New Legislation May Effect Your Clients
Senate Bill 86 became law on March 24, 2011. This bill included several items which may affect your clients’ tax return preparation next year. The provisions of this bill included the following:
Use Tax Lookup Table: We will revise the income tax forms and instructions to include a use tax table to allow taxpayers to determine the amount of use tax they owe. This provision is operative for purchases of tangible personal property made on or after January 1, 2011, in taxable years beginning on or after January 1, 2011.
Child and Dependent Care Credit: The credit is no longer refundable. This provision is operative for taxable years beginning on or after January 1, 2011.
Voluntary Compliance Initiative: This bill authorizes a new voluntary compliance initiative (VCI) permitting taxpayers to file amended returns and pay the tax and interest associated with abusive tax avoidance transactions (ATATs) or unreported offshore income. Participants will avoid criminal prosecution and certain penalties. Please see the article in the Big Business section of this issue of Tax News for more information.
Financial Institutions Record Match: Establishes a record match process between financial institution customer records and our debtor records. We will use the match information, which is more current than information that we have now, to collect delinquent state income tax debts and non tax debts. This provision is operative 120 days after the effective date. The first data exchange occurs no earlier than April 1, 2012.
This bill is a budget bill and is effective immediately upon enactment.