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Mar 6, 2018

Tax Policy Update

NUMBER OF THE WEEK: $50,000

Photo: Getty Images/Ralf Hirschberger/DPA

The potential tax hit for those who grabbed a swag bag at the Oscars on Sunday. The IRS considers these fancy giveaways as income and can collect taxes based on the value of the gifts, which is estimated to be somewhere around $100,000. The gift bag includes luxury vacation packages, cosmetics, clothes, and high-tech gadgets.

LEGISLATIVE LANDSCAPE

Rough Riders? Congressional appropriators are trying to finish writing the FY 2018 omnibus spending bill this week. Some sections, like transportation and commerce, are done, while others are still baking. Lawmakers are hoping to introduce the legislation early next week, which will give them several days to debate and pass the package before the March 23 government-funding deadline. But don’t be surprised if Congress ends up cutting it close.

The FY 2018 omnibus would fund the federal government through the remainder of the fiscal year. As with almost all must-pass legislation, the omnibus will likely include unrelated policy riders, such as a fix for Sec. 199A.

Sec. 199A provides a deduction that incents farmers to sell their crops to agricultural co-ops rather than other companies. Non-cooperatives have argued that the deduction places them at a competitive disadvantage. The Tax Policy Update team expects the fix (which will be retroactive) to make it into the omnibus.

Lawmakers are also talking about adding provisions to address telecom, healthcare (i.e. the Alexander-Murray market stabilization bill), and the online sales tax. Democrats are already warning Republicans against sneaking in any poison-pill riders, which could jeopardize the bill’s passage. That said, a shutdown is unlikely as congressional leaders are determined to get the omnibus done as soon as possible.

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The McGuireWoods’ Tax & Financial Services Policy Group assists clients in understanding how the latest legislative and regulatory proposals and decisions may impact their business and industry. To learn more about how our team can help you monitor, analyze, and navigate all relevant legislative and regulatory developments, please contact any of our attorneys and consultants below at (202) 857-1700. For more information on how to subscribe to our weekly Tax Policy Update and tax news alerts, please contact Radha Mohan, rmohan@mwcllc.com, (202) 857-2944.

Russell Sullivan
Partner
rsullivan@mcguirewoods.com

Rosemary Becchi
Partner
rbecchi@mcguirewoods.com

Harold Hancock
Partner
hhancock@mcguirewoods.com

Charlie Iovino
Vice President
ciovino@mwcllc.com

Lai King Lam
Assistant Vice President 
llam@mwcllc.com

Radha Mohan
Assistant Vice President 
rmohan@mwcllc.com

Anne C. Starke
Research Associate
astarke@mwcllc.com

Daniel Chung
Associate 
dchung@mcguirewoods.com