Tax

An economic slowdown partially fueled by tariff turmoil has forced West Coast states to lower revenue projections and slash budgets.

The Internal Revenue Service has been erroneously sending out notices to tax exempt bond holders informing them about incorrect signatures on their Form 8038s.

As the budget reconciliation lurches through Congress towards a vote, the cap on state and local taxes remains a key bargaining chip while data shows state tax revenue declining and an uncertain future for the pass-through-entity workarounds adopted by more than 30 states.

Some bills seeking to restrain local government debt issuance are still alive as the Texas Legislature's 2025 session heads towards its home stretch.

The macroeconomic boost from U.S.-China's 90-day pause on tariffs is partial and could prove temporary, S&P Global Ratings analysts said.

The committee may take the bill up again as soon as Monday.

The agreement includes $12.6 billion in spending for the fiscal year that begins July 1 and an income tax cut estimated to cost $160 million.

The muni market is recovering from tariff turmoil, and is more resilient than the day-to-day volatility suggests, Jamie Doffermyre of Truist Securities said.

The up to $385 million of sales and use tax revenue bonds will finance sewer projects to address sanitary system overflows under a federal consent decree.

Federal Reserve Vice Chair Philip Jefferson said in a speech Wednesday that elevated tariffs will likely lead to inflation, but time will tell how impactful that spike in prices might be.