H -° L 74°
  • heavy-rain-night
    Current Conditions
    Thundershowers. H -° L 74°
  • partly-cloudy-tstorms-day
    Thundershowers. H -° L 74°
  • partly-cloudy-tstorms-day
    Partly Cloudy T-storms. H 89° L 71°

Wsb news on-demand

00:00 | 00:00


Wsb traffic on-demand

00:00 | 00:00


Wsb weather on-demand

00:00 | 00:00

State & Regional Govt & Politics
IRS proposal could hurt Georgia rural hospital, school tax credits

IRS proposal could hurt Georgia rural hospital, school tax credits

IRS proposal could hurt Georgia rural hospital, school tax credits
Evans Memorial Hospital in Claxton is among the rural medical centers that have been helped by the rural hospital tax credit program

IRS proposal could hurt Georgia rural hospital, school tax credits

A proposed federal rule could discourage donations to two highly popular Georgia tax credit programs that support struggling rural hospitals and parents who want to send their children to private schools.

The proposed rule by the U.S. Treasury Department and Internal Revenue Service would limit or eliminate the federal tax break donors get for giving to such state programs.

The rule comes at a crucial time for the two Georgia programs.

The General Assembly this year raised the annual tax credit limit for donors to the private school scholarship program from $58 million to $100 million. And advocates for rural hospitals were planning to push the General Assembly in 2019 to increase the dollar-for-dollar state tax credit for donating to their program from $60 million a year to $100 million.

“It’s a big deal for us,” said Jimmy Lewis, the CEO of HomeTown Health, which advocates for rural hospitals. “The rule is designed to stop states from circumventing limits on state and local tax deductions. We are part of the unintended consequences, but it’s a real unintended consequence.”

New York Gov. Andrew Cuomo has already threatened legal action against the proposal, according to The New York Times.

The proposed rule is a response to how states reacted to a provision in last year’s tax law that set a $10,000-a-year cap on how much Americans can deduct on their federal return for state and local taxes they paid.

Some high-tax states, such as New York, passed laws setting up charitable funds for state services and awarded tax credits for donations to those funds. The move was aimed at preserving a higher federal tax deduction for residents of those states because a charitable deduction is not subject to the cap.

A tax credit directly reduces the taxes someone owes the state.

The proposed rule would largely exclude donations that are essentially refunded with state tax credits from being deducted on federal tax returns as a charitable contribution.

“You have some states that are trying to game the system by getting money for state services by calling it a donation,” said state Rep. Chuck Martin, R-Alpharetta, a director with the tax services business Ryan. “What they have done is broken the system for rural hospital tax credits.”

The change will have no impact on many Georgians because they don’t itemize their deductions when they file their tax returns.

“For about 90 percent of people who are just claiming the standard deduction, this (rule) isn’t going to have any impact at all,” said Carl Davis, the research director with the Institute on Taxation and Economic Policy in Washington.

Davis co-wrote a paper last year that said high-income earners were using tax credit programs such as Georgia’s to turn a “profit.” They reduced their federal tax burden by taking a charitable deduction for the money they contributed, which they got back on their state taxes through the credit. It’s something taxpayers using the standard deduction can’t do, he said.

If the rule goes into effect, only those who are willing to contribute without getting ahead financially will continue doing so, he said. “It’s going to weed out the opportunists.”

Martin said most people aren’t giving to things such as the rural hospital program or student scholarship organizations to get a tax break. They believe in the cause, and many if not most will give, whether they get the federal tax break or not, he said.

But the American Federation for Children, which advocates for vouchers and other “school choice” initiatives, opposes the proposed rule, saying it will “harm” tax credit scholarship programs.

“This will reduce charitable contributions to scholarship granting organizations,” John Schilling, the organization’s president, said in a statement.

He predicted accountants would tell their clients to stop donating to these groups “because of a reduced tax benefit,” reducing the number of scholarships available.

EdChoice, another school choice group, likened the IRS action to taking “a sledgehammer to a nail, overreaching in a way that will hurt children.”

Georgia is among a dozen states where taxpayers receive a full federal charitable deduction when they also get a state credit for donations to private schools, said the National Coalition for Public Education, which sees the proposed rule as a good thing. The advocacy group called the federal deduction a “subsidy for private schools that comes at the expense of public schools.”

The Georgia Supreme Court disagrees, ruling last year in a unanimous decision that said, in effect, that tax credits do not equate to an expenditure of public funds.

The General Assembly increased the amount of tax credits going to the private school scholarship programs during the 2018 session after several years during which the tax credits were spoken for on the first day they were made available. The same thing happened with the tax credits for rural hospitals this year.

Supporters of the rural hospital tax credit say there is a cause and effect when it comes to the amount of benefit donors receive. Two years ago, donors could get a state tax credit worth 70 percent of what they donated to the program. Because few contributed, lawmakers changed it to 90 percent, but the program didn’t hit the $60 million cap until legislators offered a dollar-for-dollar credit on taxes for money donated to the program.

“The only reason the rural hospital tax credit reached the statewide maximum this year is because the (federal) tax plan created a need for big wage earners to find a new deduction vehicle,” Howard Holman, a member of the foundation for Vidalia’s Meadows Regional Medical Center, wrote in an email to The Atlanta Journal-Constitution.

He said a chunk of the donations may dry up without the federal tax break.

Davis, the researcher director in Washington, said the proposed rule will likely see some changes after going through a 45-day comment period. He predicted that will happen around the beginning of tax season next year. Taxpayers who contributed earlier this year will be unaffected, he said, but federal officials sent a strong signal with this proposed change that “this loophole that has actually been described by some accountants as too good to be true may not be around much longer.”


THEN: Supporters of a tax credit that benefits rural hospitals in Georgia had hoped to increase its cap from $60 million to $100 million after the credits were quickly claimed by donors once the match was raised to 100 percent. A similar tax credit that funds private school scholarships for students was increased this past year to $100 million.

NOW: A proposal from the U.S. Treasury Department and the Internal Revenue Service would limit and in many cases eliminate federal tax deductions for giving to such state programs.

NEXT: Changes could be made to the proposal during a 45-day comment period. Also, some states are considering legal action to block the proposal.

Stay on top of what’s happening in Georgia government and politics at ajc.com/politics.

Read More


  • In a series of tweets Friday, President Donald Trump announced new retaliatory tariffs against China, bumping up taxes by 5 percentage points.  >> MORE: China, Trump ratchet up tensions with new tariffs >> Read more trending news  Here’s a look at trade tariffs and what they do. What is a tariff? A tariff is a tax on imports or exports that increases their prices. Tariffs are used by governments to make foreign products less attractive to consumers in order to protect domestic industries from competition. Money collected under a tariff is called a duty or customs duty. What types of tariffs are there? There are two types of tariffs – an ad valorem tariff and a specific tariff. An ad valorem tariff is a tariff that is a fixed percentage of the value of an imported good. If the price of the imported good goes up, the ad valorem tariff goes up. If it goes down, the tariff goes down. For instance, if a company exports an item to the United States costing $50 and the ad valorem tariff on that product is 20 percent, the company would have to pay the tariff -- $10 in this case -- to export the product to the U.S. If the price of the item goes up to $75, the company will have to pay a tariff of $15 to sell the item in the US. A specific tariff is a fixed amount of money placed on the item no matter the cost. Say there is a $20 specific tariff on that $50 item. The company exporting the item to the US would have to pay $20 to sell the item in the U.S. If the item goes up in cost to $75, the company will still have to pay $20 to export the item. Why should I care if the US government puts a tariff on items? The manufacturer pays for that, right? Sure, manufacturers pay the tariff upfront, but the cost of the tariff will be passed along to the consumer. Or, if the cost of the tariff is too high for those exporting goods, then they stop exporting goods. Tariffs affect the cost of goods you buy, and the U.S. buys many more products than it sells. In April, the U.S. sold $211.2 billion in goods to other countries, according to the Bureau of Economic Analysis, and purchased $257.4 billion worth of goods from other countries. So, why slap tariffs on goods if it will hurt the US consumer? The theory is that as goods made by people outside the U.S. get more expensive, manufacturers within the country will either increase their production of the product  or other companies will begin to produce the product, thus strengthening the U.S. economy. What happened with tariffs surrounding the G-7 summit in Canada, and why are U.S. allies angry at Trump? Trump left the G-7 summit early on the way to his summit with North Korean leader Kim Jung-un. He tweeted from Air Force One that he was withdrawing his support for a communique (or agreement) crafted during the summit. The agreement referenced shared priorities among the seven allies, such as their standing on trade, sustainability and national security. Where do the hard feelings about tariffs come in?  In the days prior to the meeting, the United States imposed a 25 percent tariff for steel and 10 percent tariff for aluminum on imports from Canada, the European Union (EU) and Mexico. Trump claimed the move was made to protect US security. Trump also complained about Canada’s tariffs on dairy products. Canada levies a tariff of 270 percent on milk, 245 percent on cheese and 298 percent on butter. The tariffs are in place to protect the Canadian dairy industry, effectively eliminating any foreign competition. In his tweet about withdrawing support for the communique, Trump criticized Canadian Prime Minister Justin Trudeau, calling him “weak and dishonest” for his comments about the U.S. tariffs on steel and aluminum. Trudeau responded by announcing that Canada will impose retaliatory tariffs on $12.8 billion worth of US goods including yogurt, beer kegs, non-decaffeinated coffee, steel rods, sleeping bags, toilet paper, plywood, bobbins, “Combined refrigerator-freezers, fitted with separate external doors” and scores of other items. The EU has promised similar tariffs against the United States.
  • A man who survived five days lost in the wilderness on the Montana-Idaho border said he pulled through, in part, because he promised his pregnant wife he'd return home safe. >> Read more trending news  Kaden Laga, 25, of Utah, was backpacking with his family when one of their horses went lame, Laga told KPAX-TV. Laga volunteered to hike ahead of the group to the trailhead. But he took a wrong turn and wasn't able to find the trail. After a few hours, Laga realized he was lost. Hours turned into days. On his first night alone, Laga was wet and cold, and didn't think he'd survive. He wrote a text to his wife, Arden, on his phone. “I wrote a little text in case they found my body cold,” he told KSTU-TV. “I just said, ‘In case I don’t make it out of here, I love you. I loved my life with you and I’m so sorry I left you to be a single mom.’” But Laga said he was determined to be reunited with his family. Before he had left on the trip, Arden had told him, 'You better promise me that you come home safe,'' Laga told KSTU-TV. Laga drank water from streams and ate berries and crickets. One day, he noticed helicopters flying overhead. “I’m like, 'This is it, they’re going to get me,' and they just take off into the other direction,” he said. Laga realized the searchers couldn't see him, so he continued hiking to try to find a way out. Finally, around 1 a.m. on Aug. 16, he stumbled upon a campsite. Volunteers helped Laga down the mountain, and he was reunited with his family the next day. Laga kept his promise to his wife. The couple told KPAX-TV they plan to name their baby boy after one of the rescuers.
  • An irate customer was arrested Tuesday after pounding on a fast-food restaurant’s drive-thru window while threatening employees and yelling obscenities, police said. >> Read more trending news Jonathan Gullett, 31, was upset about an order around 10 p.m. and was asked to leave a fast-food restaurant at Nitro Marketplace, WSAZ reported. Police said Gullett placed a drive-thru order, pulled around and paid. As he was waiting, he started yelling and hitting the drive-thru window.  When the manager opened it, Gullett told her he was upset about items missing from an order earlier in the day. The manager asked to see a receipt. He did not have one, so she told him there was nothing she could do.  This made Gullet more upset, investigators said. The manager shut the window, called 911 and showed Gullet the phone. Gullett drove off, parked at a nearby restaurant and walked back, police said. The manager locked the restaurant doors before Gullett returned.  When investigators arrived, Gullett was pounding on the drive-thru window, blocking customers, shouting obscenities and yelling about how he wanted to kill the restaurant employees, WSAZ reported.  Gullett was arrested and charged with threats of terrorist acts. He is being held on $5,000 bail. 
  • The nation's first death possibly linked to vaping has been confirmed by the Centers for Disease Control and Prevention. The Illinois Department of Public Health says an adult person who recently vaped died after being hospitalized with 'severe respiratory illness.' The agency didn't give any other information about the patient, including a name or where the person lived. The CDC says there are currently 193 potential cases in 22 states, including Georgia. Patients reported similar symptoms – shortness of breath, chest pain, cough, and vomiting in some cases – and some were admitted to the intensive care unit.
  • An 8-year-old boy was bitten on the head Wednesday night by a mountain lion, Colorado wildlife officials said. >> Read more trending news The boy was jumping on a trampoline with his brother around 7:30 p.m. when a friend called to him from a nearby house, Colorado Parks and Wildlife said in a release. When the boy ran to visit the friend, he was attacked by the mountain lion. “The kid was running, and it probably triggered the lion’s natural response to a prey animal running,” Mark Lamb, wildlife manager, said in a release. “We all hope that the child will be alright, and you just hate to see this occur.' The boy’s brother ran inside and told their father something was wrong. The father came out, found the animal on top of his son and scared off the mountain lion.  “He did what a father would do, run out and protect his son knowing that he was in trouble,” Jason Clay, parks spokesman, told KCNC. “The father saved his son’s life.” The boy was taken to a hospital, where he was in serious but stable condition, KCNC reported.  Because the animal attacked a human, it must be euthanized, wildlife officials said. They set traps and used dogs to try and track the mountain lion.  On Thursday, a homeowner realized one of his goats was missing, saw two mountain lions and called wildlife officials. Officers were already in the area, which was about a mile from where the boy was attacked. They captured and euthanized the animals, which were about 12 months old and 65 pounds. A necropsy will be conducted to determine if they are the same lions involved in the boy’s attack. “That is how we would be able to confirm with absolute certainty that we got the mountain lion from the attack,” wildlife officials said. Because the mountain lions were feeding on livestock, they can be euthanized. If a mountain lion is captured alive in a trap, it will be kept alive until DNA samples are tested. If the results are negative, the lion will be relocated, officials said.  Officials are still monitoring mountain lion activity in the area but do not have plans to actively search for them. Mountain lions have attacked humans 22 times since 1990, with three attacks coming this year, officials said. A trail runner was attacked Feb. 4 and there was another attack Aug. 10. The last year there had been a mountain lion attack was 2016. The last time there were three attacks in a year was 1998. “We don’t want people to panic, they are very aware of all the wildlife that lives around them, but the proper precautions need to be taken,” Lamb said in a statement. “There are obligations that people must be committed to for living responsibly with wildlife.” Three more mountain lions were seen on the property where the goats went missing Friday, but no more goats have gone missing since.
  • According to many polls, Americans – especially those who say they are Democrats -- are not that fond of the Electoral College. Neither are many of the Democratic candidates for president. >> Read more trending news  With just over 14 months until the 2020 presidential election, a movement to change the way electoral votes are awarded and who will be elected president has gained some steam. The National Popular Vote Compact (NPV), which has its roots in the most contested presidential election in U.S. history, sets in state law a policy that awards all a state’s electoral votes to the candidate who wins the national popular vote. Under the Electoral College system used today, 48 states have a “winner-take-all” system that awards all the state’s electoral votes to the person who gets a majority of votes in that state. The Electoral College does not take into consideration that national popular vote. Sixteen states, along with the District of Columbia, have passed the NPV agreement. They are California, Colorado, Connecticut, Delaware, Hawaii, Illinois, Massachusetts, Maryland, New Jersey, New Mexico, New York, Oregon and Rhode Island. While legislation has been passed in the 16 states and the District of Columbia, the agreement would not go into effect until states with a collective 270 electoral votes — the number needed to win the presidency — agree to join. Currently, the District of Columbia and the 16 states in the agreement hold a combined total of 196 electoral votes, meaning the pact would need enough new state members to get 74 electoral votes.Supporters say the system would give the person who got the most votes country-wide the presidency he or she deserves. Opponents say states would be forced to hand over electoral votes to a candidate who did not win that state. For instance, in the 2016 election, a state such as Florida, in which President Donald Trump earned more votes, would have had to pledge its 29 electoral votes to Trump’s opponent, Hillary Clinton, who won the national popular vote in the 2016 election. The Electoral College of today was established by the Twelfth Amendment to the Constitution which replaced the method for electing the president and vice president provided in Article II, Section 1, Clause 3. Under the system, when voters cast a ballot for president, they are actually choosing members of the Electoral College, called electors, who are pledged to that presidential candidate. Following the election for president, electors then meet to choose the president. Electors almost always vote for their state’s popular vote winner, and some states have laws requiring them to do so. However, electors are not bound by federal law to vote for a specific candidate – for instance, the one who won the popular vote in their state. In 29 states and the District of Columbia, electors are bound by state law or by a pledge they sign to vote for the candidate who won the popular vote of the state they represent. Five men have won the presidency in the Electoral College while not winning the country’s popular vote: John Quincy Adams in 1824, Rutherford B. Hayes in 1876, Benjamin Harrison in 1888, George W. Bush in 2000 and Donald Trump in 2016. The National Popular Vote campaign goes back to Democratic presidential candidate Al Gore's loss to Bush in 2000, according to The Associated Press. Gore won the popular vote but lost the election over a vote count in Florida.