Gravel2Gavel Construction & Real Estate Law BlogThis November, California voters will decide whether commercial and industrial properties will lose their Proposition 13 protection against property tax reassessment. In “The Split-Roll Initiative is Posted to Rock California’s Property Tax System“, colleagues Craig A. Becker, Richard E. Nielsen and Breann E. Robowski explain.
Articles Posted in Tax
To Purchase of Realty Encumbered by Long-Term Leasehold, California Court of Appeal Concludes Transfer Tax Not Applicable
Posted
In 731 Market Street Owner LLC v. City and County of San Francisco (June 18, 2020), California appellate court affirms that local realty transfer tax does not apply when leasehold has a remaining term of 35 years or more. In “California Court of Appeal Concludes Transfer Tax Not Applicable to Purchase of Realty Encumbered by Long-Term Leasehold,” colleagues Craig A. Becker, Breann E. Robowski, Richard E. Nielsen, and Robert P. Merten III discuss an overview of a recent ruling.
A Summary of California Tax Legislation AB 85
Posted
On June 15, 2020, the California Legislature passed Governor Newsom’s proposed tax legislation to raise additional income tax revenue to assist in balancing the California budget. (AB 85). The Senate and Assembly each achieved the two-thirds majority vote required for California tax increases (27-11 in the Senate and 56-20 in the Assembly), with Gov. Newsom expected to sign the legislation later this week. In “California Legislature Passes Governor Newsom’s Proposal to Suspend California Net Operating Loss Deductions and Limit Tax Credits during 2020 – 2022,” colleagues Jeffrey M. Vesely, Craig A. Becker, Carley Roberts and Breann E. Robowski discuss the tax legislation’s two principal components.
IRS Extends Continuity Safe Harbor for Renewable Energy Projects
Posted
The IRS issues anticipated guidance providing relief to developers facing delays related to COVID-19. In the recent alert, “IRS Extends Continuity Safe Harbor for Renewable Energy Projects,” colleague Jorge Medina, discusses how the guidance also provides some clarity on the impact of supply chain disruptions on equipment orders placed later in 2019, primarily associated with solar and fuel cell companies, by addressing the application of the “3½ month rule” in light of COVID-19 and providing a new safe harbor.
COVID-19 Impacts on REITs and Mitigation Strategies
Posted
REITs have several options to defer required dividend distributions through the current year and even significantly into next year (although at a potential cost), and the use of combined cash and stock distributions may greatly reduce a REIT’s cash outlay for dividend distributions. In “COVID-19 Impacts on REITs and Mitigation Strategies,” colleagues Robert S. Logan, Brian M. Blum and Peter J. Elias address how REITs need to be sensitive to the consequences of acts taken in response to the COVID-19 pandemic on their compliance with the REIT tests under the tax laws.
CARE Act Tax Deferrals and Refund Provisions
Posted
The Act represents the third legislative attempt to address the economic effects of the COVID-19 pandemic. In “CARES Act Provides Tax Deferral and Refund Opportunities,” colleagues Brian M. Blum and Harsha Reddy address that many of these provisions provide taxpayers with liquidity benefits by providing cash payments, pushing back tax payment dates and reducing current and prior year tax liabilities.
No Sales or Use Tax Due on Materials and Equipment Used to Construct and Install Steam Facility at Tennessee Manufacturing Plant
Posted
In a letter ruling published March 16, 2020, the Tennessee Department of Revenue concluded that a contractor’s purchase of materials and equipment for use in the construction and installation of a new steam production facility at a federally owned manufacturing plant was exempt from Tennessee sales and use tax. Tenn. Letter Rul. No. 20-02 (issued Feb. 10, 2020).
A Decision to Keep an Eye On in South Carolina
Posted
On March 6, 2019, the South Carolina Administrative Law Court entered an order in Colonial Pipeline Co. v. South Carolina Department of Revenue, No. 18-ALJ-17-0443-CC, in which it held that a pipeline company’s assets may qualify for a property tax exemption for pollution control equipment of industrial plants under S.C. Code Ann. § 12-37-220(8). In his latest post on SeeSALT, Zachary T. Atkins examines this decision more closely.
The U.S. Court of Appeals Upholds Denial of Alternative Fuel Tax Credits and the Imposition of Large Penalties
Posted
The federal government has long encouraged the development and use of alternative fuels by enacting legislation that promises tax credits for such use. However, special care must be taken to ensure that all of the requirements of the law are observed. This has been made clear by recent rulings of the U.S. Court of Claims and the U.S. Court of Appeals for the Federal Circuit.
Securities Law and Qualified Opportunity Funds
Posted
Even as tax incentives provided by the opportunity zone program in 2017’s Tax Cuts and Jobs Act offer the possibility of significant tax benefits when investing gains in Qualified Opportunity Funds (QOFs), such funds must comply with a wide variety of significant federal and state securities laws and regulations. In “Securities Law Guidance for Qualified Opportunity Funds (QOFs),” colleagues Ellen C. Grady and Robert B. Robbins discuss the joint statement recently issued by the Securities and Exchange Commission (SEC) and the North American Securities Administrators Association (NASAA) summarizing federal and state securities law considerations that may be applicable to QOFs.