Fifth Circuit affirms ACA’s individual mandate is no longer a tax. The appellate court ruled yesterday in Texas v. United States that the Affordable Care Act’s "individual mandate is unconstitutional because it can no longer be read as a tax, and there is no other constitutional provision that justifies this exercise of congressional power.” Last year a Texas federal court ruled that since the Tax Cuts and Jobs Act zeroed out the individual mandate penalty, the penalty stopped functioning as a tax.
House Ways & Means Committee to appeal federal district ruling on President Trump’s New York State tax returns. In response to President Trump’s lawsuit against the tax writing panel, a federal district judge ruled last month that Trump could have “very limited relief” from Ways & Means’ request for his state tax returns from the New York state. The judge ruled that the panel had to give notice if they request the returns, and could not receive any requested state tax returns for 14 days. The House Ways & Committee’s attorneys will appeal the ruling to the US Court of Appeals for the DC Circuit.
California’s Legislative Analyst Office: Change state tax structure for marijuana. The nonpartisan organization, in its report released this week, recommends that lawmakers tax cannabis at different rates based on its potency. It also suggests that California stop taxing licensed cultivators based on the weight of marijuana they grow. The report concludes that a modified tax structure would generate stable revenue and discourage abuse of the substance. The Legislative Analyst Office does not explicitly recommend, however, a cut to the state’s 15 percent tax rate on cannabis.
Washington State takes another step toward a per-mile tax. The state’s transportation commission approved a set of recommendations this week and will send them to the state legislature, Governor Jay Inslee, and the Federal Highway Commission by January 13. The commission suggests how the state could transition from a gasoline tax to a per-mile, or road usage charge, namely: Slowly and gradually. Such a tax is years away, and in the meantime, policymakers will need to resolve key issues including how the state would spend revenue from a per-mile tax.
A hedge fund’s no-fee policy may prove costly to its employees. The Wall Street Journal reports on Renaissance Technologies LLC, which has produced the greatest investment returns of any hedge fund. But last week, Renaissance had to write its current and past employees with a warning. They may owe back taxes and penalties because when they invested in Renaissance hedge funds through the firm’s 401(k) plan and individual retirement accounts, they paid no fees. Renaissance thinks the IRS could find that foregone fees should count as taxable income and as contributions beyond the annual limits. This could apply to other investment firms with similar plans.
IRS seeks applications for 2020 Electronic Tax Administration Advisory Committee. The Internal Revenue Service is seeking 10 qualified applicants for nomination to the Electronic Tax Administration Advisory Committee (ETAAC). The ETAAC is an organized public forum for discussion of electronic tax administration issues, such as prevention of identity theft and refund fraud in support of the overriding goal that paperless filing should be the preferred and most convenient method of filing tax and information returns. The IRS will accept applications through February 14, 2020. The ETAAC application is here and more information is available at the Internal Revenue Service.
For the latest tax news, subscribe to the Tax Policy Center’s Daily Deduction. Sign up here to have it delivered to your inbox weekdays at 8:00 am (Mondays only when Congress is in recess). We welcome tips on new research or other news. Email Renu Zaretsky at [email protected].
