New York State:
- New York state’s tax code would undergo the most sweeping overhaul in decades under much anticipated legislation proposed by Gov. Andrew M. Cuomo (D) Feb. 15. The legislation, submitted to the Legislature for approval as part of the FY 2019 state budget, would shift tax liability for many New Yorkers from the personal income tax to a new payroll tax and two charitable funds. It would also decouple the state tax code from the federal code to address a number of tax conformity issues that would cause the state to reap a $1.5 billion windfall. Read more from Bloomberg BNA here. Read Governor Cuomo’s summary of proposed amendments to his F.Y. 2019 Executive Budget here.
- A tax credit program that helps restore and reuse old buildings and put them back on the property tax rolls could be pared back under a plan being debated in the Missouri Senate. Less than two months after Republican President Donald Trump trumpeted the use of the tax credits to rebuild a part of historic downtown St. Charles, the GOP-controlled Senate launched into a debate Monday over legislation that would reduce in half the amount of tax credits that can be issued for upgrades to historic structures. Read more at The St. Louis Post-Dispatch.
- Even as Missouri’s Republican governor hits the road to promote his $800 million tax overhaul proposal, a Republican-led Senate panel has endorsed its own tax cut plan worth an estimated $630 million. The 421-page Senate version endorsed February 20 by the Ways and Means Committee is likely to become the basis for further talks with Democrats and members of the House, who are working on their own tax reduction plan, the St. Louis Post-Dispatch reported. Read more at the Columbia Daily Tribune.
- Joining the ongoing Missouri tax reform debate, Rep. Elijah Haahr proposes significant individual and corporate income tax cuts and higher fees for driver's licenses and vehicle registration. Haahr, R-Springfield, filed his bill the morning of February 22. His legislation will join existing proposals from Republican Gov. Eric Greitens and GOP lawmakers in the state Senate and will fuel the conversation about what Missouri's laws should look like following tax code changes in Washington, D.C. Read more at the Springfield News-Ledger.
- House Democrats are proposing a 7 percent capital gains tax that would apparently hit farmers who retire from day-to-day operations, but wait to sell their land. Although Democrats propose to exempt income from farm sales, there is a catch. To qualify for the exemption, a farmer would have to run the farm up to the day of the sale. That would trip up farmers who turn management over to the next generation, but don’t sell immediately, according to the Washington Farm Bureau. The tax would apply to capital gains over $25,000 for individuals and $50,000 for couples. The Department of Revenue estimates the tax would affect 48,000 taxpayers a year. The sale of cattle, horses and breeding livestock by professional farmers also would be exempt from the tax, as would the sales of homes and, in some cases, timber. To make the tax more attractive, the capital gains tax bill also would cut property taxes for about 19,800 senior citizens, people with disabilities and some veterans. Nevertheless, the bill would increase state revenue by a projected $414.7 million over two years, beginning next year. House Democrats put the tax in their budget proposal, but the prospects of it passing this year are slim. The Democratic-controlled Senate has not included taxing capital gains in its budget proposal. Plus, the economy is generating more tax revenue than expected, making a tax increase more difficult to sell politically. Read more at The Capital Press.
- California's plan to shield residents from a tax hike under President Trump's tax plan is likely to fail, said seven former high-ranking Internal Revenue Service and Treasury Department officials. The proposal, passed by the state Senate last month, is seen as a test case for blue states trying to help their taxpayers avoid a giant increase under the GOP plan's $10,000 cap on deductions of state and local property taxes. Read more at The Washington Post.
- If St. Paul City Council members weren’t already inclined to support a city minimum wage ordinance, they received a whole batch of reasons February 21 to push them in that direction. Citing a recent report by the Metropolitan Council, the head of the Citizens League told council members that St. Paul has the region’s highest percentage of people living in poverty at 40.8 percent. The same report found that the number of Census tracts in the city identified as being areas of concentrated poverty increased from 32 in 2006-2010 to 38 in 2011-2015. Other calculations show that living costs are higher in Ramsey County than in the state, and council members already are wrestling with an ongoing shortage of affordable housing — especially for those at the lowest incomes. All make the elected officials sensitive to calls for higher wages and all were the starting points for the Citizens League study of the potential impacts as well as the likely concerns posed by a higher wage within city limits. The report was based not just on statistics but on listening sessions and interviews conducted by league staff with workers and employers, unions and industry associations, nonprofits and advocacy organizations. Read more at The Minn Post. Read the Metropolitan Council’s report here.
- State lawmakers are moving to make it harder for workers to claim retaliation if they are fired in the wake of claiming they were denied wages or legally entitled time off. On a 35-25 party-line vote, the Republican-controlled House of Representatives decided February 21 to ask voters to eliminate a provision in the voter-approved law, which spells out that if an employer takes action against a worker within 90 days of a complaint, it is presumed that the action is illegal retaliation. That can be overcome only if a company provides "clear and convincing evidence'' that the action against the worker "was taken for other permissible reasons.'' Read more at The Arizona Daily Sun.
- A bill that would have hiked the minimum wage in New Hampshire to as much as $15 per hour by 2021 has been defeated in the state Senate. The legislation, Senate Bill 554, would have gradually raised the minimum wage starting in July, with an additional bump each of three consecutive years. New Hampshire currently follows the federal minimum wage of $7.25 per hour for most workers. Under the defeated legislation, the state would have seen a hike to $9 per hour this year, $11 per hour in 2019, $13 per hour in 2020 and then $15 in 2021. Read more at Watchdog
- When the topic of raising the minimum wage in New Jersey comes up, it's common to hear the following argument: "the rest of us can't afford it." But that's a line of logic that nonprofit New Jersey Policy Perspective (NJPP) challenged on February 22 with a study dubbed "A $15 Minimum Wage Would Help Over 1 Million Workers and Boost New Jersey's Economy." According to the NJPP study, raising New Jersey's minimum wage to $15 an hour would reduce poverty while actually boosting the state's economy. How? By ensuring that more working people have more dollars to spend on essential goods and services. The workers who would benefit from a $15 minimum wage are nearly all adults, most are working full-time, many have pursued a higher education and they are raising an estimated 458,000 children. Read more at The Montclair Patch. Read the New Jersey Policy Perspective’s report here.
The Family Medical Leave Act (FMLA) was a major stride forward for the rights of workers and their families, but after a quarter of a century the program’s major gaps are clear. The FMLA does not cover about 40 percent of the workforce, including workers at smaller companies and those who have recently changed jobs. And many workers who are eligible for FMLA can’t afford to take unpaid time off from work in an emergency. They’re often left to choose between taking care of a child they love or keeping the job that puts food on the table. Today, 25 years after the FMLA was signed, a grassroots coalition of community organizations, faith groups and labor unions is advancing a pair of policies that would help fix these problems and strengthen our Commonwealth’s economy. This fall, the Raise Up Massachusetts coalition collected over 274,000 signatures from registered voters across the Commonwealth to place two questions on the November 2018 ballot: Paid family and medical leave, and an increase in the minimum wage to $15 an hour by 2022. Over the next five months, the Legislature has the opportunity to pass these policies ourselves and avoid the need for an expensive ballot campaign. I will be fighting for strong paid leave and minimum wage legislation that covers all workers, and that doesn’t hurt any single group or leave vulnerable families behind. Read more at The :Leominster Champion.
PAID FAMILY LEAVE
New Yorkers like Segura join residents of California, New Jersey, and Rhode Island who can take paid maternity, paternity, and family medical leave under statewide insurance programs. Similar legislation goes into effect in Washington state and the District of Columbia in 2020. All the programs are funded by small taxes on workers and/or employers. Other states are expected to follow in the next few years, with the most likely being Connecticut, Hawaii, Oregon, Massachusetts, and Vermont. Paid-leave legislation is also being introduced this year in Colorado, Maine, Minnesota, Montana, Pennsylvania, and Wisconsin, says Ellen Bravo, co-executive director of Family Values at Work, a nonprofit coalition of 27 national and state advocacy groups pushing for paid family leave and sick days. Read more at Consumer Reports.
FOOD & BEVERAGE
- As part of the Governor’s Budget Proposal, several changes are proposed for Alcohol Producers and sellers. Read about those proposals at JDSupra.
In Stevens v. Farmers Restaurant Group, 2018 WL 647638 (D.D.C. Jan. 31, 2018), the district court's grant of conditional certification in a wage-hour opt-in class contains important lessons for restaurants and other hospitality employers. The case shows that small but significant gains can be achieved early in a lawsuit if issues are properly presented to the court. Based on a "modest" showing of a common policy, the court allowed the plaintiff servers to proceed on a collective basis with respect to their attempt to disallow the tip credit for "close-out" work, which included rolling silver, resetting tables and also sweeping, cleaning and preparing the restaurant to open for the next day. Read more under the “Plaintiffs Not Entitled to Phone Numbers and Tip Pool Beneficiaries Not a Proper Class” title at Lexology.
- In light of the decision by the Supreme Court in the months to come, the New York State Senate Committee on Racing, Gaming and Wagering held a public hearing on January 24 to consider the potential for opening the state to legalized sports betting. The panels featured speakers from the National Basketball Association, the New York Racing Association, the New York Thoroughbred Horsemen Association, New York Thoroughbred Breeders, Inc., Sportradar, Genius Sports, William Hill US, Tioga Downs Casino Resort, the New York State Gaming Association and the New York Council on Problem Gambling. Despite small differences in opinion on what types of sports wagers should be allowed and how the industry should be governed, one thing seemed clear throughout the hearing: the question was not should New York allow sports betting, rather the question was how New York should regulate sports betting. Read more at JDSupra.
- A summary of the monthly meeting of the Illinois Gaming Board. Read more at JDSupra.
- The Supreme Court’s forthcoming decision in Christie v. National Collegiate Athletic Association (Nos. 16-476, 16-477) will have profound implications for sports betting in the United States and will potentially open the door to such betting in tribal casinos across the country. The case presents New Jersey’s challenge to the constitutionality of the Professional and Amateur Sports Protection Act (“PASPA”), a federal law enacted in 1992 to prohibit states and tribes from sponsoring or authorizing any form of sports wagering, while grandfathering the handful of states that allowed such gaming at the time of PASPA’s enactment. Several news outlets and legal commentators have noted that the Court appeared skeptical of PASPA’s constitutionality at the December 4, 2017, oral argument, and many states have taken steps in anticipation that the Court will hold PASPA unconstitutional. Since the oral argument, online betting markets on the decision have given New Jersey more than an 80 percent chance of prevailing. This alert analyzes the implications for tribal casinos if the Court strikes down PASPA. Read more at JDSupra.
- Anticipating a positive ruling from the Supreme Court in Christie vs. NCAA, legislators in Indiana have introduced a new sports wagering bill. Unfortunately, the bill includes a previously unseen poison pill in the form of a 1% “integrity fee” payable to the governing sports bodies. In other words, sports gaming operators are expected to give a 1% gross cut to the professional (and presumably amateur) sports leagues. “Integrity” fees payable to league bodies have never appeared in other legal sports wagering jurisdictions for a good reason; they will dramatically undercut the profitability of legal sports books and will drive sports gambling right back to the shadows. Read more at JDSupra.
There are numerous on-line interactive casinos that accept cryptocurrency as a medium of funding player accounts. The use of cryptocurrency presents a new enforcement challenge in jurisdictions that seeks to limit or control on-line gambling. One of the big challenges for on-line gambling companies is enabling players to move funds in and out of accounts. For the most part on-line gambling is illegal in the United States, (Unlawful Internet Gambling Enforcement Act “UIGEA”). The challenge for enforcement agencies, including taxing authorities that cryptocurrency presents is that users of cryptocurrency can move cryptocurrency freely outside the banking system and do so in relative anonymity. Sports gambling sites are likely to be the biggest beneficiaries of this alt currency. Read more at JDSupra.