ON AIR NOW

LISTEN NOW

Weather

cloudy-day
56°
Partly Cloudy
H 59° L 41°
  • cloudy-day
    56°
    Current Conditions
    Partly Cloudy. H 59° L 41°
  • cloudy-day
    59°
    Today
    Partly Cloudy. H 59° L 41°
  • rain-day
    45°
    Tomorrow
    Showers. H 45° L 39°
LISTEN
PAUSE
ERROR

Wsb news on-demand

00:00 | 00:00

LISTEN
PAUSE
ERROR

Wsb traffic on-demand

00:00 | 00:00

LISTEN
PAUSE
ERROR

Wsb weather on-demand

00:00 | 00:00

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

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.”

MORE DETAILS

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

News

  • Your favorite Girl Scout Cookies may have a different name depending on where you are located. Peanut Butter Patties are Tagalongs in some areas. Shortbread can be referred to as  Trefoils. But in one Colorado town, Samoas are not even called Caramel deLites  -- they go by the name Momoas. >> Read more trending news  Charlotte Holmberg and her marketing professional mother came up with the idea of changing the name of the chocolate cookies that are covered in caramel and coconut to Momoas, KUSA reported. To seal the deal, they pasted a photo of “Aquaman” actor Jason Momoa on the box, the television station reported.  They put the word out on Facebook about the change for the favorite cookie, and they’ve been selling like hotcakes. “The moms are getting really excited and they’re saying they need them,” Charlotte told KUSA.
  • President Donald Trump declared a national emergency Friday in order to fund a wall along the southern border of the United States. >> Read more trending news  Trump is not the first president to declare a national emergency.  There have been 58 national emergencies since the act went into effect – every president since Jimmy Carter has declared at least one national emergency. Here, from the Brennan Center for Justice, is a list of those emergencies:  President Jimmy Carter Nov. 14, 1979 (still in effect): A national emergency in response to the Iran hostage crisis, blocking Iranian government property. April 17, 1980: Further prohibitions on transactions with Iran. It has never been terminated nor continued. President Ronald Reagan Oct. 14, 1983: Continuation of Export Control Regulations, revoked in 1983. March 30, 1984: Continuation of Export Control Regulations, revoked in 1985. May 1, 1985: Prohibiting Trade and Certain Other Transactions Involving Nicaragua, revoked in 1990. Sept. 9, 1985: Prohibiting Trade and Certain Other Transactions Involving South Africa, revoked 1991. Jan. 17, 1986: Prohibiting Trade and Certain Transactions Involving Libya, revoked in 2004. April 8, 1988: Prohibiting Certain Transactions with Respect to Panama, revoked in 1990.   President George H.W. Bush Aug. 2, 1990: Blocking Iraqi Government Property and Prohibiting Transactions with Iraq, revoked in 2004. Sept. 30, 1990: Continuation of Export Control Regulations, revoked in 1993. Nov. 16, 1990: Chemical and Biological Weapons Proliferation, revoked in 1994. Oct. 4, 1991: Prohibiting Certain Transactions with Respect to Haiti, revoked in 1994. May 30, 1992: Blocking 'Yugoslav Government' Property and Property of the Governments of Serbia and Montenegro, revoked in 2003. President Bill Clinton Sept. 26, 1993: Prohibiting Certain Transactions Involving UNITA, revoked in 2003. Sept. 30, 1993: Measures to Restrict the Participation by United States Persons in Weapons Proliferation Activities, revoked in 1994. June 30, 1994: Continuation of Export Control Regulations, revoked in 1994. Aug. 19, 1994: Continuation of Export Control Regulations, revoked in 2001. Sept. 29, 1994: Measures to Restrict the Participation by United States Persons in Weapons Proliferation Activities, revoked in 1994. Oct. 25, 1994: Blocking Property and Additional Measures With Respect to the Bosnian Serb- Controlled Areas of the Republic of Bosnia and Herzegovina, revoked in 2003. Nov. 14, 1994 (still in effect): Proliferation of Weapons of Mass Destruction, continued in November 2018. Jan. 23, 1995 (still in effect): Prohibiting Transactions with Terrorists Who Threaten to Disrupt the Middle East Peace Process, continued in January 2018. March 15, 1995 (still in effect): Prohibiting Certain Transactions with Respect to the Development of Iranian Petroleum Resources, continued in March 2018 and expanded in August 2018. Oct. 21, 1995 (still in effect): Blocking Assets and Prohibiting Transactions with Significant Narcotics Traffickers, continued in October 2018. March 1, 1996 (still in effect): Regulation of the Anchorage and Movement of Vessels with Respect to Cuba, modified by President Obama in 2016 and again by President Trump in February 2018. May 22, 1997: Prohibiting New Investment in Burma, terminated in October 2016. Nov. 3, 1997 (still in effect): Blocking Sudanese Government Property and Prohibiting Transactions with Sudan, continued in October 2018. June 9, 1998: Blocking Property of the Governments of the Federal Republic of Yugoslavia (Serbia and Montenegro), the Republic of Serbia, and the Republic of Montenegro, and Prohibiting New Investment in the Republic of Serbia in Response to the Situation in Kosovo, revoked in 2003. July 4, 1999: Blocking Property and Prohibiting Transactions with the Taliban, revoked in 2002. June 21, 2000: Blocking Property of the Government of the Russian Federation Relating to the Disposition of Highly Enriched Uranium Extracted from Nuclear Weapons, expired in 2012. Jan. 18, 2001: Prohibiting the Importation of Rough Diamonds from Sierra Leone, revoked in 2004. President George W. Bush June 26, 2001 (still in effect): Blocking Property of Persons Who Threaten International Stabilization Efforts in the Western Balkans, continued in June 2018. Aug. 17, 2001 (still in effect): Continuation of Export Control Regulations, continued August 2018. Sept. 14, 2001 (still in effect): Declaration of National Emergency by Reason of Certain Terrorist Attacks, continued in September 2018. Sept. 23, 2001 (still in effect): Blocking Property and Prohibiting Transactions with Persons who Commit, Threaten to Commit, or Support Terrorism, continued in September 2017. March 6, 2003 (still in effect): Blocking Property of Persons Undermining Democratic Processes or Institutions in Zimbabwe, continued in March 2018. May 22, 2003 (still in effect): Protecting the Development Fund for Iraq and Certain Other Property in Which Iraq has an Interest, continued in May 2018. May 11, 2004 (still in effect): Blocking Property of Certain Persons and Prohibiting the Export of Certain Goods to Syria, continued in May 2018. July 22, 2004: Blocking Property of Certain Persons and Prohibiting the Importation of Certain Goods from Liberia, revoked in November 2015. Feb. 7, 2006: Blocking Property of Certain Persons Contributing to the Conflict in Côte d'Ivoire, terminated in September 2016. June 16, 2006 (still in effect): Blocking Property of Certain Persons Undermining Democratic Processes or Institutions in Belarus, continued in June 2018. Oct. 27, 2006 (still in effect): Blocking Property of Certain Persons Contributing to the Conflict in the Democratic Republic of the Congo, continued in October 2018. Aug. 1, 2007 (still in effect): Blocking Property of Persons Undermining the Sovereignty of Lebanon or Its Democratic Processes and Institutions, continued in July 2018. June 26, 2008 (still in effect): Continuing Certain Restrictions With Respect to North Korea and North Korean Nationals, continued in October 2018. President Barack Obama Oct. 23, 2009: Declaration of a National Emergency With Respect to the 2009 H1N1 Influenza Pandemic was never terminated or continued. April 12, 2010 (still in effect): Blocking Property of Certain Persons Contributing to the Conflict in Somalia, continued in 2018. Feb. 25, 2011 (still in effect): Blocking Property and Prohibiting Certain Transactions Related to Libya, continued in February 2018. July 24, 2011 (still in effect): Blocking Property of Transnational Criminal Organizations, continued in July 2018. May 16, 2012 (still in effect): Blocking Property of Persons Threatening the Peace, Security, or Stability of Yemen, continued in May 2012. June 25, 2012: Blocking Property of the Government of the Russian Federation Relating to the Disposition of Highly Enriched Uranium Extracted from Nuclear Weapons, revoked in 2015. March 6, 2014 (still in effect): Blocking Property of Certain Persons Contributing to the Situation in Ukraine, continued in March 2018. April 3, 2014 (still in effect): Blocking Property of Certain Persons With Respect to South Sudan, continued in March 2018. May 12, 2014 (still in effect): Blocking Property of Certain Persons Contributing to the Conflict in the Central African Republic, continued in May 2018. March 8, 2015 (still in effect): Blocking Property and Suspending Entry of Certain Persons Contributing to the Situation in Venezuela, continued in March 2018. April 1, 2015 (still in effect): Blocking the Property of Certain Persons Engaging in Significant Malicious Cyber-Enabled Activities, continued in March 2018. Nov. 22, 2015 (still in effect): Blocking Property of Certain Persons Contributing to the Situation in Burundi, continued in November 2018. President Donald Trump Dec. 20, 2017: Blocking the Property of Persons Involved in Serious Human Rights Abuse or Corruption. Sept. 12, 2018: Imposing Certain Sanctions in the Event of Foreign Interference in a United States Election. Nov. 27, 2018: Blocking Property of Certain Persons Contributing to the Situation in Nicaragua.
  • A day after a Commerce Department report was submitted to President Donald Trump on the possibility of a national security declaration involving tariffs on imported automobiles, lawmakers in Congress joined automobile manufacturers and free trade groups in urging the White House not to embrace new tariffs amid renewed fears of growing trade tensions involving the U.S. “President Trump is right to seek a level playing field for American businesses and workers, but the best way to do that is with a scalpel, not an axe,” said Rep. Jackie Walorski (R-IN), who led almost 150 lawmakers last summer in warning against new tariffs on imported autos and auto parts. “Broad-based auto tariffs would lead to retaliatory measures by our trading partners,” Walorski added, warning against action by the President on what’s known as a Section 232 national security investigation related to auto imports. “Beyond just the absurdity of labeling the car in your driveway a national security threat, taxing autos through tariffs would have clear economic consequences,” said the group Tariffs Hurt the Heartland, as a variety of trade groups weighed in against new duties. “Auto #tariffs are a tax on American workers and consumers. A tariff will raise the price of cars and motor vehicle parts, strain family budgets and reduce car sales & vehicle repairs.” Our statement on the conclusion of the Section 232 auto investigation: https://t.co/03rNww4369 — DrivingAmericanJobs (@DrivingUSAJobs) February 18, 2019 During his time in office, President Trump has made clear he’s more than ready to levy new tariffs on imported goods from China, Canada, Mexico, and the European Union. “Well, you know, you’re talking to the wrong person, because I happen to like tariffs, okay?” the President said to reporters when asked Friday about possible new tariffs on China, as he defended tariffs placed on imported steel. With the submission of this latest Section 232 report on autos, President Trump now has 90 days to determine whether to levy new tariffs, which experts believe would hurt European automakers the most – Volkswagen, Mercedes-Benz, Audi, BMW, and others. “New tariffs/taxes would be devastating for our auto jobs and American consumers,” said Sen. Doug Jones (D-AL), whose state sports auto production plants for Mercedes-Benz, Honda, Toyota, and Hyundai. “Not only are tariffs a tax but experts agree: cars are not a national security threat,” Jones added in a tweet about the new Commerce 232 report. The European Union on Monday vowed ‘swift’ retaliation if the President slaps tariffs on imported autos and auto parts – what some fear would create a quickly escalating trade war. The administration of President @realDonaldTrump has resumed threats to put additional tariffs on European automakers, thus exacerbating the trade wars. #Tradewar #TradeWars #SP500 #DJIA #NASDAQ #Indices #Stocks #tariffs #autotariffs #Nafta #USMCA #NationalSecurity pic.twitter.com/AMCfl9oVi5 — AvaTrade (@AvaTrade) February 18, 2019 The President has already used his ‘national emergency’ authority under Section 232 to levy 25 percent tariffs on imported steel, and 10 percent on imported aluminum. “You know, you can do without certain industries. Our country cannot do without steel,” Mr. Trump said Friday, as he made clear he would press for additional tariffs on China, using those duties as leverage for trade talks. “I love tariffs, but I also love them to negotiate,” the President added. “I urge the president and his administration not to take any action that would threaten our nation’s economic momentum,” Rep. Walorski warned on Monday. Many lawmakers and auto groups wonder if the same thing my happen in their part of the economy soon as well.
  • California authorities said an Uber driver was asked to deliver a box of sneakers that also contained fentanyl, the San Francisco Chronicle reported.  >> Read more trending news  On Feb. 9, the Uber driver received a notification that a female passenger wanted to be driven from San Francisco to Tiburon, the newspaper reported. When the driver arrived at the San Francisco location, he was instead greeted by a man who asked him to the deliver the shoebox to the woman, who was already in Tiburon, KRON reported. The driver hesitated before agreeing to deliver the shoebox, the television station reported. The driver told authorities he became concerned about the box’s contents after the ride request was canceled, the Chronicle reported. After crossing the Golden Gate Bridge, the driver spotted some deputies and asked for help, Marin County sheriff’s spokesman Sgt. Brenton Schneider told KPIX. Deputies examined the box and found sneakers with fentanyl in the right shoe, the Chronicle reported. No arrests have been made. Authorities are looking for the man and woman who requested the ride and the delivery, the newspaper reported.
  • A Louisiana man was arrested Friday for calling police on other officers who pulled over his car, authorities say. According to the Thibodaux Police Department, a traffic stop occurred in Thibodaux, Louisiana, around 1 a.m. WGNO reported that officers saw the vehicle’s driver commit a moving violation.  >> Read more trending news  Bryce Quanstrom, 22, was seen running shirtless toward the stop, saying he was the owner of the vehicle. Authorities said he was not in the vehicle and it was not clear where he came from. Officers told Quanstrom to stay back, and he began threatening to call 911 on the officers and shouting expletives at them. Police advised him not to do so, warning him of the consequences if he did, according to the department.  Quanstrom called 911 anyway, telling the dispatcher he needed officers to come to his location.  Authorities said Quanstrom continued shouting profanities when he was arrested. WDSU reported he was arrested for unlawful use of the 911 system. “Chief (Bryan) Zeringue would like to remind all citizens that the use of the 9-1-1 system and using it correctly is very important,” the department said. “Also, please refrain from approaching officers while they are conducting business in the scope of their duties and/or actively investigating a traffic stop. Be sure to obey officer’s commands. Chief Zeringue takes the safety of our officers and citizens very seriously and any violator will suffer ramifications.” Officials said posted bond after being taken to Lafourche Parish Correctional Complex.
  • A marriage proposal in a room filled with swine may not seem ideal, but a Texas man was perfectly willing to hog the attention away from the pigs Sunday morning. >> Read more trending news  Will Hussey made his “pig-posal” to Kate Jimerson at the San Antonio Stock Show and Rodeo, KSAT reported. Hussey’s marriage proposal came four years after they met at the show’s swine barn, the television station reported. Jimerson thought her family was at the Stock Show to watch her younger sister compete in the barrow show, but Hussey surprised her. 'He got down on one knee and said, 'This is where I met you four years ago. I knew then I wanted to marry you.'” Jimerson told KSAT. “So then he asked me and I started crying.” 'The Stock Show already holds a special place for both of us, so why not make it something we can tell our kids about someday,' Hussey told the television station. The couple has not set a wedding date, but they already have next year’s Stock Show on their calendar, KSAT reported.