The Fair Tax Act, Part LV
More of section 901:
`(f) Substance Over Form- The substance of a transaction will prevail over its form if the transaction has no bona fide economic purpose and is designed to evade tax imposed by this subtitle.
An obvious catch-all to prevent rules mongers from abusing the law to their own advantage.
`(g) Certain Employee Discounts Taxable-
`(1) EMPLOYEE DISCOUNT- For purposes of this subsection, the term `employee discount’ means an employer’s offer of taxable property or services for sale to its employees or their families (within the meaning of section 302(b)) for less than the offer of such taxable property or services to the general public.
`(2) EMPLOYEE DISCOUNT AMOUNT- For purposes of this subsection, the employee discount amount is the amount by which taxable property or services are sold pursuant to an employee discount below the amount for which such taxable property or services would have been sold to the general public.
`(3) TAXABLE AMOUNT- If the employee discount amount exceeds 20 percent of the price that the taxable property or services would have been sold to the general public, then the sale of such taxable property or services by the employer shall be deemed the conversion of such taxable property or services to personal use and tax shall be imposed on the taxable employee discount amount. The taxable employee discount amount shall be–
`(A) the employee discount amount, minus
`(B) 20 percent of the amount for which said taxable property or services would have been sold to the general public.
Specifically enforces taxation on discounts to employees past a threshold of 20%. Also useful for preventing underselling cheats.
`(h) Saturday, Sunday, or Legal Holiday- When the last day prescribed for performing any act required by this subtitle falls on a Saturday, Sunday, or legal holiday (in the jurisdiction where the return is to be filed), the performance of such act shall be considered timely if it is performed on the next day which is not a Saturday, Sunday, or legal holiday (in the jurisdiction where the return is to be filed).
Pretty self-explanatory.
OK that’s it for section 901. The next section covers transition rules and we’ll get into it in the next day or two (I hope).
