Ky. House speaker favors rollback of sales tax

Speaker Greg Stumbo said he’d like to see a rollback of Kentucky’s sales tax to 5 percent and the elimination of the state’s corporate income tax.

The Prestonsburg Democrat on Thursday told reporters that those are two of the options House lawmakers might be asked to consider in a tax reform proposal that could be unveiled soon.

He said the loss of revenue from those two taxes could be made up by eliminating a broad array of tax exemptions and ensuring that all residents and businesses are paying their fair share.

“We will be in a position to move forward very shortly with at least the numbers to begin the debate,” Stumbo said.

Long-standing proposals for reforming Kentucky’s tax system are getting a closer look this year because of the state’s lingering financial problems. The economic recession has hit the state’s general fund hard, creating a projected $1.5 billion shortfall over the next two-year budget cycle. [Read the full article]

Did you purchase a home after Nov. 6? Don’t expect your $8,000 homebuyer tax credit any time soon.

Since Congress passed the tax credit last February as part of the stimulus program, more than 1.4 million buyers have scrambled to take advantage of it, according to the IRS.

All they had to do was file an amendment to their 2008 tax returns (the ones they filed last spring) and claim the promised refund of 10% of the purchase price — up to $8,000.

“I closed on a Friday and I filed an amendment to my taxes on Monday,” said Valatisha Jacinto, who purchased her Waco, Texas, home last March.

One CNNMoney.com reader wrote: “I bought a new home to get the $8,000 tax credit like many others. However the IRS has NOT ALLOWED ANYONE TO FILE since November 6th!! It has been over 2 MONTHS!!”

He’s right. Nov. 6 marked the date that the rules changed because an extended — and expanded — version of the homebuyer tax credit went into effect. [Read the full article]

A tax agreement that standardized the rules for oil drilling on an American Indian reservation in North Dakota has spurred more exploration and brought in more than $18 million in revenue, state and tribal officials say.

Three Affiliated Tribes Chairman Marcus Levings and Gov. John Hoeven this week extended indefinitely the tax and regulatory agreement on the Fort Berthold reservation, in west-central North Dakota, which has been in place since 2008.

Since the agreement was signed, the number of horizontal wells on the reservation has jumped from one to about 160, Levings said.

Through December, the state has received $13.3 million and the tribe has gotten $4.9 million in tax revenue due to the agreement, said Ryan Rauschenberger, North Dakota’s deputy tax commissioner.

The tax revenue brought in by the deal will be used for to pay for roads, health care and law enforcement, Levings said. Hoeven said the agreement benefits the state and the tribes. [Read the full article]

On Thursday, CNNMoney revealed that buyers who purchased their properties after Nov. 6 were unable to claim the refund because the Internal Revenue Service had yet to release a new form and instructions. But on Friday, the IRS finally posted the new form 5405.

The two-month delay was frustrating to Florida resident Charles Teschke. “We are not broke or anything, but nevertheless we were still counting on getting the tax refund to help pay for the appliances and stuff we needed for our new home,” he said. “The IRS told me they estimate it will take four months for me to get my refund!”

First-time buyers were able to immediately file for the tax credit after Congress approved it last February as part of the stimulus program. All they had to do was file an amendment to their 2008 tax returns (the ones they filed last April) and claim the promised refund of 10% of the purchase price, up to $8,000.

They were able to e-file, and they received their refunds promptly. [Read the full article]

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