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TaxBuzz Top 5 - Chicago PD Forced to Make Pension Payments, GOP Plans Tax Overhaul If Trump Wins Presidency & More

TaxBuzz Top 5 - Chicago PD Forced to Make Pension Payments, GOP Plans Tax Overhaul If Trump Wins Presidency & More

Each Friday, TaxBuzz brings you the top five tax and accounting headlines you need to know from the workweek. We know life can get busy and you don't always have time to scroll through your news feed to stay informed.

We weed through all of the week's stories to showcase the most important updates in the tax and accounting world.

1. Chicago Police Officers Hit with Pension Payments Due to Payroll Error

Credit: J.Castro/Getty Images

Thousands of Chicago police officers received letters from their pension fund this week due to a payroll error linked to their latest contract. According to a Chicago Tribune article shared by Yahoo!, approximately 3,000 officers must now repay contributions to their pension fund, plus interest. The Fraternal Order of Police, Lodge 7, plans to file a grievance to shift the interest burden to the city.

The issue affects Tier 2 members of the Policemen’s Annuity and Benefit Fund of Chicago, those who joined on or after January 1, 2011, making up about half of the fund's 12,000 active members. Officers contribute 9% of their salary to their pension, which was miscalculated due to a "fiscal year discrepancy" related to a retroactive salary increase approved in late 2023.

The fund, citing state law, demands the required contributions plus 3% interest. Officers must pay by August 31 or face deductions from their annuity payments upon retirement. FOP President John Catanzara criticized the city and pension fund for the oversight and announced plans to demand the city cover the interest charges.

2. GOP Plans Tax Overhaul If Trump Wins Presidency

House Speaker Mike Johnson and Senate Republicans are strategizing for a potential Trump presidency in 2024, with a tax overhaul at the top of their agenda, as originally reported by CNN. In a recent meeting with Senate Republicans, Johnson emphasized using reconciliation to advance their goals. Reconciliation allows passing legislation with a simple majority and was previously used by the GOP to re-write tax laws under Trump.

Senator Thom Tillis mentioned that the discussion focused on future tax reforms, while Senator Kevin Cramer and Senator John Cornyn expressed interest in using reconciliation for broader issues, including border control and mandatory spending. Johnson stressed the need for "aggressive" policy changes and regulatory reform, aiming for a unified government to address major national issues.

However, not all were convinced. Senator Josh Hawley was skeptical, stressing the importance of winning the majority first. Senate Minority Leader Mitch McConnell echoed this sentiment, stating that achieving a Republican president, House, and Senate is crucial for using reconciliation.

3. Skid Row to Be Reimagined With a 19-Story Residential Tower 

Credit: Salvador Avila/Getty Images

The Weingart Center Association is set to open a new 278-unit residential tower in Skid Row this month, aimed at providing a safe haven for formerly homeless residents. Spearheaded by CEO Kevin Murray, the $165 million project will receive permanent financing from Proposition HHH, state housing funds, and $56 million in state tax credits.

"We aren’t in it for the developer fee, so we said let’s just build the biggest thing we can,” said Murray in an LA Times report, noting the project's departure from conventional homeless housing practices. The tower includes amenities such as a gym, art room, music room, computer room, TV lounge, and a ground floor cafe, which are typically absent in similar housing projects.

Each unit, costing just under $600,000, is part of a broader strategy to revitalize Skid Row while addressing homelessness. "We’re trying to make our little corner of the world look and feel a little better," Murray added.

The Weingart project will house around 700 residents when complete, aiming to isolate them from Skid Row’s harsh environment and provide a dignified living space.

4. Tyson Foods CFO Suspended Following Latest Arrest

Tyson Foods has suspended CFO John R. Tyson after his recent arrest for driving while intoxicated in Arkansas, per CNBC. Curt Calaway has been named interim CFO. Tyson, 34, was arrested early Thursday morning and released nine hours later. This follows a 2022 incident during which Tyson was arrested for public intoxication and trespassing after being found asleep in a stranger’s home. He later apologized to investors and pled guilty to the charges.

Tyson, who joined the company in 2019, is the son of Chairman John H. Tyson and the great-grandson of the founder. His appointment raised eyebrows due to his limited experience in the industry. Despite this, he received an annual base salary of $650,000 and increased incentive payments.

Tyson Foods, headquartered in Springdale, Arkansas, is renowned for its chicken products and owns brands like Hillshire Brands and River Valley Ingredients. The company has not commented further on the incident, labeling it a personal matter. This leadership shake-up comes as the company aims to maintain investor confidence and operational stability.

5. Maryland to Increase Taxes on Tobacco and Electronic Smoking Devices

Credit: Zhang Rong/Getty Images

Starting July 1, 2024, Maryland will increase taxes on cigarettes, tobacco products, and electronic smoking devices. This change follows the Budget Reconciliation and Financing Act of 2024, signed by Governor Wes Moore on May 16.

The new excise tax rates are:

  • Cigarettes (pack of 20): $5 per pack (up from $3.75)
  • Cigarettes (pack of more than 20): $0.25 per cigarette (up from $0.17)
  • Other tobacco products (excluding cigars and pipe tobacco): 60% of the wholesale price (up from 53%)

For electronic smoking devices, including vaping liquid in containers over 5 ml, the sales and use tax will rise to 20%, an 8% increase. Rates for cigars, pipe tobacco, and vaping liquid in containers of 5 ml or less remain unchanged.

The Maryland comptroller's office reminds residents of these changes, emphasizing the impact on pricing for various tobacco and vaping products starting next month.

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Rebekah Barton

Rebekah Barton

Rebekah's search engine optimization career began completely by accident as a college student. Over the course of her career so far, she has "grown up" with the SEO industry, from writing content while juggling classes to managing her own teams of writers and overseeing SEO strategy in subsequent roles. She is excited to bring her passion for high-quality content to CountingWorks, Inc.

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