Tax

A Texas state court judge in Travis County last week reversed a decision that could have cost state and local governments millions of dollars each year in lost sales tax revenues.

WASHINGTON — For the first time since before the recession, 29 states and the District of Columbia expect their fiscal year revenues to show modest surpluses, according to a new report.

States should consider adapting their tax and budget practices to avoid the deep bruising of downturns as their fortunes over the last decade have grown increasingly tied to economic cycles, the Federal Reserve Bank of Chicago recommends in a new report.

WASHINGTON — The National Association of Bond Lawyers is urging the Internal Revenue Service and the Treasury Department to update their rules and guidance on management contracts, which are key to making sure many governmental and 501(c)(3) bonds remain tax-exempt and are not private-activity bonds.

The Missouri House advanced a bill that would require greater public scrutiny of tax-exempt bond assistance being sought by private companies along with increased financial disclosure by such firms.

WASHINGTON — The Internal Revenue Service has notified the Cumberland County, Pa., Municipal Authority that $10 million of Series A revenue bonds it issued in February 2008 have been selected for examination.

Trustees of Pulaski Technical College voted last week to delay a property tax election until the measure can be the only tax item on the ballot.

The Glendale, Ariz., City Council is considering options for raising the city’s sales tax and property tax rates to cover an anticipated $35 million revenue shortfall in fiscal 2013.

The top Democrat on a House Ways and Means Committee panel said Build America Bonds are one of his top priorities for renewal as Congress examines more than 100 of the 2011 and 2012 tax extenders.

WASHINGTON — The Internal Revenue Service is looking into the tax compliance of $195 million of lease revenue bonds issued by the Pima County, Ariz., Industrial Development Authority in 2008 for a nonprofit borrower that used them to finance the development of a detention facility for Clark County, Nev.

Moody’s Investors Service said Tuesday a new voter-approved sales tax to support a struggling arena that has defaulted on notes is a credit positive for Wenatchee, Wash.

Senate Finance Committee chairman Max Baucus wants Congress to consider alternatives to tax-exempt bonds in order to provide uniform subsidies for bondholders, and cites Build America Bonds as a good example.

DALLAS — Colorado's Regional Transportation District will not seek voter approval of a sales tax increase in November that would allow completion of the FasTracks rail and bus system on its current schedule.

Rumblings heard from Washington recently regarding a threat to the tax-exempt status of municipal bonds don't seem to trouble retail investors, who have increased their purchases of munis this year, mostly through mutual funds.

Five groups representing local governments are urging Senate Finance Committee leaders to maintain the federal tax-exemption for municipal bonds, ensure states and localities retain the authority to set their own tax policies, and refrain from preempting governments and threatening their fiscal health by granting preferential tax treatment to certain industries.

WASHINGTON — The Internal Revenue Service is asking 111 issuers of qualified school construction bonds to respond to questionnaires requesting information about their compliance with tax law requirements.

A taxpayer with a marginal income tax rate of 7.5% would have been indifferent to purchasing high-rated tax-exempt or taxable corporate bonds last year because there was only a .35% spread between these bonds, a joint Congressional committee concluded in a report issued Monday.

Market participants are stepping up their efforts in support of muni-friendly provisions in the Senate highway bill, as that body prepares to head to conference with the House to resolve differences in legislation each chamber has passed providing funding for the nation's surface transportation programs.

WASHINGTON — State tax revenues at the end of last year rose for the first time above the peak levels at the beginning of the Great Recession after two straight years of growth, the Rockefeller Institute said in a report issued Thursday.

Speakers at a municipal analysts' conference here urged the muni bond community to educate lawmakers and regulators about the importance of tax-free financing, noting that few officials in Washington, D.C., understand the role muni bonds play in financing critical state and local infrastructure projects.