Differences in Fair Tax Act 2007 version
I was forwarded this info from Joshua Zader.
My PDF diff tool missed this (or it might have simply been my fault, it’s small).
The difference is in Section 2, Definitions, Section 16: Used Property.
The old definition defined used property as:
`(16) USED PROPERTY- The term `used property’ means–
`(A) property on which the tax imposed by section 101 has been collected and for which no credit has been allowed under section 203, or
`(B) property that was held other than for a business purpose (as defined in section 102(b)) on December 31, 2006.
The new definition revises it thusly: (some emphasis added here to show the changes)
`(16) USED PROPERTY- The term `used property’ means–
`(A) property on which the tax imposed by section 101 has been collected and for which no credit has been allowed under section 202, 203, or 205, or
`(B) property that was held other than for a business purpose (as defined in section 102(b)) on December 31, 2008.
Sections 202 and 205 cover business use conversion credits and bed debt credits, respectively.
So this change tweaks the definition of used property to exclude business use converted items (taxed once and then credited back, so it would be taxed if sold again to avoid evasion) and also to exclude items purchased with a bad debt (an unpaid for item that was tax-credited back, if somehow recovered and sold again, should be taxed as well).
Both of these changes cover potential tax evasion scenarios by businesses.
Comments?
