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New Tax Laws, New Tax Cuts, And More Tax Revenues

GAO: National e-commerce sales tax legislation needed. The Government Accountability Office issued a new report that recommends standardized sales taxes rules for e-commerce businesses that operate across state lines. Now, retailers operate under a “complex patchwork” of state rules in the wake of the US Supreme Court’s 2018 Wayfair decision. The GAO recommends Congress enact national laws that treat e-commerce businesses fairly across state lines. 

IRS still processing millions of 2021 returns. IRS Taxpayer Advocate Erin Collins, speaking at TPC panel on new agency funding, estimates that 2.3 million 1040s and more than 4 million business returns remain in the pipeline. Most are paper returns. On the same program, three former IRS commissioners urged the agency to be fully transparent about its plans for spending $80 billion in new funding Congress approved this year.   

Tax cuts are on deck in Montana. Republican Gov. Greg Gianforte will propose a budget with an expected $1.7 billion surplus and $1 billion in income and property tax cuts. He’s expected to propose a cut in the top income tax rate, an annual $1,200 child tax credit for families with children under age 5, a $5,000 tax credit for families who adopt children, and a higher cap on state tax credits for families who send their children to private schools.

South Carolina’s 2022 tax rebates are on the way. The Department of Revenue has begun issuing individual income tax rebates. Filers who submitted their 2021 return by October 17 should get their money by the end of the year. 

Georgia says Uber owes millions in unpaid sales tax. The state’s tax tribunal concluded  Uber’s safe rides fee is taxable income, reports TaxNotes (paywall). That means Uber owes Georgia $8,926,728 in back sales tax since it began charging the fee in April 2014.  

Local Virginia governments hit the tax jackpot thanks to temporary casinos. Before the Hard Rock casino opens in Bristol, the town of 17,000 was allowed to open a temporary casino that has generated $2.4 million in taxes since July. The revenue will be used by12 counties and two cities in southwestern Virginia to support education, transportation, and public safety. Danville, with a population of about 42,000, will get a temporary casino in 2023 before a Caesars Virginia opens there in 2024. Virginia approved four casinos that are expected to generate $181 million in gaming taxes in their first year of operation. 

UK Finance Minister Hunt: Everyone will pay more tax. The Conservative government will announce a new budget on Thursday, and Chancellor Jeremy Hunt says, “I’ve been explicit that taxes are going to go up.” He told the BBC that he knows the plans will “disappoint” people, but he promises to protect the “most vulnerable.” The opposition Labour party accused the government, now led by Prime Minister Rishi Sunak, of making a “total mess” of the economy. The Tories had to scrap a mini-budget proposed a few months ago by now-deposed PM Liz Truss. 

 

For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].

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