Daily Tax Update - October 11, 2016: US Supreme Court Denies Review of State Tax Apportionment Case

US Supreme Court Denies Review of State Tax Apportionment Case:  Today, the US Supreme Court denied certiorari in Gillette v. Franchise Tax Board, the leading case on whether an out-of-state business can elect to apportion its business income under the Multistate Tax Compact’s evenly weighted three-factor formula.  The Court’s decision not to hear the case means that the California Supreme Court’s 2015 holding will stand.  The California court held that the state could enforce its statutory apportionment formula instead of the compact’s formula, despite the state’s adoption of the compact. 

Clinton Proposes Larger Child Tax Credit:  Today, Democratic presidential nominee Hillary Clinton announced as part of her tax plan a larger child tax credit for low-income families.  The proposal would double the possible credit to $2,000 per child under the age of four and allow the credit to be refundable. 

President Obama Signs Tax Relief Bill for Olympic Medalists:  On October 7, President Obama signed into law the United States Appreciation for Olympians and Paralympians Act (H.R. 5946) which will exclude from gross income medals and prize money awarded to Olympic and Paralympic athletes.  This exclusion is applicable for medal recipients with adjusted gross incomes of $1 million or less and will apply retroactively for the 2016 tax year. 

Senator Hatch Presses Treasury on Transparency for Tax Regulations: Today, Senator Orrin Hatch (R-UT) wrote a letter to Treasury Secretary Jacob Lew asking for an explanation on certain decisions by the Treasury Department that Senator Hatch asserted have served to decrease transparency and oversight in the issuance of tax regulations.  Senator Hatch cited a Memorandum of Agreement from 1983 between Treasury and the Office of Management and Budget (OMB) released last month which waives OMB review of regulations that are either interpretative rules or do not have a “significant economic impact” of $100 million or more.  As the vast majority of rules have been deemed either interpretative or not economically significant, only two rules in the last five years have been subject to OMB cost-benefit review, Senator Hatch said.  Senator Hatch concluded the letter by inquiring into the reason for changing the proposed section 385 rules’ classification as economically significant from its original listing on September 30 as not economically significant. 

DTU IN DEPTH – Election Update

How the 2016 Election Will Impact Public Policy Developments – Part II:  Sunday night’s presidential debate was the second of three opportunities for Donald Trump and Hillary Clinton to make their case directly to the American electorate.  The town hall debate, which saw a spirited back and forth on personal and character issues, also touched on a range of policy issues, including tax policy, financial services, energy, and international trade.  The candidates shared their visions for the country for the next four years.  Click here to read more.