When a US state loses its tax deduction: ‘The state has lost its footing’

Sacramento, CA – A California state agency has lost the ability to deduct taxes owed in Nevada for the 2016 tax year, the state’s attorney general’s office said.

A statement from the California Office of Tax Administration (OCA) said that it has been unable to deduct the tax due for the year because the Nevada Office of Business and Economic Development (OBED) has not submitted a complete tax return.

A spokeswoman for OCA said the agency has submitted the Nevada Taxpayer Assistance Program (NTAP) Form 5-A for a refund, but that the payment was delayed because the agency is waiting for an official state response.

She said the payment is scheduled to be made on Tuesday.

The OCA has been trying to collect taxes owed by Nevada taxpayers since 2015, when it filed a complaint against the state in federal court alleging that the state failed to pay nearly $1.4bn in taxes owed to the state, including to its residents.

A judge later agreed to suspend the action pending the outcome of the investigation.

The complaint was a result of a 2015 audit by the Office of Special Counsel into OBCD’s tax collection efforts, which was led by a Nevada lawyer, William Gann, who is now the special counsel for the Trump administration.

The state is seeking $2bn in refunds from OBCEd, the OCA’s agency that collects taxes owed from people in the state.

Nevada officials have said the state has collected almost $1bn in tax refunds since it implemented the so-called “border adjustment tax” in November 2016.

The state also reported that it is on track to collect more than $1,000m in federal income taxes from Trump, according to the Nevada Department of Taxation and Finance.

The Trump administration said the tax relief would help the state meet its obligations to fund public schools and roads.