. (Crain’s Detroit Business)
  • Connecticut Tax Credit Evaluation Bill Vetoed: Connecticut Governor Dan Malloy has vetoed a tax incentive evaluation bill that unanimously passed both chambers. Tax incentive evaluations are currently conducted by the state’s economic development office, within the Governor’s administration. In addition to requiring legislative hearings on tax incentives, the vetoed legislation would also have transferred oversight responsibility to an independent legislative agency. (State Tax Notes)
  • Christie Voices Opposition to Gas Tax Proposal: New Jersey Governor Chris Christie has expressed opposition to a legislative proposal to raise the state gas tax while phasing out the estate tax, though he has expressed openness to further negotiations on offsets. (Bloomberg News)

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