SCOTUS Overturns Chevron, Lawmakers Seek Filing Simplification
New Supreme Court ruling could affect administration of tax laws. TPC’s Howard Gleckman discussesthe potential impact of the Supreme Court’s ruling in Loper Bright Enterprises v. Raimondo. The High Court rejected previous precedent established by the 1984 Chevron U.S.A., Inc. v. NRDC case, which directed courts to defer to federal agencies to interpret “ambiguous” statutes as long as interpretations are “reasonable.” The majority found Chevron to be “fundamentally misguided” and “unworkable.” What remains to be seen is how the ruling could hamper the ability of Treasury and the IRS to promulgate new rules and regulations.
A bill to simplify tax filing and payment processes. Rep. Darin LaHood (R-IL) has introduced the Tax Administration Simplification Act. The bipartisan legislation would apply the mailbox rule to electronically submitted documents and tax payments to the IRS, allow newly-formed small businesses to elect to be treated as an S Corporation on their first tax filing, and revise the estimated tax payment deadlines to fall on quarterly intervals instead of the current irregular payment schedule.
An IRS reminder: Marijuana is a Schedule I controlled substance until a final federal rule is published. The agency issued the reminder last week, noting that marijuana remains subject to the limitations of Section 280E of the Internal Revenue Code, which disallows all tax deductions or credits for businesses illegally trafficking in a Schedule I controlled substance. While the US Drug and Enforcement Administration will reclassify marijuana, it has not yet done so. Some taxpayers are nonetheless filing amended, though invalid, returns.
Speaking of cannabis… Maryland’s cannabis tax revenues for the first quarter of 2024 grew by less than 1 percent compared to the final quarter of 2023. Maryland levies a 9 percent sales tax on recreational cannabis products. It imposes no sales tax on medical purchases.
California’s Senate passed a bill to levy a digital tax to support the news industry. The legislation would impose a new tax on companies like Amazon, Meta, and Google for the data they collect from users. Revenue would from the so called “data extraction mitigation fee” would be offered as a tax credit for news organizations employing full-time journalists.
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