Tax

WASHINGTON - In some of its 32 Build America Bond audits, the Internal Revenue Service has raised concerns about whether premiums paid for bond insurance could disqualify the bonds as BABs and jeopardize the federal subsidy payments made to the issuers, according to bond lawyers and IRS officials.

Critics and supporters last week debated a proposed constitutional amendment to abolish property taxes in North Dakota. If approved, it would make the state the only one in the nation to repeal such taxes.

Former Oklahoma House Speaker Chris Benge told a legislative panel last week that the state should not eliminate its income tax without finding another revenue source.

WASHINGTON - The Municipal Securities Rulemaking Board has entered into a ground-breaking agreement with the Internal Revenue Service under which it will provide the IRS with municipal market data and documents to help enforce tax law requirements for muni securities.

All governmental funds tax collections for the first half of New York State’s 2011-12 fiscal year rose 12.6% from the same period last year, but were $391.9 million less than updated financial plan projections, according to the September 2011 cash report released by Comptroller Thomas DiNapoli.

WASHINGTON - The Internal Revenue Service plans to audit certain bond issues used by nonprofit organizations based on reviews of the bond-related information they file with the agency, IRS officials and tax lawyers said.

Proposals to limit the tax-exemption on municipal bonds get short shrift from the majority of market participants, but some state and local government experts on Tuesday seemed resigned to the notion that tax-reform efforts will inevitably do just that.

WASHINGTON - House Financial Services Committee Republicans are urging the joint supercommittee to significantly scale back the Dodd-Frank Act and its derivatives provisions, as well as reduce the size of the community development block grant program.

SAN ANTONIO - State and local governments must rally to defend the federal tax exemption for munis, a market expert warned Thursday, saying only they can persuade members of Congress about its importance.

WASHINGTON - House Democrats, in recommendations made to the joint deficit-reduction committee, have called for reinstating Build America Bonds, increasing funding for clean water state revolving funds, allowing the Bush income tax cuts to expire, and imposing a risk-based fee on big banks, securities firms and other financial companies.

WASHINGTON - The chairman of the House Transportation and Infrastructure Committee warned Wednesday that "a national infrastructure bank as proposed" in President Obama's jobs bill "is dead on arrival in the House of Representatives."

State and local government officials are applauding House Ways and Means Committee members on the eve of an expected vote to approve legislation that would repeal a 3% withholding requirement that they warn would be costly and burdensome.

DENVER - A dealer group said the issuer community must mobilize to defend the federal tax exemption for municipal securities, which has been called into question by recent Obama administration proposals.

SAN FRANCISCO - California has received a favorable private-letter ruling from the Internal Revenue Service that will allow it to remarket Build America Bonds this month while keeping the federal subsidy.

Senate Majority Leader Harry Reid, D-Nev., plans to seek a cloture vote Tuesday that would limit debate on a modified version of the jobs bill that was recently proposed by President Obama.

WASHINGTON - President Obama offered potentially good and bad news for the municipal market on Thursday.

CHICAGO - The Chicago City Council on Wednesday approved the sale of up $750 million of new-money and refunding debt in the city's first big bond issues proposed by new Mayor Rahm Emanuel, who also submitted an ordinance seeking to rescind the city's head tax.

Officials of the small town of Mesilla in Dona Ana County, N.M., are considering asking voters to increase the property tax next year to support general obligation bonds for the first time since the municipality was incorporated in 1959.

WASHINGTON — President Obama’s draft debt-reduction bill, if enacted, could destroy the tax-exempt bond market because of the uncertainty it would create about the value of tax-exempt interest for investors, said market participants, most of whom were aghast that the administration would even float such a plan.

CHICAGO - Gov. Rick Snyder is pushing a measure to eliminate or trim Michigan's personal property tax, which could pressure localities that rely on the money for operating costs and debt repayment, according to the Senate Fiscal Agency and local government proponents.