Tax Break

Essential reading: States tinker with new road taxes, and more

June 4, 2012

Welcome to the top tax and accounting headlines from Reuters and other sources.

* States explore new ways to tax motorists for road repair. Larry Copeland and Paul Overberg – USA Today. States are looking for new ways of taxing motorists as they seek to pay for highway and bridge repairs and improvements without relying on the per-gallon gasoline tax widely viewed as all but obsolete. Among the leading ideas: Taxing drivers for how many miles they travel rather than how much gasoline they buy. Minnesota and Oregon already are testing technology to keep track of mileage. Other states, including Washington and Nevada, are preparing similar projects. Link

* Plan to tax soda gets a mixed reception. Patricia Leigh Brown – The New York Times. The city of Richmond, California, proposal for a one-cent-per-ounce tax on sugar-sweetened beverages, which is to appear on the November ballot, meets up against the hard realities of residents’ lives. It is the most visible West Coast municipal challenge yet to Big Soda, as advocates are fond of calling it. Link

* In California, furious fight over raising cigarette tax. Adam Nagourney – The New York Times. California has some of the toughest anti smoking laws in the country — it is illegal, in some places, to smoke in your own apartment — and boasts the second-lowest per capita smoking rate in the 50 states. But for all the disdain toward smoking here, it has been 14 years since California raised its cigarette tax, a tribute to the power of the tobacco industry here and the waning of this state’s anti tobacco dominance. That may be about to change. Link

* California disciplines accounting firm that missed Bell irregularities. Jeff Gottlieb – The Los Angeles Times. The state has reached a disciplinary settlement with the accounting firm that failed to detect financial irregularities in Bell despite money problems that pushed the city to the brink of insolvency and led to a public corruption scandal. Mayer Hoffman McCann must pay a $300,000 fine and as much as $50,000 for the cost of the investigation, according to the settlement with the California Board of Accountancy. Link

* Japan leader seeks opposition support on tax. Yuka Hayashi – The Wall Street Journal. Japanese Prime Minister Yoshihiko Noda, after failing to gain support from his chief rival in the ruling party, is preparing to start horse trading with opposition parties to pass legislation to raise the nation’s sales tax—a move that amplifies political uncertainty even as the country steps up efforts to put its fiscal house in order. Link

* A harsh lesson on charitable contributions. Amy Feldman – Reuters opinion. A California entrepreneur got a harsh lesson on the rules of charitable contributions this week when the U.S. Tax Court denied his $18.5 million deduction for real estate donations —not because he inflated their values, but because he didn’t follow the rules. The rules for charitable deductions have gotten tighter in recent years as the Treasury has looked to close the tax gap – the hundreds of billions of dollars difference between the taxes owed and those actually received. Link

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