By Holly I. Unck Esq., Senior Managing Consultant, Phoenix
In April, both Missouri (Senate Bill 149) and North Dakota (House Bill 1089) enacted legislation creating sales and use tax exemptions for new and expanding data storage centers. According to CPA Practice Advisor, Missouri S.B. 149 provides several state and local sales and use tax exemption for machinery, equipment, computers, electrical energy, gas, water, and other utilities, including telecommunication and Internet services, for new or expanding data centers. Purchases of tangible personal property for the construction of a new data storage center facility are also exempt. North Dakota HB 1089 provides a sales and use tax exemption for enterprise information technology equipment and computer software purchased for use by a qualifying business in a qualified data center. The exemption is also available to existing data centers that have undergone substantial refurbishment, with at least 16,000 square feet improved through methods including energy efficiency improvements, building improvements, and the installation of enterprise information technology equipment, environmental controls, and computer software.
By Holly I. Unck Esq., Senior Managing Consultant, Phoenix
In an effort to make Nevada more competitive with neighboring states, Senate and Assembly members held a joint committee hearing on SB93 and AB161, which would expand tax abatements to the aviation industry. The bills have bipartisan support, as the abatements would would quickly create hundreds of good-paying jobs and would bring Nevada in competition with 45 other states that offer abatements or exemptions. During the hearing, industry representatives said aviation companies have avoided doing repairs, expanding their business or headquartering their planes in Nevada because adjacent states offer better incentives.
In an effort to create a more open and fair process for Washington taxpayers disputing tax assessments, Sen. John Braun introduced Senate Bill 5449, which would establish an independent tax appeal forum within the state’s judicial branch. According to Forbes, the tax appeal division would be part of the Washington Court of Appeals and would replace the board of tax appeals. The tax appeal division would include a main department with judges, and a more informal commissioners’ department. Generally, independent tax tribunals are staffed by judges or administrative law judges who are knowledgeable on tax issues and write impartial opinions. It should lead to a more transparent tax system in which the state’s tax laws are more consistently applied and opinions are more readily published, providing accountability in ensuring that similarly situated taxpayers are being treated the same.
As Texas legislators begin their session next week, they will discuss what to do with the overflowing state coffers, which has as much as $9 billion to $12 billion extra, according to conservative estimates. Some Republican leaders have been pushing significant tax cuts, such as reducing the sales tax rate by 0.25 percent, cutting the franchise tax in half or repealing it completely, and decreasing the property tax rate for school levies by one-third. However, tax cut fever is starting to cool, as oil prices, which help drive much of the state revenue, continue to plunge.
Milwaukee-based Wisconsin Policy Research Institute (WPRI) recently released a study that found Wisconsin could boost its economy without bankrupting state government by cutting income and property taxes, while broadening its sales tax on consumer goods and services. The study says Wisconsin would "benefit long-term from lower taxes and a different tax mix. The path to prosperity, though, starts with lower income taxes and property taxes and recognition from legislators that the current sales tax structure can and should be broadened." While Gov. Scott Walker said he would review the study, he rejected broadening the state's sales tax the same day WPRI's study urged lawmakers to consider such a move to grow the economy.
The Colorado Legislature approved 11 bills in 2014 that would grant tax credits or incentives of various sorts to businesses, despite the Capitol avoiding any kind of "tax breaks" for many years. The bills were passed in hopes to boost Colorado's economy, improve the business climate and spur job growth. However, legislative leaders don't expect the trend to last, because this year's tax breaks will take a significant amount of money from the budget and they agree it's not sustainable to keep adding them.
As the national aerospace industry gets more and more competitive, Colorado lawmakers are considering tax breaks to keep up with other states. In an effort to help aerospace companies stay and grow in Colorado, House Bill 1178 (which cleared the finance committee last week) would give sales-and-use-tax exemptions for spaceflight property with minimal impact on Colorado's tax revenue. HB 1178 was introduced by House Speaker Mark Ferrandino (D-Denver) and House Minority Leader Brian DelGrosso (R-Loveland) because they believe Colorado has become uncompetitive, since several other states already have the tax incentives in place.
Due to more reductions in state aid to Maine cities and towns, municipal officials warn that it will result in skyrocketing property taxes and cuts to essential services. According to Bloomberg Businessweek, Republican Gov. Paul LePage's administration and business owners say the plan to pay for revenue sharing by cutting some tax incentive programs or dipping into the state's savings fund will hurt companies that are still struggling from the recession. Mayors, city council members and town managers are urging lawmakers to approve a measure that would prevent the reduction of $40 million in municipal aid next year — which is supposed to happen if lawmakers fail to agree on which tax breaks or cuts should be eliminated to find savings in the tax code.