More Tax Plans, More Problems?


Digital tax plans are afoot in Europe. France will soon retroactively apply its 3 percent levy on companies that make at least $834 million in worldwide revenues from “digital activities,” including $28 million within France. The move prompted a tariff threat from President Trump. Other countries may be following suit. Italy’s 3 percent digital tax is scheduled to go into effect in January, 2021. The United Kingdom has proposed a 2 percent tax, and next month Austria’s lower house of parliament will vote on whether to levy a 5 percent tax on the online advertising revenues of tech firms. Are more US tariff threats on the horizon?

Kansas guidance on remote sellers could face a court challenge. Starting in October, Kansas will require online retailers to collect the state’s sales tax, but unlike most states it does not specify a minimum annual value or number of sales. TaxNotes explains that this could require firms with even one sale in Kansas to register and collect sales tax. That could  run afoul of the Supreme Court’s ruling in South Dakota v. Wayfair Inc. that encourages states to set minimum thresholds before requiring sales tax compliance. 

In Illinois: A task force will address property taxes. Democratic Governor JB Pritzker signed a bill Friday establishing a Property Tax Relief Task Force to address the state’s growing property tax burden. It will review the current system, study best practices in other states, and make short- and long-term recommendations by the end of this year.

Utah’s tax reform panel is ready to work. The state legislature’s tax reform task force finished a series of public meetings and now will consider changes to the state’s tax regime. That includes taxing services like ride-sharing or restoring the full state sales tax on food purchases. The group also may reconsider the constitutionally required earmark of income taxes for education. The state faces a structural revenue imbalance but the special panel was created after the legislature failed to pass tax hikes on its own. Lawmakers could call a special session of the legislature to consider the task force recommendations later this year.

Congress is in recess. The Daily Deduction will post on Mondays only until Congress returns. 

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