- President Trump signed a memorandum directing the Treasury Secretary to use his authority to defer certain payroll tax obligations for the period of 1 September 2020 through 31 December 2020. A KPMG report provides initial impressions about what could be possible implications of a deferral of these taxes, a deferral that would be intended to provide economic relief in response to the COVID-19 pandemic.
- Updated FAQs under the Paycheck Protection Program (PPP) provide that: (1) payment (or nonpayment) of fees of an agent or third party is not material to Small Business Administration (SBA) guarantee of a PPP loan or SBA payment of fees to lenders; and (2) payment of required group health care benefits includes vision and dental benefits.
- User fees relating to certain requests for letter rulings and determination letters submitted to the IRS office of Employee Plans Rulings and Agreements will increase in four categories, effective 4 January 2021.
- The U.S. Court of Appeals for the Second Circuit affirmed a “reviewed opinion” of the U.S. Tax Court concluding that income that the taxpayers earned from selling gravel that was mined from Seneca Nation land was taxable income and was not excluded by treaty or by the General Allotment Act.
- The IRS reminded taxpayer-owners of heavy highway vehicles of the 31 August 2020 deadline for filing Form 2290, “Heavy Highway Vehicle Use Tax Return” and paying the related federal excise tax.
- Notice 2020-60 provides guidance regarding the election of alternative minimum funding standards for certain defined benefit pension plans of community newspapers.
- KPMG reports this week:
- Provide a detailed discussion of and observations about the final “global intangible low-taxed income” (GILTI) high-tax exception as well as the proposed high-tax exception
- Provide initial analysis of the proposed regulations under section 1061—the “carried interest” provision
- Describe the complexity of deposits of federal employment taxes for equity-related transactions
- Describe why there will be less time to deposit payroll taxes from stock options, restricted stock units and stock appreciation rights in the future
- Address new rules on advance payments when payments for future mineral production are subject to tax
State and local tax
- Tax authorities in California, South Carolina, and Tennessee released guidance to provide tax relief in response to the COVID-19 pandemic.
- Arizona’s Supreme Court held that “trip fees” imposed by the City of Phoenix on providers of commercial ground transportation with regard to carrying passengers to and from the Phoenix airport did not violate a provision of the Arizona Constitution.
- Maryland’s Tax Court held that an unauthorized insurance company subject to the Maryland premiums-receipt tax was exempt from corporate income tax on its non-premium income. Because the taxpayer did not earn any premiums during the tax years at issue, the exemption from all other state taxes was inapplicable.
- The U.S. Court of Appeals for the Third Circuit reversed the U.S. Tax Court, and held that a company’s receipt of economic incentives from the state of New Jersey was taxable and was not excluded from the taxpayer’s gross income as contributions to capital [the tax years at issue were prior to enactment of the 2017 U.S. tax law that modified IRC section 118 to require certain government contributions to corporations be included in gross income].
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