Latest digital tax idea sputters

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Editor’s COLD SHOULDER: Opponents of new European taxes on U.S. tech giants seem to be getting closer to their goal of punting the issue to the OECD. The latest proposal from across the pond, a levy on revenue from online advertising earned by the likes of Google and Facebook, got a chilly reception from EU finance ministers, POLITICO Europe’s Bjarke Smith-Meyer reported. The ad tax, proposed by France and Germany, was supposed to replace a broader “digital services tax” that was headed for the dustbin. But “Skeptical finance ministers from northern Europe reacted to the new proposal with caution, retreating back to positions they held back in March when the Commission first proposed a digital services tax,” Bjarke wrote.
Foes of the European moves used the latest development to again urge any digital tax action to be left to the Organisation for Economic Co-operation and Development, which is trying to come up with a consensus on the issue among its member nations, including the U.S. Rather than “rush into” an ad tax, “we recommend the European Council oppose such a discriminatory measure and instead invest the EU’s energies toward creating a multilateral solution through the OECD,” said Dean Garfield, president and CEO of the Information Technology Industry Council, in statement. House Ways and Means Chairman Kevin Brady (R-Texas) said the proposal would amount to "double taxation" and that "countries should continue working together through the OECD framework on the important global dialogue regarding the digital economy.”
The OECD has a goal of reaching an agreement by 2020. But a consensus may be no easier to reach in that forum than it has been in the EU.
MNUCHIN, UNPLUGGED: Treasury Secretary Steven Mnuchin has joined the list of administration critics of tax credits for electric car owners. “I don’t think we need to necessarily subsidize electric cars at this point in the cycle,” Katy O’Donnell of the Pro Financial Services team relayed from Mnuchin’s appearance at The Wall Street Journal’s CEO Council Meeting. “So if people want to buy electric cars, it’s an economic decision — I think electric cars will continue to develop. ... The government has subsidized this industry; it should stand on its own. ... I think we’re looking at that, I hope it’s in the budget.”
It wasn’t clear what he meant by “the budget.” But a package of tax break extensions that includes the electric car subsidy is before the House. President Donald Trump, in his pique about GM’s massive layoffs, tweeted last week that the administration was looking at cutting off the subsidy for the auto maker, something later confirmed by White House economic adviser Larry Kudlow.
IT'S WEDNESDAY. 'Nuff said, as recently deceased comic book impresario Stan Lee was known to quip. Let us know what's going on during this very quiet week: [email protected] Twitter @brian_faler , @aaronelorenzo , and, of course, @POLITICOPro and @Morning_Tax .
REELING 'EM IN: Tax time is approaching, and the fraudsters are out in force. Tax-related phishing schemes surged by 60 percent between January and October, after declining three years in a row, the IRS says. The phishing emails demand tax payments or threaten to seize the recipient's tax refund. A recent malware campaign reported to the IRS used email subject lines including “IRS Important Notice,” “IRS Taxpayer Notice” and other variations. “The holidays and tax season present great opportunities for scam artists to try stealing valuable information through fake emails,” said IRS Commissioner Chuck Rettig, in an agency statement.
STATE NEWS POT TOWN, USA: Tiny Garden City, Colo., is seeing the sort of revenue bonanza that government officials at all levels hoped for when the state legalized recreational marijuana use. The city of 300 has been able to splurge on $3 million in infrastructure improvements “thanks to its four bustling marijuana retailers,” Stateline reported. “Before the first medical marijuana dispensary in town opened in 2009, Garden City collected about $360,000 in revenue each year, said longtime Town Administrator Cheryl Campbell. Now pot is legal for recreational use, too, and last year, the town raked in over $2 million from sales taxes alone — mostly from the sale of bud, pre-rolled joints, edibles and other pot products.”
ONE FOR THE TEAM: Bobbleheads and other swag handed out by the Cincinnati Reds aren't subject to Ohio's use tax, the state's Supreme Court ruled . "Under Ohio state law (and in most states) ... there is an exemption available to parties who resale an item to a consumer," Forbes reported. "The Reds argued that they were reselling the promotional items by including them in the ticket price - you can't get a bobblehead or other item without buying a ticket. If the club is considered a reseller of the item, it is not a taxable user and doesn't owe tax."
NETFLIX’S TURN: British authorities are examining the tax practices of Netflix, making it the latest U.S. tech gia...