Tax

State and local governments may have lost a costly battle against federal preemption and any leverage they had over getting online sales tax legislation passed when Congress last week approved a permanent moratorium on state and local governments taxing Internet access.

Comprehensive or targeted reform of the federal tax code could significantly impact the revenues of most states, The Pew Charitable Trusts found in a report released Wednesday.

The Internal Revenue Service has announced how many qualified zone academy bonds can be issued in each state, the District of Columbia and U.S. territories in 2015 and 2016.

The Internal Revenue Service has dropped its audit of Alaska student loan bonds after concluding there were no tax violations warranting any change to the tax-exempt status of the bonds.

The Internal Revenue Service appears is stepping up its audit of $80 million of Arborwood Community Development District's 2006 bonds and appears to be focusing in part on the Florida CDD's board and land that may have been purchased at too high of a price.

The Internal Revenue Service and two community development districts in Florida have recently discussed a possible settlement over a long, ongoing municipal bond tax dispute, but it’s unclear if they will be able to agree on anything.

Congress must recognize that municipal bonds are critically important to financing state and local projects and must not do anything to raise their costs or threaten their use, Virginia Gov. Terry McAuliffe said Thursday on behalf of the nation’s governors.

Most states will be able to issue more private-activity bonds in 2016.

Congress will not act on comprehensive tax reform next year, but House Republicans could try to move forward with international or corporate tax reform, according to tax experts.

The biggest tax regulatory issue for municipal market participants in 2016 are the issue price rules and what changes the Treasury Department and Internal Revenue Service will make as they finalize them, dealer and issuer group representatives said in interviews about the coming year.

Lawmakers are considering a $1.15 trillion omnibus spending bill for fiscal year 2016 that does not extend bankruptcy protection to Puerto Rico, and a more than $621 billion tax bill that would make permanent or extend expired tax provisions, including a few that are bond- and Puerto Rico-related.

Bond Dealers of America is recommending the Treasury Department and Internal Revenue Service rework their issue price rules to state that if 25% of bonds are sold after a competitive underwriting at the initial offering price then that would establish the issue price for each maturity.

The federal revenue losses from tax-exempt public purpose bonds will total $187.7 billion for fiscal years 2015-2019, the Joint Committee on Taxation told House and Senate tax-writing and budget committees this week.

The costs of issuing, trading and managing portfolios of tax credit bonds would cause such securities to be unappealing both to issuers and investors.

The Internal Revenue Service told Woodland Hills School District in Allegheny County, Pa. that bonds it issued in 2005 and advance refunded in 2013 may violate tax requirements and be taxable.

Mobile, Ala., next week will file a protest and an appeal of the Internal Revenue Service’s proposed adverse determination that some general obligation refunding and improvement warrants it issued in 2006 are taxable.

New Ways and Means Committee chair Rep. Kevin Brady, R-Texas, said on Wednesday that he plans to solicit the views of House members on tax reform over the next few months.

The Internal Revenue Service has sent a final notice to the City of Scottsdale, Ariz., Municipal Property Corp. claiming that some of the $65 million of bonds issued in 2013 to refinance the initial term of a lease for a garage are taxable.

The Internal Revenue Service has issued guidance clarifying that state student loan programs can use tax-exempt bonds to fund parent loans for students and that tax-exempt bonds can be used for a broad range of refinancings that help student loan borrowers take advantage of lower rates.

The Internal Revenue Service’s tax-exempt bond office has told Mobile, Ala., that the general obligation refunding and improvement warrants it issued in 2006 are probably taxable.