In a much anticipated decision, the US Supreme Court in South Dakota v. Wayfair, Inc. declared, by the narrowest of margins, that a state may require an internet seller to collect sales and use taxes even if the seller lacks physical presence in the state seeking to impose the obligation to collect its tax. Wayfair is an important decision, though much of the popular reporting about it has been overstated.
Congress should extend two taxes to donor-advised funds which currently apply to private foundations. First, Congress should apply to donor-advised funds the federal tax on private foundations’ net investment incomes. Second, Congress should extend to donor-advised funds the federal penalty tax imposed upon a private foundation if it fails to pay out annually an amount of at least equal to five percent of its assets.
Congress added Section 4968 to the Internal Revenue Code in the comprehensive tax legislation adopted in December. Section 4968 imposes a tax on the investment incomes of some college and university endowments. Critics of Section 4968 disparage this new tax as selectively targeting what are widely perceived as wealthy, politically liberal institutions such as Harvard, Yale, Princeton, M.I.T., and Stanford.
hen is a property tax dispute between a church and a municipality an international controversy? When the church is the Church of the Holy Sepulchre and the municipality is the city of Jerusalem. The Church of the Holy Sepulchre is one of the holiest sites in Christianity. The Church takes its name from what is traditionally believed to be the tomb of Jesus located within the Church.
By deciding to review Wayfair v. South Dakota, the US Supreme Court has thrust itself into the long and contentious debate about the proper tax treatment of internet sales. As I argue, the Court should use this opportunity to overturn Quill v. North Dakota.
Paul Newman died in 2008, leaving behind a wonderful legacy of films and philanthropy. Of his many iconic movie roles, my favorite is Butch Cassidy. Unfortunately, Mr. Newman’s death in real life triggered a tax problem which now threatens his charitable bounty. Congress almost solved this problem in the new tax law passed in December 2017 but, at the last minute, failed to do so.
2018 will be an interesting year for those concerned about the intersection of taxation and religion. Two important issues – the constitutionality of the parsonage allowance and the future of the Johnson Amendment – are primed for further controversy in the year ahead. Several months ago, Judge Crabb agreed with the FFRF that Section 107(2) is unconstitutional.
The Johnson Amendment is the part of Internal Revenue Code Section 501(c)(3) which bans tax-exempt institutions from participating in political campaigns. The US House of Representatives has passed H.R.1, the Tax Cuts and Jobs Act, to revise the Code. Section 5201 of H.R. 1 would modify the Johnson Amendment. H.R. 1 gets three things right and wrong about the Johnson Amendment.
Under Internal Revenue Code Section 107(2), “ministers of the gospel” can exclude from the federal income tax cash payments from their congregations and other religious employers for such ministers’ housing. The IRS and the courts have held that this income tax exclusion applies to clergy of all religions including rabbis, cantors, and imams. Income tax-free housing payments to clergy are commonly denoted as “parsonage allowances.”
he Committee on Appropriations of the US House of Representatives, in a so-called rider to the pending federal budget bill, has proposed significant procedural restrictions on the IRS’s ability to enforce the Johnson Amendment. The Johnson Amendment is the provision of the Internal Revenue Code which prevents all tax-exempt institutions (including churches) from participating in political campaigns.
Religious entities pay more taxes than many people believe. Moreover, churches and other religious organizations are treated quite diversely by different taxes and by different states. Sometimes churches and other religious entities are taxed in the same fashion as secular organizations and persons are.
In ‘Quill Corporation v. North Dakota’, the US Supreme Court held that, under the dormant Commerce Clause of the US Constitution, the states cannot require out-of-state vendors to collect sales taxes because such vendors lack physical presence in the taxing state. As internet commerce has grown, Quill’s physical presence test has severely hampered the states’ ability to enforce their sales taxes since the states cannot obligate out-of-state internet firms to collect the taxes attributable to their respective sales.
Jeff Bezos, the billionaire founder of Amazon, has asked on Twitter for advice about the use of his fortune for philanthropy. My advice is that Mr. Bezos should pay some tax. Contemporary attention to philanthropy is largely attributable to the admirable work of Warren Buffett and Bill Gates, Jr. The Giving Pledge, Buffett and Gates have commendably encouraged rich individuals in the US and abroad to devote much of their wealth to charity.
The complex (and often tragic) saga of post-presidential retirements is well-known. Some presidents, such as Herbert Hoover, were independently-wealthy and thus spent their years after the White House in economic security. Other presidents, such as Woodrow Wilson, lived only briefly after their service in the Oval Office. Yet other former presidents experienced great financial difficulties in retirement.
The physical aftermath of Storm Stella is now over. The tax aftermath of Storm Stella, however, has just begun. How can a winter storm cause taxes? Because New York State, under its so-called “convenience of the employer” doctrine, subjects nonresidents to state income taxation on the days such nonresidents work at their out-of-state homes for their New York employers.
In the current, hyper-partisan environment, relatively few individuals publicly supported the confirmations to the US Supreme Court of both Justice Samuel A. Alito, Jr., and Justice Sonia Sotomayor. I know because I am one of these lonely souls. Now, the same considerations which led me to support their confirmations lead me to support the confirmation to the Court of Judge Neil Gorsuch.