Deciding the Details and Writing the Bill
June 22, 2007June 22, 2007. While the Legislature announced a deal last week on a modified gross receipts/business income tax as the structure for the new tax, many of the details were undecided. This week saw many closed door meetings in which the critical details of calculation of the tax bases, apportionment and filing were being worked out. The major controversies being discussed were: 1) the lack of a deduction for self-employment earnings of pass-through entities, 2) the effect of the gross receipts tax on general contractors who cannot deduct payments to subcontractors, 3) how to define and implement unitary filing, and 4) how to treat banks and financial institutions. Many other issues were and are being discussed by interested parties. Staff is busy putting together a first draft of the tax bill and the bill is expected to be released to the public early next week. We are all anxiously awaiting bill language.