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Budget and Revenue Committee

Federal Budget and Revenue Update

April 25, 2006
Volume 12, No. 4

An Information Service of the NCSL Budgets and Revenue Committee

Back Issues Archive

NCSL Spring Forum

NCSL held its Spring Forum in Washington, DC in early April. While the Budgets and Revenue Committee did not adopt any policies, a number of policies which may be of interest were adopted by other committees.

The Communications, Technology and Interstate Commerce Committee the following policies:

• Policy supporting S. 1066, the Economic Development Act of 2005, a bill sponsored by Senator George Voinovich of Ohio, which authorizes a state to provide tax incentives to businesses for economic development. http://www.ncsl.org/standcomm/sctech/taxpolicy0406.htm
• Policy supporting S. 2152, the Sales Tax Fairness and Simplification Act, sponsored by Senator Michael Enzi of Wyoming, to grant states the authority to require out-of-state sellers to collect sales and use taxes on remote sales made within their state. http://www.ncsl.org/standcomm/sctech/salestax.htm

Mandate Monitor Update

In April, NCSL released its newest edition of the Mandate Monitor, which highlights the close to $75 billion in cost shifts to the states over the past three years and the potential implications for states if the President’s proposed budget were enacted.  The next edition will be released in June. http://www.ncsl.org/print/standcomm/scbudg/MandateMonitor0406.pdf

Debt Ceiling

On March 20, 2006, Congress passed H.J.Res. 47 (P.L. 109-182), which increased the debt ceiling to $8.965 trillion, an increase of $781 billion over the prior limit. Treasury Secretary Snow had requested the debt limit increase in two prior letters to Congress, which stated that the debt limit would be surpassed sometime in mid-March.

Business Activity Tax (BAT)

On March 2, 2006, Congressman Bob Goodlatte (VA) introduced the “Innovation and Competitiveness Act,” H.R. 4845, which would establish a 21-day physical presence standard for the imposition of a state business activity tax (BAT), preempting states that impose an economic presence standard for BAT or lesser physical presence standard (an exception to the 21 day standard exist for sports figures and entertainers).

http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=109_cong_bills&docid=f:h4845ih.txt.pdf

Things to Watch:

• Tax Reconciliation: Conferees will continue negotiations on H.R. 4297 (tax reconciliation), in an effort to reach  a compromise on the AMT and capital gains/dividends extensions.
• Emergency Supplemental: H.R. 4939, the $106.47 billion emergency supplemental bill for the war on terror and Katrina relief, will be taken up in the Senate this week
• Budget Resolution: It appears as if the House Budget Resolution will be put off for at least another week as it was not included on the House floor schedule.  

NCSL Annual Meeting

Register by May 17^th and Save: Take advantage of early bird savings on registration for NCSL's 2006 Annual Meeting in Nashville August 15-18, where America's issues will take center stage. http://www.ncsl.org/annualmeeting/