NEW INFORMATIONAL REPORT FOR CORPORATE TAXPAYERS
The North Carolina legislature is looking at potentially changing the way corporate taxpayers allocate income to North Carolina. The Revenue Laws Study Committee is looking at the revenue effect of changing the sales factor under current law to a market-based sourcing methodology. To assist the committee in measuring the revenue effect of market-based sourcing, every corporate taxpayer that has apportionable income greater than $10 million must file Form CD-400 with the state by April 15, 2016. There’s a $5,000 penalty if you miss this filing deadline!
REPAIR, MAINTENANCE, AND INSTALLATION CHARGES
The North Carolina Department of Revenue has issued three important notices regarding repair, maintenance, and installation charges. Effective March 1, 2016, the general NC sales tax rate will apply to the gross receipts derived from repair, maintenance, and installation services sold at retail. In addition, installation charges by a retailer for tangible personal property, certain digital property, and taxable services, are subject to the applicable sales and use tax rate for the item, even though the installation charges may be separately stated by the retailer. For sales prior to March 1, 2016, a sales and use tax exemption was provided for the separately stated portion of the sales price for installation charges on the invoice.
IRS Raises Tangible Property Expensing Threshold to $2,500
The IRS has announced an increase, from $500 to $2,500, in the de minimis safe harbor limit for taxpayers that don’t maintain an applicable financial statement (AFS). According to IRS, this change will simplify the paperwork and record keeping requirements for small business and other taxpayers.
2015 YEAR-END INDIVIDUAL INCOME TAX PLANNING
With the end of the year approaching, it’s time to once again review year-end tax planning strategies that could reduce your 2015 taxes. Year-end planning is particularly challenging this year because a host of popular individual tax breaks expired at the end of 2014. In previous years, Congress has retroactively extended the vast majority of these temporary tax breaks after they expired. However, as we complete this letter, Congress has not yet extended these tax provisions.
2015 YEAR-END CORPORATE/BUSINESS INCOME TAX PLANNING
It’s that time of year when businesses should consider year-end planning strategies. This task is particularly challenging for 2015 due to the long list of popular, temporary business tax breaks that expired at the end of 2014. In the past, Congress has retroactively extended the vast majority of these tax breaks after they expired. However, as we complete this letter, Congress has not passed legislation to extend the expired provisions.
Surface Transportation Act of 2015: Tax Provisions
An eleventh-hour temporary extension of federal highway and transportation spending is partially paid for by new tax compliance requirements. The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (H.R. 3236) was approved by the House, 385 to 34, on July 29, and the Senate on July 30, by a 91-4 margin.
Foreign Financial Account Reporting Due by June 30
AFFECTING Any United States persons with a financial interest in or signature authority over foreign bank and financial accounts (“FBARs”) with a total balance exceeding $10,000 at any time during the calendar year.
Trade Legislation Tax Provisions
Just before recessing for the Independence Day holiday, Congress passed two trade bills with important tax changes affecting individuals and businesses. The Bipartisan Congressional Trade Priorities and Accountability Act of 2015 (HR 2146) and the Trade Preferences Extension Act of 2015 (HR 1295) are expected to be signed into law by President Obama as soon as they reach the White House.
Important Supreme Court Decisions Affecting ACA and Same-Sex Marriage
The U.S. Supreme Court has handed down two much-anticipated decisions: one on the Affordable Care Act’s key provision, the Code Sec. 36B premium assistance tax credit; and another on same-sex marriage nationwide. In King v Burwell, SCt, June 25, 2015 (2015-1 ustc ¶50,356), the Court ruled 6 to 3 that the Code Sec. 36B credit is available to enrollees in both federally-facilitated and state-run Exchanges (currently commonly referred to as Marketplaces). In Obergefell v. Hodges, SCt, June 26, 2015 (2015-1 ustc ¶50,357), the Court ruled 5 to 4 that the Fourteenth Amendment requires a state to license a marriage between two people of the same sex and to recognize a marriage between two people of the same sex when a marriage was lawfully licensed and performed out of state. Both decisions have far-reaching tax consequences.
Guidance on Forthcoming Required Employer Notice on Health Care Coverage Options
The Employee Benefits Security Administration (EBSA) has issued guidance about the written notice that certain employers must provide to employees beginning in October on health care coverage options.
