State And Local Tax Policy To Watch In 2019

Law360 (January 1, 2019) 2018 may have been one of the most momentous years for tax policy in decades, but practitioners say an increasing number of legislatures under one-party political control and a push for new forms of local taxation will be among the top drivers of tax policy debate in the year to come. Here, Law360 highlights the biggest state and local tax policy issues to watch in 2019. “I think the first quarter will see quite a bit of activity of new opportunity zone funds being created,” said Michael Pruter, a partner and specialist in tax and real estate at Allen Matkins Leck Gamble Mallory & Natsis LLP. As much as Pruter and other practitioners expect the U.S. Treasury to issue a new set of opportunity zone guidance late this year or early next year, he said there’s still no guarantee that California — or other states for that matter — will go along with the tax incentives on the state level. “We are waiting to see if California complies,” Pruter said. “In a normal world, they would. But they’re definitely in need of revenues, so we are not sure.” He noted that noncompliance by California or other states would reduce the overall tax benefits and, in turn, the benefit to would-be investors.