On March 29, 2018, the National Association of Bond Lawyers (NABL) formally requested guidance from the IRS regarding the ability of municipal issuers to issue tax-exempt advance refunding bonds to refund taxable bonds after the enactment of the Tax Cuts and Jobs Act (TCJA). The request comes on the heels of public statements by Treasury and IRS representatives regarding their belief that notwithstanding the passage of TCJA, municipal issuers may continue to issue tax-exempt advance refunding bonds to refund taxable bonds, so long as the taxable bonds to be refunded are not tax-advantaged bonds such as Build America Bonds, and the refunding otherwise complies with the requirements of section 149 of the Code and the regulations thereto.
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Trump Infrastructure Plan Would Expand Use of Private Activity Bonds
On February 12, 2018 the Trump Administration released its long-awaited Infrastructure Plan. A copy of the legislative outline for the Plan can be accessed here. The Plan calls for $1.5 Trillion in new infrastructure investment over the next ten years – although only $200 Billion of that will be in the form of new…
Review and Analysis of Tax-Exempt Loan Documents Following Tax Cuts and Jobs Act
On December 20, 2017 Congress passed the Tax Cuts and Jobs Act (TCJA). The legislation was signed by President Trump on December 22, 2017 and many key provisions of the law became effective on December 31, 2017.
The purpose of the TCJA was to stimulate economic growth through a major overhaul of the Internal Revenue Code. One of the signature elements of the TCJA is the reduction of the federal corporate tax rate from 35% to 21%. While this may be good news to the business community generally, the rate reduction presents potential unique problems for conduit borrowers, such as 501(c)(3) organizations, and lenders under tax-exempt bank loan structures.
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A Look Back at 2017
As we prepare to say goodbye to 2017 and welcome a new year, we thought we’d take a moment and revisit some of our favorite stories from the last twelve months that we’ve followed on the McNees Public Sector Blog.
- A kinder, gentler Internal Revenue Service? Perhaps in response to the Trump Administration’s “less is
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House, Senate Pass Tax Cuts and Jobs Act; Private Activity Bonds Saved
2018 will be a year of monumental tax law changes following the recent approval by the House and Senate of the Tax Cuts and Jobs Act. President Donald Trump is expected to sign the bill into law in the coming days. While the Act in its final form contains some provisions that hurt the tax-exempt municipal bond industry, many detrimental provisions included in prior versions of the bill were dropped.
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House GOP Tax Plan Targets Advance Refunding, Private Activity Bonds for Elimination
Chairman Kevin Brady of the U.S. House of Representatives, Committee on Ways and Means today introduced the “Tax Cuts and Jobs Act,” H.R. 1, and it does not contain good news for municipal issuers of tax-exempt bonds and private sector entities able to borrow on a tax-exempt basis.
Among other things, H.R. 1 would eliminate…
IRS Withdraws Proposed “Political Subdivision” Regulations
There was a collective sigh of relief from bond lawyers across the country today, as the Department of the Treasury announced that it intends to withdraw in their entirety the regulations proposed by the IRS on political subdivisions, originally published on February 23, 2016. A copy of Treasury’s press release announcing the decision can…
IRS Proposes New Regulations on Public Approval Requirement for Private Activity Bonds
In a Notice of Proposed Rule Making published September 28, 2017, the IRS announced new proposed regulations on the public approval requirement of section 147(f) of the Internal Revenue Code, 26 U.S.C. §147(f). A copy of the Notice can be accessed here. The announcement should not come as a surprise – IRS representatives announced earlier this year at the annual Tax and Securities Law Institute sponsored by the National Association of Bond Lawyers that the finalization of regulations interpreting section 147(f) was a regulatory priority for the agency.
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URGENT ALERT! Broad Sales and Use Tax on Storage Now a Possibility in Pennsylvania!
The Pennsylvania General Assembly continues to battle over revenue sources while the state remains without a complete state budget. And when it seems impossible, things actually continue to worsen with the House and Senate scheduled sessions to begin this afternoon. Over the weekend, the idea of a storage tax was discussed and it now seems…
PA Supreme Court Upholds Constitutional Safeguards in School District Assessment Appeals
The ability of school districts to raise additional revenue through means other than tax increases just got a bit more difficult. In an eagerly awaited decision, the Pennsylvania Supreme Court has upheld the ability of taxpayers to challenge on constitutional grounds the practice in certain school districts of engaging in selective assessment appeals – that…