Mar 30, 2015
From KPMG TaxWatch
The permanent Fiscal Year 2015 Budget Support Act of 2014 (the Act) became law on February 26, 2015 after the 30-day mandatory Congressional review period expired. Recall, various emergency versions of this Act were passed in the interim period between July 14, 2014 and February 26, 2015, and the provisions as originally enacted were never allowed to lapse during the review period. The Act makes certain tax changes for individuals and business taxpayers. Most notably, effective for tax years beginning on or after December 31, 2014, the 9.975 percent corporate franchise tax rate is reduced to 9.4 percent. Further rate reductions will occur if and when District revenue collections exceed certain amounts.
The Act also makes certain changes to the District’s apportionment provisions, including requiring taxpayers to use single-sales factor apportionment and market-based sourcing rules for tax years beginning after December 31, 2014. Specifically, sales, other than sales of tangible personal property, will be attributed to the District if the taxpayer's market for the sale is in the District. The Act also expanded the District sales and use tax to certain services including, but not limited to, self-storage services, carpet cleaning, and health club services (aka the “yoga tax”). However, these services have been taxable since October 1, 2014 under emergency versions of the bill. Please stay tuned to TWIST for future legislative updates.
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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.