Bramwell's Lunch Beat: States with the Highest Property Tax Rates

Aug 17th 2015
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lunch beat

How high are property taxes in your state?
The Tax Foundation put out a map last week presenting effective tax rates on owner-occupied housing in each of the 50 states, plus the District of Columbia. “This is the average amount of residential property tax actually paid, expressed as a percentage of home value,” Jared Walczak wrote in a blog for the Tax Foundation. “Some states with high property taxes, like New Hampshire and Texas, rely heavily on property taxes in lieu of other major tax categories; others, like New Jersey and Illinois, impose high property taxes alongside high rates in the other major tax categories.”

The five states with the highest effective property tax rates are:

  1. New Jersey (2.38 percent)
  2. Illinois (2.32 percent)
  3. New Hampshire (2.15 percent)
  4. Connecticut (1.98 percent)
  5. Wisconsin (1.96 percent)

The five states/jurisdictions with the lowest effective property tax rates are:

  1. Hawaii (0.28 percent)
  2. Alabama (0.43 percent)
  3. Louisiana (0.51 percent)
  4. Delaware (0.55 percent)
  5. District of Columbia (0.57 percent)

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Citigroup to pay $180 million over crisis-era hedge fund fraud
Citigroup Inc. agreed to pay almost $180 million to settle US Securities and Exchange Commission (SEC) allegations that it defrauded clients of two failed hedge funds by telling them the investments were low-risk, wrote Matt Robinson of Bloomberg. Citigroup units made false and misleading statements to investors about the funds, which raised almost $3 billion from 2002 to 2007, the SEC said in a statement on Monday. Before the funds collapsed in 2008, Citigroup had described them as “safe” and “bond substitutes.” Andrew Ceresney, director of the SEC's enforcement division, said in a statement that advisors at these Citigroup affiliates “were supposed to be looking out for investors' best interests, but falsely assured them they were making safe investments even when the funds were on the brink of disaster.” In settling the matter, Citigroup neither admitted nor denied the SEC's allegations.

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Shareholder board push leads to positive returns
Emily Chasan of CFO Journal wrote that investors have new ammunition in the fight to place directors on company boards: improved financial performance. Just the consideration of having shareholders nominate their own directors helps a company's overall return by half a percentage point, according to new findings by researchers at the SEC. Companies generally nominate candidates of their own choosing for director slots; however, investors holding at least 3 percent of stock can seek to nominate a slate of directors comprising up to a quarter of the board. But SEC economics researchers were able to quantify the 0.5 percent uptick from proxy access by controlling for broader market returns and governance factors, such as number of independent board members a company had.

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Deutsche Bank employees said to be charged in carbon tax probe
Frankfurt prosecutors charged seven current and one former Deutsche Bank AG employees over a scheme to help the lender and clients evade taxes on carbon-emissions trades, wrote Nicholas Comfort of Bloomberg. The bankers are charged with being part of a group that tricked the authorities about value-added tax refunds on carbon-emissions trading in 2009 and 2010, Alexander Badle, a spokesman for prosecutors, said on Aug. 13 without naming the bank. The lender is Deutsche Bank, according to people familiar with the case. Frankfurt-based Deutsche Bank said in a statement that it's still investigating the allegations while “cooperating with all the relevant authorities.” A court must now rule on whether the charges, which could carry penalties of as much as 15 years in prison, may go to trial.

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IRS technical guidance roundup (week of Aug. 10)
The IRS issued the following technical guidance last week:

Notice 2015-55 provides guidance on the corporate bond monthly yield curve, the corresponding spot segment rates used under section 417(e)(3), and the 24-month average segment rates under section 430(h)(2) of the Internal Revenue Code. In addition, this notice provides guidance as to the interest rate on 30-year Treasury securities under section 417(e)(3)(A)(ii)(II) as in effect for plan years beginning before 2008 and the 30-year Treasury weighted average rate under section 431(c)(6)(E)(ii)(I). The rates in this notice reflect the application of section 430(h)(2)(C)(iv), which was added by the Moving Ahead for Progress in the 21st Century Act, Public Law 112-141 (MAP-21) and amended by section 2003 of the Highway and Transportation Funding Act of 2014, Public Law 113-159 (HATF).

Notice 2015-56 informs claimants about the federal income tax treatment of credits under § 6426(c) and (d) that are paid in cash under the one-time claim submission process of section 160(e) of the Tax Increase Prevention Act of 2014 and implemented by Notice 2015-3. Specifically, a claimant must reduce its income tax deduction for (or cost of goods sold deduction attributable to) § 4081 excise taxes (or, if applicable, § 4041 excise taxes) for each calendar quarter during 2014 by the amount of the § 6426(c) credit (or, if applicable, § 6426(d) credit) for fuel mixtures sold or used during that calendar quarter.

Revenue Procedure 2015-40 provides guidance on the process of requesting and obtaining assistance under US tax treaties from the US Competent Authority, acting through the Advance Pricing and Mutual Agreement Program and the Treaty Assistance and Interpretation Team of the Deputy Commissioner (International) Large Business and International Division of the IRS.

Revenue Procedure 2015-41 provides guidance on the process of requesting and obtaining an advance pricing agreement.

Announcement 2015-22 states that the IRS will not assert that an individual whose personal information may have been compromised in a data breach must include in gross income the value of the identity protection services provided by the organization that experienced the data breach. Additionally, the IRS will not assert that an employer providing identity protection services to employees whose personal information may have been compromised in a data breach of the employer's (or employer's agent or service provider's) recordkeeping system must include the value of the identity protection services in the employees' gross income and wages.

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