Shrinking Federal Revenues, A Digital Ad Tax In Place
The federal budget surplus for April shrunk by 43 percent from April 2022. That’s because of a drop in tax revenues, including lower transfers from the Federal Reserve, and bigger outlays on items, including interest on the national debt and Social Security. The drop in revenue makes it harder for Treasury to remain under the federal debt limit. The surplus for April was $176.2 billion, compared with $308.2 billion last year.
Maryland Supreme Court rules nation’s first-ever digital ad tax can stay. Maryland’s tax on digital advertising is in effect. The tax rate is 2.5 percent for businesses making more than $100 million in global gross annual revenue, 5 percent for companies making $1 billion or more, 7.5 percent for companies making $5 billion or more, and 10 percent for companies making $15 billion or more. The tax is expected to generate $250 million in revenue for K-12 education and early childhood education, higher teacher salaries, and career readiness. The Maryland Supreme Court reversed a lower court ruling yesterday, citing the lower court’s lack of jurisdiction. The case now heads back to the circuit court with directions to dismiss the case.
A tax carveout for cribs and other baby gear in Minnesota. The Minnesota budget bill approved by the state Senate includes an amendment that would exempt cribs, strollers, and other baby gear from the state’s 6.875 percent sales tax, plus any additional local taxes. The same proposal was adopted in the House’s version of the budget.
In five years, no more faxing to the IRS? TaxNotes reports (paywall) on the potential. IRS Commissioner Daniel Werfel stated at the American Bar Association Section of Taxation meeting that the idea is to move from fax machines to smartphones. Bridget Roberts, acting IRS transformation and strategy officer, added, “The goal is within the next five years that you’ll be able to say goodbye to your fax machine.”
EU unanimously approves data sharing rules for taxpayers’ crypto holdings. The rules would allow tax authorities to share data and curb tax evasion by those using cryptocurrency. The rules would expand an existing law that aims to keep taxpayers from hiding taxable assets in overseas accounts. The rules could be adopted by the European Union’s Economic and Financial Affairs Council as soon as next week.
In Ireland: Should windfall corporate tax receipts be held in a sovereign wealth fund? Ireland’s Finance Minister Michael McGrath will submit a paper to Ireland’s Parliament that reviews the benefits of establishing a long-term “public savings vehicle.” Multinational companies have paid record amounts of corporate tax recently. In turn, Ireland’s budget surplus could reach 6.3 percent of its gross national income. The fund could be used to pay down debt or pay for pensions and health care spending.
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