Some companies may need to revisit their estimates of TCJA tax charges. The Wall Street Journal explains (paywall) that US accounting rules require companies to immediately book the costs and benefits of tax law changes. But because the IRS and Treasury have not completed guidance for the Tax Cuts and Jobs Act, firms make have to revise their charges. Said Jeffrey LeSage at KPMG LLP: “As guidance comes out, [companies] need to go back and look at what they originally estimated and determine whether or not it’s accurate.”
No state tax conformity in Arizona, after all. Republican Governor Doug Ducey vetoed a GOP-backed bill that would have conformed the state’s tax code to federal changes and reduced income tax rates across the board by 0.11 percent. Without adjustments to state tax law, households face a $195 million tax increase and businesses will pay $40 million less. The stalemate leaves taxpayers uncertain about their 2018 state tax liability and the Department of Revenue will not revise tax forms until the issue is resolved.
What will happen with Virgina’s tax policy? Embattled Democratic Governor Ralph Northam remains under pressure to resign and his travails leave a political impasse in the GOP-controlled state legislature over tax policy. The Senate failed to pass emergency legislation that includes sweeping tax policy changes that Democrats oppose. The House of Delegates today will consider conforming the state’s tax code to the TCJA, but Democrats oppose it too. The state cannot process returns or issue refunds without resolving the conformity issues.
Foxconn will build a factory? After announcing it will not build a promised new manufacturing plant in Wisconsin, the Taiwanese company now says it will, following a “personal conversation” between its chairman and President Trump. Foxconn secured $3 billion in Wisconsin tax incentives in exchange for a promised 13,000 blue-collar jobs. Reports The Washington Post, “Foxconn declined to comment on how Friday’s decision was reached and when hiring is expected to begin.”
China continues to try to stimulate its economy. New tax relief went into effect January 1 that target university graduates, self-employed taxpayers, and those who have been unemployed for over six months. Eligible households can deduct about $1,780 annually for three years. Companies who hire those designated as “needy” can deduct about $890 per worker for each of three years.
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