According to a Tax Foundation article, on January 26th, a federal judge enjoined enforcement of a Colorado law that essentially places the burden of collecting state and local taxes for purchases made on online, on the online retailer. This legislation, which is often referred to as an “Amazon tax,” has been challenged on Constitutional grounds. The article states that Judge Robert E. Blackburn held that “the plaintiff has shown a substantial likelihood that it will succeed in showing that the act and the regulations are discriminatory because, in practical effect, they impose a burden on interstate commerce that is not imposed on in-state commerce.”
Currently, New York, North Carolina, and Rhode Island, have laws that requires retailers that have contracts with “affiliates”-independent persons within the state who post a link to an out-of-state business on their website and get a share of revenues from the out-of-state business-to collect the state’s sales and use tax. Other states are considering imposing similar Amazon tax laws.
According to an article from the Washington Post today, taxpayers spend 7.6 billion hours and nearly $140 Billion in order to comply with the Internal Revenue Code. This is reported a few days after the release of the President’s Economic Recovery Board’s report regarding the complexity of tax code. Evidence of the increased complexity of the code cited in the report is the enlargement of the Form 1040 (form used by individual taxpayers to file taxes) Instructions from 14 to pages to 44 pages and 15,000 changes to the code since 1986.
Trying to figure out what estate tax rates will apply next year is almost as frustrating for estate planners as it is for ESPN in trying to figure out whether Brett Favre will retire or not. Georgia estate planner John J. Scroggin took the uncertainty to another level. According to the Wall Street Journal’s Financial Adviser’s Blog, he asked a group of estate planners to place bets on how Congress would handle the estate tax. The Jackpot: $200. Scroggin thinks there are three possibilities for the estate tax. “The options are a 45% tax on estates over $2 million; a 60% tax on estates over $1 million; or 60% tax on estates over $2 million.”
Taxes take the top spot on the legislative agenda when Congress returns from its summer recess in September. Lawmakers have said they’ll take up legislation to provide a boost to small businesses and to extend some expiring (or expired) tax breaks. They’re also under pressure to reduce the budget deficit. It’s got to be paid for somehow.
Here is a link to a calculator created by the Tax Foundation which will compute your 2011 income taxes under three different scenarios: (1) If Congress allows all Bust tax cuts to expire; (2) Congress Acts to extend Bush tax cuts through 2011; and (3) Congress enacts tax laws as suggested in President Obama’s budget.
On Wednesday, the Senate approved legislation which allows home buyers (first-time home buyers and home buyers purchasing home for primary residence) that signed contracts by April 30 to close by September 30 in order to still be eligible for the tax credit. The tax credit is $8,000 for first time home buyers and $6,500 for home buyers purchasing a home as their new primary residence. Congress has sent the bill to President Obama.
Several key senators have been trying to cut a deal for months. Negotiations have stalled on more than one occasion.
“We’re almost half a year away from a tax policy that a super majority of senators say they don’t support. Yet, we’re stuck,” Sen. Charles Grassley, R-Iowa, said earlier this week. “This time-sensitive issue has taken a back seat to everything else.”
Anne Mathias, director of research at Concept Capital’s Washington Research Group, thinks it’s a fair bet to assume the new exemption level will fall somewhere between $3.5 million to $5 million.
But she also said if Republicans sweep the mid-term elections, and win at least 60 seats in the Senate, they may push to extend the repeal of the tax.
When Hartnett was asked what he thinks will happen with the estate tax next year, he gave the only answer he and his colleagues can give for many estate tax questions these days: “I don’t know.”
As part of an update on the Senate’s vote on an amended spending bill which includes the first time home-buyer credit closing date extension, the Wall Street Journal has reported that the extension passed in the Senate by an amendment 60-37:
Despite budget concerns, senators later approved an amendment 60-37 that would extend the time individuals have to qualify for a popular tax credit supporting home purchases. The credit is due to expire June 30. Under the amendment, pushed by Senate Majority Leader Harry Reid (D., Nev.), buyers would still have had to enter into purchase contracts by April 30 to qualify for the tax credit. But they would now be given until Sept. 30 to close the purchase.
Just before the next season of MTV’s The Jersey Shore premieres, one of the show’s cast member’s Snooki took some time to vent about the new federal health care law which imposes a tax on tanning beds. As reported by CNN’s Marquee Blog, Snooks, in the show’s 10 minute preview stated that,
“I don’t go tanning tanning anymore, because Obama put a 10 percent tax on tanning. I feel like he did that intentionally for us. McCain would never put a 10 percent tax on tanning. Because he’s pale and he would probably want to be tan.”
McCain responded via tweet “@Sn00ki u r right, I would never tax your tanning bed! Pres Obama’s tax/spend policy is quite The Situation but I do rec wearing sunscreen!”