Tax Roundup, 3/21/16: Governor to sign… Dixie Cornell Gebhardt Week Proclamation! (Update– coupling signed!)

March 21st, 2016 by Joe Kristan

couplingNo sign yet. The Governor is back from his spring break, but nothing on the legislature’s web site indicates that he has signed HF 2433, the extender bill coupling Iowa to most 2015 federal tax law changes, including the Section 179 deduction. Meanwhile, it’s March 21 and we don’t know Iowa’s 2015 tax law yet. There’s nothing about signing the bill on the Governor’s calendar or press release site.

The Governor is scheduled to sign the “Dixie Cornell Gebhardt Week proclamation” this afternoon.  Per Wikipedia, Dixie Cornell Gebhardt “was a leader of the Daughters of the American Revolution in Iowa during World War I, and was responsible for the design of the Iowa’s state flag.”

Maybe we’ll learn more at his 9:00 am press conference today.

 

Update, 6:15 pm. The bill has been signed. From the press release:

“I’m pleased that the Legislature was able to come together and reach a consensus on this bill.  I support coupling for one year and placing into Iowa Code an exemption for supplies consumed in manufacturing from the sales tax that will help Iowa taxpayers and businesses,” said Branstad.  “Although I am disappointed that the exemption does not go as far as the administrative rules that were passed through the Administrative Rules Review Committee earlier this year that dealt with advanced manufacturing, I’m proud to sign the bill that moves Iowa forward on both of these key issues.”

This completes the Governor’s reversal on the coupling issue. When the session started, the Governor’s budget provided for no coupling for Section 179 for 2015 — and no coupling for any of the other provisions extended by Congress in 2015, other than the research credit.

We can expect the Governor to oppose coupling for Sec. 179 next year. He has other priorities.

 

Update, 9:26 a.m. Kathie Obradovich tweets from the Governor’s Press Conference:

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Sooner is better Governor. It’s March 21, and the software companies all have to do an update after you sign.

 

Biology. The Senate last week passed yet another special interest tax credit, the “Renewable Chemical Production Tax Credit” (SF 2300). It flew through the Senate 46-3, and it is expected to pass the House easily.

One of the three “no” votes was from Ames Democrat Herman Quirmbach. He explained to the Ames Tribune:

“The new program narrowly targets a single industry. You hear often, especially from the Republican side, that we shouldn’t try to pick winners and losers, while this is trying to pick a winner and a loser,” Quirmbach said.

According to Quirmbach, there are only two possible outcomes if this bill is allowed to move forward.

“No. 1, the industry is going to be a success, maybe the boosters are right about how much income and wealth are going to be generated. In that case, why do they need a government handout? Or it’s going to be a failure. In that case, why do we want to flush taxpayer money down the drain,” Quirmbach said. “Either way, this is something the government shouldn’t be involved in. Markets are good at this, government is generally pretty bad this.”

This is exactly right. It’s worth noting that Sen. Quirmbach was one of only two senators to vote against the disastrous Iowa film tax credit program. I also note that all Republicans voted in favor of the vote, showing again the weakness of the Iowa GOP’s free-market inclinatations.

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Kristine Tidgren, Iowa Court Denies Adverse Possession Claim (Ag Docket). “Ambiguous wills often lead to unfortunate family disputes.”

Kay Bell, IRS 2016 refunds around same amount, at same pace. “Tax refunds in many states, however, are markedly slow in arriving.”

Jack Townsend, Eighth Circuit Affirms Adult Entertainer’s Conviction for Tax Perjury and Sentencing for Unreported Income for Sexual Services. More on the unfortunate Okobojian whose case we discussed Friday.

Leslie Book, Riley Out of Luck on Theft Loss Deductions (Procedurally Taxing). “The opinion also walks through the reasons why Riley was not entitled to either a nonbusiness bad loss deduction or a deduction for worthless securities.”

TaxGrrrl, Taxes From A To Z (2016): F Is For Filing Status

Robert Wood, Hulk Hogan Wins $115 Million Sex Tape Verdict Against Gawker, IRS Wins Too

 

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TaxProf, The IRS Scandal, Day 1045Day 1046Day 1047. Day 1046 features Robert Wood on the administration response: “Deny, stonewall, deny.”

Renu Zaretsky, Tax Reform Inch by Inch, Hearing by Hearing. Today’s TaxVox headline roundup covers upcoming tax reform hearings, Bernie Sanders complaining about a merger, and a tax-caused strike in india.

 

News from the Profession. H&R Block CEO Not Impressed With AICPA’s Letter, Vows More Ads (Caleb Newquist, Going Concern). I hope the new ads explain how they hire Washington insiders to suppress their smaller competitors.

 

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