President Trump announces 25 percent tariff on imported autos. President Trump announced the new levy on finished imported cars and some car parts. Additional tariffs are expected to be announced next week. Reiterating a campaign promise, Trump also said he will push to make interest payments on auto loans tax deductible.
House Republicans aim to move first on tax bill details. As House Republicans attempt to finalize a major tax package, some lawmakers are pushing for the chamber to take the lead over the Senate, which is still considering changes to the House-passed budget resolution. Tax Notes reports members of the House Ways and Means Committee are working to align on cost estimates and top-line numbers while managing internal disagreements over how the bill should be scored. At issue is whether to use a current-policy baseline—which would assume existing tax breaks continue and therefore add no new costs—or a current-law baseline, which would show a higher on-paper cost. The House resolution allows for $4.5 trillion in tax cuts, but concerns about deficit growth and ideological differences within the GOP are complicating consensus. With only a slim Republican majority in the House, leadership is pushing to find common ground to move legislation forward ahead of the upcoming recess.
Trump signs order to digitize tax refunds and payments. President Trump has signed an executive order directing the Treasury Department to phase out paper checks for tax refunds and to accelerate efforts to move all federal tax-related payments online. The order sets a Sept. 30 deadline for ending paper disbursements, with limited exceptions for unbanked individuals, emergency cases, and national security concerns, according to Tax Notes Notes (paywall). Treasury Secretary Scott Bessent has 180 days to deliver an implementation plan.
Most Americans are open to using IRS Direct File. Interest is high in the IRS’s new free tax-filing tool, with about 73 percent of tax filers saying they would be somewhat or very interested in using Direct File if it were available to them. A new TPC fact sheet shows details the findings of a national survey on Direct File and what users are looking for in tax preparation software (ease of use and cost were cited as top priorities). Direct File was piloted in 12 states last year and is now expanding to 25 states. It allows eligible taxpayers to file federal and state returns (where available) online for free in either English or Spanish.
Federal pressure escalates in New York congestion pricing standoff. The Trump administration has warned New York Governor Kathy Hochul (D) that she has 30 days to shut down New York City’s congestion pricing program or risk losing federal transportation funds. Tax Notes details (paywall) how the US Department of Transportation revoked federal approval of the tolling plan in February, prompting a lawsuit from the Metropolitan Transportation Authority (MTA). Despite federal opposition, the MTA says the toll, which launched in January, is working as intended, reducing traffic and generating over $50 million in February alone. Officials estimate the program could bring in $500 million this year. Hochul has reiterated her support, with a spokesperson stating the system will stay in place.
South Carolina proposes flat tax to cut rates across the board. South Carolina lawmakers have introduced a bill that would replace the state's graduated income tax system with a flat rate of 3.99 percent starting in 2026. WLTX reports that the proposal, backed by Gov. Henry McMaster (R) and Republican leaders, would gradually lower the flat rate to 2.49 percent, aiming to cut more than $2 billion in taxes over time. Lawmakers say they will preserve tax breaks for military families and Social Security recipients and are exploring alternative revenue streams, including legal sports betting and medical marijuana.
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