State and Local Taxation
March 21, 2016
COST’s annual survey docks SC and other states which have different interest rates for refunds and assessments
Link: "SC tax agency wants money returned to taxpayers" from The State
Economic Development | State and Local Taxation
March 16, 2016
Link: "Charleston media company scammed of employee information" from Greenville News Online
Economic Development | State and Local Taxation
March 15, 2016
“Current GAAP has no explicit guidance on the accounting for, or the disclosure of, government assistance received by business entities. The amendments in this proposed Update would improve financial reporting by providing disclosure requirements to increase transparency about government assistance arrangements, including (1) the types of arrangements, (2) the accounting for government assistance, and (3) their effect on an entity’s financial statements.”
Simply put, business are going to have to identify and report the receipt of many economic development incentives; both COST and TEI provided extensive comments to the proposed rule; I was going to send a well written screed but the deadline had run
The proposed FASB 832 will require the following:
832-10-50-3 An entity shall disclose the following about existing government assistance agreements to the extent material:
a. The nature of the assistance, including a general description of the significant categories (for example, grants, loans, or tax incentives) and the form in which the assistance has been received (for example, as a reduction of an expense, a refund of taxes paid, free resources, or a cash grant)
b. The accounting policy used to account for government assistance (for example, whether assistance is recognized immediately into income or recognized over the life of a related asset)
c. Which line items on the balance sheet and income statement are affected by government assistance (for example, whether the assistance has been deducted from the carrying value of an asset or presented as a performance obligation liability) and the amounts applicable to each line item
d. Unless impracticable, the amount of government assistance received but not recognized directly in the financial statements. The amount of government assistance received but not recognized includes value that was received by an entity for which no amount has been recorded directly in any financial statement line item. If impracticable, an entity shall disclose that fact and explain why the disclosure is impracticable. See paragraphs 832-10-55-1 through 55-3 for implementation guidance.
> Significant Terms and Conditions of the Agreement
832-10-50-4 An entity shall disclose information about the significant terms and conditions of the agreement. Terms and conditions that might be appropriate include, but are not limited to, any of the following:
a. The duration or period of the agreement, tax rate or interest rate provided by the agreement, or the effect on the entity’s tax or interest rate from the agreement
b. Commitments made by both the entity and the government
c. Provisions, if any, for recapturing government assistance (for example, when the government is permitted to take back the assistance), including the conditions under which recapture is allowed
d. Other contingencies.
Link: "FASB proposal aims to increase transparency regarding disclosure of government assistance" from the Journal of Accountancy
Link: "In brief: FASB proposes new disclosures for government grants, some tax incentives" from PCW
Economic Development
March 15, 2016
As we have covered in several seminars (and will be covering at the upcoming seminar, Economic Development Fundamentals), FOIA can apply to private non-profits which receive governmental funding; FOIA may apply to some of the Alliances and county ED boards; for more information see Chapter 21 in Maybank, et. al., SC Nonprofit Corporate Practice Manual (2nd Ed, SC Bar)
As maybe seen below, a Circuit Court Judge recently ruled that a Chamber of Commerce was subject to FOIA
Link: "Public Policy Alert: Freedom of Information Act Ruling" from SC Public Policy Group Chair Bob Coble
Economic Development
March 14, 2016
Link: "State Job Creation Strategies Often Off Base" from CBPP
Economic Development | State and Local Taxation
March 14, 2016
In 2012, states with particularly large fiscal gaps at capacity included Alabama, Arizona, Arkansas, Georgia, Idaho, Kentucky, Mississippi, Nevada, and South Carolina
Link: "Is your state’s tax system punching above or below its weight?" from TaxVox
State and Local Taxation
March 14, 2016
Link: "Liberty Tax franchises face federal attempts to shut them down" from The Virginian-Pilot
Economic Development
March 10, 2016
Link: "Lip skins and floor grids: A cluster of Boeing suppliers sprouts in South Carolina" from The Seattle Times
Link: "Boeing South Carolina no longer playing catch-up to local plants" from The Seattle Times
State and Local Taxation
March 08, 2016
Link: "Sales tax on auto repairs, dozens of other services starts Tuesday" from The News & Observer
Economic Development | State and Local Taxation
March 08, 2016
Link: "Why Taxing the Wealthy Can Be Trouble for States" from The Pew Charitable Trusts
Economic Development
March 04, 2016
Link: "Gov. Nikki Haley forms panel to make job-seeking counties more competitive" from The Post & Courier
Link: "Gov. Haley forms competitiveness council to evaluate local governments" from the Charleston Regional Business Journal
Economic Development | State and Local Taxation
March 03, 2016
Link: "Gov. Nikki Haley Announces Local Government Competitiveness Council" from SC.Gov; SC Office of the Governor
State and Local Taxation
February 25, 2016
And these are just the filers!
The number of those who file but don’t pay state taxes is about the same. The TRAC recommended a filing fee of $50 for state income tax returns so that everybody would be contributing something.
Link: "45% of Americans pay no federal income tax" from MarketWatch.
Economic Development
February 24, 2016
Link: GSU study: Long-term costs and benefits of film tax incentive "uncertain" from the Atlanta Business Chronicle.
Link: "Return of a prodigal; Textiles come home to South Carolina as a Chinese investment" from The Washington Times.
Link: "Export-Import Bank funding paramount to South Carolina economy, expert says" from Palmetto Business Daily.
Link: "South Carolina Facts & Figures" from the U.S. Global Leadership Coalition.
Link: "The Facts about EXIM Bank" from EXIM website.
Link: "America’s Leading EDCs; These Economic Development Corporations Are Rewriting The Laws Of Attraction" from GlobalTrade Magazine.
Link: "This Chinese Company Moved Production to South Carolina to Save Money" from The Wall Street Journal.
Economic Development | State and Local Taxation
February 10, 2016
As maybe seen below, a Greenville Nonprofit has filed a lawsuit seeking to invalidate a Richland county ordinance granting tax breaks to several student housing projects; before I begin my well-reasoned discourse (rant) on the lawsuit let me point out we represent several of the developers
The lawsuit alleges it is unconstitutional to include residencies in a multi county business park; of course, student housing isn’t taxed as residential- if it was no one would need a tax break; primary residences receive a 4% assessment ratio on real property and various property tax credits; student housing and apartment real property are taxed as commercial with a 6% assessment ratio; furniture and fixtures in a house are not taxed; a landlord’s furniture and fixtures are taxed at 10.5%
The South Carolina Supreme Court has already blessed including commercial (large mall) in a MCBP in Horry County School District v. Horry County
Why does it make sense for Richland county to grant property tax incentives for student housing? First, most of the dorms in Richland county pay no taxes as they are owned by state agencies (USC) and non-profit colleges; privately owned fraternity and sorority dorms are also exempt
Second, largely because so much of its property tax base is exempt, as seen below the taxes in Richland county are high. (indeed the lawsuit was motivated by developers in Lexington county whose millage is lower, and thus have a competitive advantage)
The Minnesota Center for Excellence did the 50 State Property Tax Comparison by examining cities & specific rural areas in each state. They included the capital city in each state as the urban center.
Columbia, SC ranked poorly for Urban Commercial Property Taxes. #8 for property value of $100K and #10 for Property Value of $1M and $25M. 1st is worst (highest net tax & ETR) and 53rd is best.
Link: “EXCLUSIVE: Lawsuit might undo huge tax breaks for student housing” from The State
Link: “Richland County calls student housing lawsuit ‘baseless,’ says will defend tax breaks vigorously” from The State
State and Local Taxation
February 10, 2016
Link: "Where's your tax refund? In some states fighting fraud, it'll be a while" (subscription required) from POLITICO Pro.
Link: "We Smell Refund! OR NOT..." from Fits News.
Economic Development
February 9, 2016
Link: "Gannon: Four thoughts from state economic development leader" from Salisbury Post.
Link: (AUDIO) "SC vs. NC: Whose Economy is Winning the Battle" from ETV radio.
(audio) "SC vs NC: whose economy is winning the battle?...'SC is eating our lunch.' The mojo for economic development in South Carolina is so far ahead...North Carolina had a 50-year head start..."
Link: "In State Job Licensing, Uneven Regulation of Workers–and the Economy" from The Wall Street Journal.
SC has least licensing
Link: "In Focus: Incentives No More - Why States are Changing Course on Incentives" from Area Development.
State and Local Taxation
February 9, 2016
Property Tax Litigation Update:
One case has been pending and two lawsuits were just filed
two years ago a railroad filed suit against the state arguing that Act 388 violated the 4R act; the case was tried in federal court and a decision is still pending
Yesterday Ned Sloan’s nonprofit filed a lawsuit alleging that the inclusion of commercial property in a MCBP was unconstitutional; given the Supreme Court’s decision in Horry County School District v. Horry county- which involved the inclusion of a mall- the case stands little chance of prevailing
Also this week the SC Forestry Association filed suit in the original jurisdiction of the Supreme Court against 7 counties; the allegation is that the seven counties had no right to require forestry management plans as a condition to granting ag-use
Economic Development
February 5, 2016
Link: "Why Location Matters to Manufacturers in Lessening the Tax Bite" from Area Development.
Link: "Manufacturing leaders cite bright future if workforce, policy challenges are addressed" from The Post and Courier.
Link: "Why conservative South Carolina could actually be a sign of the future of U.S. energy" from The Washington Post.
Link: "Editorial: Instead of blaming SC ... " from Salisbury Post.
Economic Development
January 29, 2016
Link: “S.C. union membership falls in ’15, now lowest rate in the nation” from The Post and Courier.
Economic Development
January 27, 2016
Link: “$1 million dollar Community Development Tax Credit Cap met in 2015” from The Moultrie News.
State and Local Taxation
January 26, 2016
Economic Development Fundamentals Seminar Agenda
Friday, February 19, 2016
1230 Main Street, Suite 700
Columbia, SC 29201
Please RSVP to Serena via email at SHernandez@nexsenpruet.com.
Economic Development
January 22, 2016
Link: “Chamber puts out agenda for General Assembly” from The State.
State and Local Taxation
January 21, 2016
Yesterday the Tax Foundation released their annual State-Local Tax Burdens; South Carolina fared well- 42nd in the country (50 is best); NC is 20th; the report is based on 2012 data.
Link: “State-Local Tax Burden Rankings FY 2012” from the Tax Foundation.
State and Local Taxation
January 14, 2016
Can you appeal in a non-reassessment year? Some counties take the position you cannot! Deadline to appeal is tomorrow!!!
Link: “With no lake view, what happens to home values?” from The State.
