Welcome to the IMA Tax Policy Blog. The blog format reflects our efforts to provide IMA members with timely, relevant and thought provoking information in a form that is accessible for easy reference. IMA’s Tax Policy Blog will be updated on a regular basis. Weekly news update emails will be sent out to notify subscribers of new information posted on the blog. IMA members are welcome to submit material for the blog, or request specific information. Simply email Editor Stefany Henson at shenson@ima-net.org with your information or request. Editorial submissions are subject to review. 

Wednesday
Aug132014

Time for a Permanent Vacation from Sales Tax Holidays

Temporary Rollbacks Are Poor Substitutes for Real Reform

Starting last weekend (August 1st), many states began their annual sales tax holidays. However, these temporary rollbacks of sales taxes—despite being sold as a boon for consumers and businesses—actually impose significant costs on both groups without yielding significant benefits, according to a new report by the nonpartisan Tax Foundation. These holidays—whether school supplies, disaster readiness, or hunting supplies—are costly and misguided substitutes for substantive reform of a state’s sales tax structure.

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Wednesday
Aug062014

IRS releases draft tax forms for ACA reporting requirements

From IMA member Associated Financial Group …

The Affordable Care Act (ACA) added two new tax reporting requirements related to the individual mandate (requiring that all Americans have health insurance or pay a tax penalty) and the employer “play or pay” penalties (requiring that certain large employers offer affordable health coverage to their employees or pay a penalty).

§6055 requires insurance companies (in the case of fully insured plans) and employers (in the case of self-funded plans) to report the identity of all individuals enrolled in their health plan(s).

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Wednesday
Aug062014

Final regulations clarify definition of research and experimentation expenditures

From IMA member McGladrey …

The IRS recently issued final regulations clarifying certain aspects of the tax treatment of research and experimentation (R&E) expenditures. The regulations further define activities whose associated costs qualify as deductible R&E. Additionally these final regulations have implications for the “uncertainty test,” one of four general requirements to qualify activities for the research tax credit. The regulations provide important clarification in several areas that were ambiguous under prior guidance:

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Wednesday
Jul302014

Twelve state tax complexities that create opportunity

From IMA member McGladrey …

STATE AND LOCAL TAX WEBCAST | Thursday, Aug. 7, 2014 | 12:00–1:00 p.m. CDT

Join McGladrey Thursday, Aug. 7, 2014, for a webcast to discuss 12 complexities related to state tax compliance and how they can be turned into opportunity for future value.

The 60-minute webcast will cover:

Common factors influencing the state tax compliance process

12 areas of complexity that can create risk and opportunity for businesses

How to use a reverse income tax audit to generate value through refunds and risk mitigation

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Wednesday
Jul302014

Unintended Consequences of Tobacco Taxes

The U.S. Senate held a hearing this week entitled, “Tobacco: Taxes Owed, Avoided, and Evaded.” In testimony before the Senate Finance Committee, Scott Drenkard of the Tax Foundation described how tobacco taxes have led to smuggling. A number of states have levied high taxes on cigarettes. Today, tobacco taxes are the highest that they have been in U.S. history. While the federal tax rate on cigarettes is $1.0066 per pack, state and local taxes can add several more dollars to the price, with taxes reaching $6.16 per pack in Chicago, Illinois. The high tax burden has not been without consequences. Cigarettes from low-tax states have been smuggled into high-tax states at such a rate that a majority (56.9 percent) of the cigarettes consumed in the state of New York are actually smuggled in from other jurisdictions.

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