Essential reading: Facebook’s slump hits California’s budget, and more

Tax News

Welcome from to the top tax and accounting headlines from Reuters and other sources.

Tax News - Reuters - Thomas Hodel

Reuters – Thomas Hodel

* California budget hurt by Facebook’s stock-price slump. Vauhini Vara – The Wall Street Journal. Facebook Inc.’s disappointing IPO has claimed another victim: California’s budget. Aides to Democratic Gov. Jerry Brown last week lowered their estimate of how much revenue the state will get from Facebook’s initial public offering by nearly one-third, to $1.3 billion in the three years ending in June 2014, down from $1.9 billion. Link  

* Advisers give wealthy early attention to taxes. Arden Dale – The Wall Street Journal. Financial advisers are focused on their wealthiest clients as they start to make plans this year with the new federal tax rules in place. Link

* American Airlines swings to profit on tax benefit. Susan Carey and Tess Stynes – The Wall Street Journal. In the latest quarter, AMR Corp swung to a fourth-quarter profit after recording a positive one-time item of $350 million from an income-tax benefit. Link  

* CBS shake-up to create outdoor ads REIT. Emily Steel and Andrew Edgecliff-Johnson – The Financial Times. CBS is shaking up its outdoor advertising business, which analysts value at $4bn or more, converting its Americas division into a real estate investment trust. While REITs pay nearly no corporate taxes, they must pay out at least 90 percent of their taxable income as dividends, making them reliable high-yield stocks. Link  

* UK taxman extends scrutiny of the wealthy. Lucy Warwick-Ching – The Financial Times. Hundreds of thousands more wealthy individuals will appear on HM Revenue & Customs’ radar after it doubled its team for tackling wealthy tax avoiders to more than 200 inspectors. The move is expected to increase the number of wealthy individuals under scrutiny to 500,000 according to HMRC estimates. Link

* Taxing times (again) down under. Robb Stewart – The Wall Street Journal. The mining tax, introduced last July, is meant to share the profits of Australia’s mining boom more evenly across the economy. The biggest problem with the tax, though, may be how much uncertainty it has created. Link  

* The Ohio Buckeye refund. The Wall Street Journal editorial. Rather than hoard the cash, as was the state’s wont, the Governor has instructed the Department of Taxation to refund the hard-earned money extending to the four-year statute of limitations and to audit returns for 184,000 other businesses that may have overpaid their taxes. Link  

* Tax exclusions for health insurance. Casey Mulligan – The New York Times opinion. Expenditures on health services, especially those made through employer-sponsored health-insurance plans, are largely excluded from a host of taxes. The tax exclusions affect both the size of the health-services sector and society’s distribution of disposable income. Link

By Nanette Byrnes, Reuters

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