States and local jurisdictions continue to grapple with novel tax issues in response to the COVID-19 outbreak. On Friday, March 27, 2020, President Trump signed into law the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”), a $2 trillion federal stimulus package to provide fiscal relief in response to the COVID-19 outbreak. The CARES Act includes numerous tax relief provisions. States will need to consider whether, and how, they will conform to the federal provisions.
On September 27, 2018, the New Jersey Senate and General Assembly passed legislation amending certain provisions of the New Jersey Corporation Business Tax (“CBT”) reform bill that was enacted earlier this year (“Technical Amendments”). In July, Governor Phil Murphy and the New Jersey Legislature enacted a $37.4 billion budget package (the “Budget Bill”) that implements sweeping changes to the CBT. Among these changes are mandatory unitary combined reporting, market-based sourcing, and a new four-year surtax on corporations with over $1 million of allocated taxable net income. The Technical Amendments, which are awaiting Governor Murphy’s signature, make several changes to the Budget Bill. A summary of the most noteworthy provisions contained in the Budget Bill and Technical Amendments is below.
On February 15, 2018, New York Governor Andrew M. Cuomo released 30-day amendments to the State’s FY 2019 Executive Budget. The amendments contain several noteworthy tax provisions that, if enacted, would amount to a sweeping overhaul to portions of the New York Tax Law and could benefit many New York taxpayers. Included in the amendments are provisions that would (1) create an optional employer compensation expense tax, (2) establish a state-run charitable trust fund for the benefit of New Yorkers, and (3) decouple from several Internal Revenue Code provisions. While a proposal to pursue an unincorporated business tax was included in the “Summary of Proposed Tax Reforms” released by the Governor’s office, details of the proposal were not included in the amendments. The revenue proposals contained in the 30-day amendments are largely intended to address the adverse impact of the individual $10,000 state and local tax (“SALT”) deduction cap that was enacted as part of the federal Tax Cuts and Jobs Act of 2017 (the “TCJA”).
On December 15, 2017, the conferees working on reconciling the differences between the House and Senate versions of the Tax Cuts and Jobs Act (“Tax Bill”) released legislative text and a Joint Explanatory Statement. It is expected that the Tax Bill will be passed and signed into law by President Trump. The Tax Bill contains numerous provisions impacting the personal income tax, the estate tax, the taxation of pass through entities, and the corporate income tax. This blog focuses on the U.S. state and local corporate income tax implications of the most significant aspects of the corporate income tax provisions of the Tax Bill.