Weekly Round-Up: Impact of Federal Tax Reform on the States

Highlights from the 12/18/17 through 12/22/17 issues of the Daily Tax Report: State :

  • Congress’ Change to Partnership Deduction Could Help States
    A deduction for partnerships, S corporations, and other pass-through entities featured in the GOP tax bill won't burden states as much as it could have, according to tax practitioners.
  • Federal Cap on State Tax Deduction Will Hit Illinois: Governor
    The $10,000 cap on the deduction for state and local taxes in the federal tax reform bill could be used to drive Illinois Gov. Bruce Rauner's (R) vision for lower property taxes and a rollback of the income tax hike enacted by state lawmakers over the summer.
  • Federal Tax Reform Could Damage NYC Transit System
    The U.S. tax reform bill passed by Congress will have a damaging effect on New York City's transit system, local transportation advocates said.
  • California, New York Could Recast Taxes as Charitable Gifts
    California, New York, and other high-tax states may recategorize taxes as charitable contributions as a way around the GOP's limit of a popular break.
  • State Practitioners Mulling Impact of Capped State Tax Break
    Congressional Republicans’ compromise agreement on the federal deduction for taxes paid to state and local governments hasn't resolved potential complications at the state and local level, according to several leading state and local tax practitioners.
  • Final Tax Bill Keeps Marriage Penalty, but Only for Top Earners
    The final tax bill retains the marriage penalty for the highest income earners—in a departure from earlier proposals from the House and Senate—while eliminating the penalty at lower income brackets.
  • Here's What's in the Final House-Senate Tax Bill
    Congressional Republicans released the conference committee report detailing specifics of the tax bill they hope to pass next week. The final bill comes after several weeks of negotiations between the House and the Senate and last-minute changes to raise more revenue to account for revisions needed to convince last-minute holdouts to back the legislation.

Some notable developments from the State Tax Developments Tracker —Bloomberg BNA’s tool for monitoring important developments in all the states:

  • Illinois Proposes New Rules on Partnerships' Personal Services Income
  • Georgia Provides Guidance on Income Tax Credits, Withholding
  • Massachusetts Proposes Amending Corporate Nexus Rule
  • New York Establishes First Home Savings Program

Get a free trial to Bloomberg BNA Tax & Accounting's State Tax solution , a comprehensive research service that provides deep analysis and time-saving practice tools to help practitioners make well-informed decisions.

In other developments …  

States Estimating Revenue Increases from Federal Tax Bill; Montana One Exception So Far by the Tax Foundation

Illinois Updates the Revised Uniform Unclaimed Property Act by PwC