Taxation-State and Local Commons^™

Finding The Pearl In The Oyster: Supercharging Ipos Through Tax Receivable Agreements, Christopher B. Grady

Northwestern University Law Review

A new, “supercharged” form of IPO has slowly developed over the last twenty years. This new form of IPO takes advantage of several seemingly unrelated provisions of the tax code to multiply pre-IPO owners’ proceeds from a public offering without reducing the amount public investors are willing to pay for the stock. Supercharged IPOs use a tax receivable agreement to transfer tax assets created by the IPO back to the pre-IPO ownership, “monetizing” the tax assets. As these structures have become more efficient, commentators have expressed concerns that these agreements deceive shareholders who either ignore or do not understand the …

Taxing Social Impact Bonds, Orly Mazur

Faculty Journal Articles and Book Chapters

An exciting new way to fund social services has recently emerged. This new financing mechanism, called a social impact bond (SIB), has the potential to help us tackle some of our nation’s most challenging social problems. Broadly speaking, a SIB is a type of “pay for success” contract where private investors provide the upfront capital to finance a social program, but only recoup their investment and realize returns if the program is successful. Like any new financing instrument, SIBs create numerous regulatory challenges that have not yet been addressed. One unresolved issue is the tax implications of a SIB investment. …

Tax Cannibalization And Fiscal Federalism In The United States, David Gamage, Darien Shanske

Articles by Maurer Faculty

We began this project pondering a riddle. Most state governments have adopted what we-and many others-view as clearly suboptimal tax policies, especially in regard to the taxation of corporate income and capital gains. Yet, with the notable exception of those who oppose progressivity and the taxation of capital, state-level tax policymakers have had remarkably little appetite for reform.

This Article provides one major explanation for this riddle by identifying and demonstrating a phenomenon that we label as "tax cannibalization." We argue that flawed state-level tax policies derive in part from perverse incentives inadvertently created by the federal government.

The American Health Care Act Would Toss The States A Hot Potato, David Gamage, Darien Shanske

Articles by Maurer Faculty

This essay explains how the American Health Care Act (AHCA) – the House Republicans’ proposed replacement for Obamacare – would toss a hot potato to state governments. Were the AHCA to be enacted into law, state governments would need to act promptly if they are to save individual insurance markets within their states. This essay explains measures that state governments might take to respond to this threat.

In States We "Trust": Self-Settled Trusts, Public Policy, And Interstate Federalism, Brendan Duffy

Northwestern University Law Review

Over the last twenty years, domestic asset protection trusts have risen in popularity as a means of estate planning and asset protection. A domestic asset protection trust is an irrevocable trust formed under state law which enables an independent trustee to allocate money to a class of

persons, which includes the settlor.

Since Alaska first enacted domestic asset protection legislation in 1997, fifteen states have followed its lead. The case law over the last twenty years addressing these trust mechanisms has, however, been surprisingly sparse. A Washington bankruptcy court decision, In re Huber, altered this drought, but caused more confusion …

Brief Of Interested Law Professors As Amici Curiae Supporting Petitioner, Edward A. Zelinsky

Amicus Briefs

Amici curiae are 14 professors of law who have devoted much of their teaching and research to the area of state taxes and the role of state tax policy in our federal system. The names and affiliations (for identification purposes only) of amici are included in an addendum to this brief. The amici are concerned with the effect of this Court’s dormant Commerce Clause jurisprudence on the development of fair and efficient state tax systems. No decision of this Court has had more effect on state sales and use tax systems than Quill Corporation v. North Dakota. We believe …

Taxation, Craig D. Bell

University of Richmond Law Review

No abstract provided.

Of More Than Usual Interest: The Taxing Problem Of Debt Principal, Charlene D. Luke

Seattle University Law Review

Leverage is an essential but often troubling component of the U.S. market. The financial crisis highlighted the risks and complexity of a leverage web that includes flesh-and-blood people from all walks of life and paper people from all corners of the business and investment world. In the tax area, the potentially problematic incentive effects of interest deductibility have long engaged a wide array of tax commentators and policymakers. While interest deductibility rightly receives widespread scrutiny, a more comprehensive approach to leverage is needed. This Article focuses on the surprisingly complicated tax treatment of cash (and cash equivalent) borrowings. This Article …

Taxation, William L.S. Rowe, Emily J.S. Winbigler

University of Richmond Law Review

This article reviews significant recent developments in the lawsaffecting Virginia state and local taxation. Each section coverslegislative activity, judicial decisions, and selected opinions fromthe Virginia Department of Taxation (the "Department") and the Virginia Attorney General over the past year.

Transforming Federal And State Retirement Tax Deductions To Refundable Tax Credits, Teresa Ghilarducci, Ismael Cid-Martinez

Marquette Benefits and Social Welfare Law Review

The purpose of this Study is to calculate retirement account tax expenditures by states. States with income taxes that allow tax deferral of retirement account contributions and investment earnings lose nearly $20 billion in revenue. This Study uses a variety of data sources, including state reports from their executive agencies and known estimation techniques to calculate the amount of tax credits that a worker in each state would receive if the deferrals were converted to a refundable tax credit. The average credit under these estimation techniques and calculations would be $172.

Taxation, Craig D. Bell

University of Richmond Law Review

This article reviews significant recent developments in the laws affecting Virginia taxation. Each section covers legislative changes, judicial decisions, and selected opinions or pronouncements from the Virginia Department of Taxation (the "Tax Department") and the Virginia Attorney General over the past year.

Heal The Suffering Children: Fifty Years After The Declaration Of War On Poverty, Francine J. Lipman, Dawn Davis

Scholarly Works

Fifty years ago, President Lyndon B. Johnson declared the War on Poverty. Since then, the federal tax code has been a fundamental tool in providing financial assistance to poor working families. Even today, however, thirty-two million children live in families that cannot support basic living expenses, and sixteen million of those live in extreme poverty. This Article navigates the confusing requirements of an array of child-related tax benefits including the dependency exemption deduction, head of household filing status, the Earned Income Tax Credit, and the Child Tax Credit. Specifically, this Article explores how altering the definition of a qualifying child …

Taxation, Craig D. Bell

University of Richmond Law Review

The overall purpose of this article is to provide Virginia tax and general practitioners with a concise overview of the recent developments in Virginia taxation that will most likely impact those practitioners. This article does not, however, discuss many of the numerous technical legislative changes to title 58.1 of the Virginia Code, which covers taxation.

The Economics And Politics Of Washington's Taxes: From Statehood To 2013, Don Burrows

Washington State Books

The book is divided into three parts. Part I contains five chapters. Chapters 1 and 4 provide a description, comparison and evaluation of Washington’s current tax structure. Chapter 2 provides a description, history and evaluation to the state’s three most important taxes: property, sales and B&O. Chapter 3 describes the roles played by the “tax policy makers” (i.e., citizens, governors, legislators, other public officials, businesses, labor groups, and numerous other interest group) in bringing about those changes. Chapter 5 includes a discussion and an analysis of contentious tax issues of concern to citizens, public officials and interest groups alike. Most …

California Tax Practitioners Beware: Even The Ninth Circuit's I.R.C. Section 1031 Loophole Has Limits, Laurel A. Tollman

Pepperdine Law Review

Section 1031 of the Internal Revenue Code provides tax deferred status for like-kind exchanges of investment property. The Deficit Reduction Act of 1984 amends this section to curb the use of the controversial delayed exchange as a tool to suspend tax assessment for an inordinate period of time. California attorneys should beware the fiture structuring of like-kind exchanges;for the amendment revises the lenient procedures for like-kind qualification sanctioned by the permissive Ninth Circuit.

Taxation, Craig D. Bell

University of Richmond Law Review

No abstract provided.

The Effect Of Casino Tax Policy On Short-Run Gaming Development, Kahlil Philander

UNLV Theses, Dissertations, Professional Papers, and Capstones

This study examines the effect of casino tax rate structure on investment by casino operators. Using a panel data set consisting of all states with legal commercial casino gambling from 1998 to 2009, a fixed-effect model with two-stage least squares is estimated to examine the effect of gambling taxes on firms' short-run behavior. The study finds that maximum casino tax rates decrease casino employment, with an estimated average elasticity of -0.5. This result is noted to be robust to several different model specifications and data subsets. No robust relationship is found between maximum tax rates and casino wages. No significant …

Americans' Unwillingness To Pay Taxes Before The American Revolution: An Uncomfortable Legacy, Richard A. Westin

Law Faculty Scholarly Articles

When one reflects on the sorry condition of America’s finances one has to wonder why there is such resistance to fiscal discipline. Is it merely because there is an obstreperous group in the US Congress who cannot abide any tax? Has the public been subtly lobbied into believing that American taxes are high, pointless and intolerable or is there some gene in the America’s body politic that has always been there that expresses itself from time to time in a pernicious cheapness? Perhaps all those things are true, or perhaps none. Nevertheless, a glance backward at Colonial days can stimulate …

A Better Way Forward For State Taxation Of E-Commerce, David Gamage, Devin J. Heckman

Articles by Maurer Faculty

We propose a novel solution for states that wish to tax interstate e-commerce – based on fully and adequately compensating remote vendors for all tax compliance costs. We argue that our proposed solution is compatible with the Quill framework for when states can constitutionally impose burdens on remote vendors. We argue that unlike our proposed solution, the recent state attempts to tax interstate e-commerce through so-called “Amazon laws” are unconstitutional, ineffective, or both. We thus urge the states to adopt our proposed approach as the best way forward for state taxation of interstate e-commerce.

The Saga Of State "Amazon" Laws: Reflections On The Colorado Decision, David Gamage, Darien Shanske

Articles by Maurer Faculty

We analyze the Colorado district court’s decision in Direct Marketing Association v. Huber – a decision that permanently enjoined Colorado’s "Amazon" law. Had it not been enjoined, the Colorado law would have mandated information reporting by remote e-commerce vendors so that Colorado could levy its sales and use tax on the e-commerce purchases made by Colorado residents. We evaluate the applicability of the Tax (Anti-)Injunction Act and whether the Colorado statute and regulations should be reviewed as a tax or as a regulation. We also suggest alternative approaches that state legislatures might use in order to levy taxes on remote …

On Tax Increase Limitations: Part Ii -- Evasion And Transcendence, David Gamage, Darien Shanske

Articles by Maurer Faculty

In this essay, the second of a series, we continue our evaluation of state Tax Increase Limitations (TILs) – special rules that limit state legislatures’ ability to raise taxes, such as by requiring supermajority votes. We analyze two strategies whereby majority parties can evade TILs to the extent they so desire. We further argue that these strategies have some positive normative features. The strategies designed to evade TILs may ultimately lead toward a more effective means for controlling the size of state government than TILs themselves are able to provide.

On Tax Increase Limitations: Part I -- A Costly Incoherence, David Gamage, Darien Shanske

Articles by Maurer Faculty

In this essay, the first of a series, we explore the theoretical implications of one particular type of fiscal limitation on state legislatures - namely, special rules limiting tax increases. In this first essay we will explore the analytic soundness of these tax increase limitations (TILs). In future essays in this series we will analyze some of the consequences of TILs and in particular how they can be 'evaded.' We will argue over the course of this series of essays that because there is no meaningful content to the term 'tax increase' as it is used in TILs, legislative majorities …

Taxation, Craig D. Bell

University of Richmond Law Review

No abstract provided.

Taxation, Craig D. Bell

University of Richmond Law Review

No abstract provided.

State Constitutional Limits On New Hampshire‘S Taxing Power: Historical Development And Modern State, Marcus Hurn

Law Faculty Scholarship

The New Hampshire Constitution is, in most of its fundamental parts, very old. It is long (nearly 200 articles) and wordy, even by the standards of the eighteenth century. It expresses essential principles in more than one place, in more than one way, and in language that to modem eyes is more suited to political philosophy than to positive law. Most of it was copied from the original Massachusetts Constitution, itself based on a draft by John Adams. However, there is no other state in the union with a structure of taxing powers and limits comparable to New Hampshire's.

The Commerciality Doctrine As Applied To The Charitable Tax Exemption For Homes For The Aged: State And Local Tax Perspectives, David A. Brennen

Law Faculty Scholarly Articles

This essay examines the question of how state and local government officials should consider federal tax law principles, like the commerciality doctrine, when they challenge state and local property tax exemptions that rely, at least in part, on tax-exempt charitable status for federal income tax purposes. In particular, this essay uses the example of continuing care retirement communities to consider tax-exempt law’s commerciality doctrine in an attempt to discern distinctions between “homes for the aged” that are “charitable,” and thus entitled to exemption, and those that are too commercial, and thus not entitled to exemption. In fact, one might say …

Taxation, Craig D. Bell

University of Richmond Law Review

This article reviews significant developments in the law affect-ing Virginia taxation. Each section covers recent legislative changes, judicial decisions, and selected opinions or pronouncements from the Virginia Department of Taxation and the Attorney General of Virginia over the past year. The overall purpose ofthis article is to provide Virginia tax and general practitioners with a concise overview of the recent developments in Virginia taxation most likely to have an impact on their practices. This article will not, however, discuss many of the numerous technical legislative changes to the State Taxation Code of Title 58.1.

Stormwater Utility Fees: Considerations & Options For Interlocal Stormwater Working Group (Iswg), New England Environmental Finance Center

Economics and Finance

Stormwater utilities are a concept whose time seems to have arrived. Established by relatively few communities in the 1970s as a method of funding flood control measures, stormwater utilities now exist in over 400 municipalities and counties throughout the United States. During the next 10 years, their numbers are expected to swell dramatically – by one estimate to over 2,000 by the year 2014.

The reasons for this growth are multifold. Federal stormwater regulations passed in the 1980s (Phase I of the National Pollutant Discharge Elimination System Program, or NPDES), motivated many larger communities to seek alternative funding sources and …

Revisiting Granite Falls:Why The Seattle Monorail Project Requires Re-Examination Of Washington's Prohibition On Taxation Without Representation, Matthew Senechal

Seattle University Law Review

The composition and actions of the un-elected Seattle Monorail Project (SMP) Board raise the question of whether the Washington State Constitution permits the legislature to delegate its taxing power to municipal corporations governed by unelected boards. Stated differently, the SMP Board and its actions present the question of whether the Washington State Constitution requires that local taxes be imposed only by officials who are elected by, and accountable to, the electorate burdened by the tax. While Washington's Constitution, political structures, and legal doctrine are designed to prevent "taxation without representation," the recent case of Granite Falls Library Facility Area v. …

Taxation, Craig D. Bell

University of Richmond Law Review

No abstract provided.