May xx, 2015

Dear [Legislator’s name]:

I am writing regarding problematic effective date language that is pervasive in tax bills moving through the legislature this session. For example, the wording in HB 624 states:

"The provisions of this Act shall apply to all exclusions from taxable income and all claims for deductions made on any return filed on or after July 1, 2015, regardless of the taxable year to which the return relates.”

This verbiage can be found in several bills including, but not limited to HB 218, HB 402, HB 629, HB 805 and HCR 8, that are soon to be heard in the Senate Finance Committee.

Should passage of the bills occur as they are currently drafted, taxpayers along with the CPA profession will be negatively impacted. As a profession, we typically do not get involved in debate about specific tax positions. We do get passionately involved in tax policy matters. Passage of these bills is BAD TAX POLICY for the following reasons:

·  How can two taxpayers with identical taxable incomes have different tax liabilities simply based on when they file their return?

·  Extensions are granted to extend the filing of a tax return. Payment of the tax is not extended. If the tax law is subject to interim change as proposed, no one will file extensions in the future, which will create workload compression by forcing all returns to be filed by the original due date.

·  Taxpayers will lose faith in the system. Economic development will suffer.

·  Taxpayers that have a significant 2014 tax liability will probably file their returns on or before June 30, 2015. If the 2015/16 fiscal notes associated with these bills contain an estimate of 2014 taxes that are uncollected as of June 30th, then the fiscal notes aren't reliable.

·  What about amended returns from prior tax years? Strict interpretation of the proposed bills would suggest that amended returns from tax years 2012 or 2013 would be subject to the new laws and calculated accordingly.

·  The tax software companies won't be able to timely reprogram their products to account for the change in the tax law. So technically, every return filed after June 30th will be wrong.

·  The Department of Revenue doesn't have enough staff to manage what purports to be a very manual process to recalculate EVERY return that is filed after June 30th and send out a new tax bill.

·  The legal implications are daunting.

Please consider proposing/supporting amending the language in these bills to:

"The provisions of this Act shall apply to all exclusions from taxable income and all claims for deductions made on any return filed on or after July 1, 2015, for tax periods beginning on or after January 1, 2015.”

I would be happy to answer any questions or supply additional information.

Sincerely,

[your name/company]