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TaxBuzz Top 5 - Italy Faces Criticism Over Tax Evasion Plan, Google Considers Funding Pause & More

TaxBuzz Top 5 - Italy Faces Criticism Over Tax Evasion Plan, Google Considers Funding Pause & 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. Maryland County Considers Major Prepared Foods Tax

Credit: Ana Rocio Garcia Franco/Getty Images

Fairfax County, Maryland may soon see a price hike on prepared foods as lawmakers explore a potential meals tax. County supervisors have tasked Executive Bryan J. Hill with studying the implications of a 1-6% tax on food and beverages from restaurants, grocery stores, and convenience stores. This move comes after the county’s recent budget increased the average annual tax bill for homeowners by $450.

“We cannot continue to rely so heavily on our real estate taxes,” said Supervisor Dalia Palchik (D-Providence) in a Washington Post report. Despite a unanimous directive to study the tax, opposition remains strong, with Supervisor Pat Herrity (R-Springfield) arguing it unfairly targets the food industry and impacts lower-income residents.

The proposal aims to diversify revenue sources, given that residential tax revenue now comprises 66% of the county’s general fund. “Residents have pretty strongly stated that this isn’t a way that they want to see us go,” Herrity added. Hill will report his findings in September, potentially sparking a lengthy public debate.

2. Montana Property Boom Sparks Political Turmoil

Art Mangels, a retired potato farmer, has lived on his scenic property in Beaverhead County, Montana, for a decade, enjoying views of snowy peaks and the trout-rich Big Hole River. Recently, however, his property tax bill soared by 35%, reflecting a broader trend driven by a pandemic-fueled real estate boom.

“What’s happened is the real rich people have bought up a lot of acreage, a lot of big ranches,” Mangels lamented to the Washington Post. This surge in property values has led to significant tax increases, causing distress among longtime residents already grappling with rising costs for essentials.

Montana’s property tax hikes have sparked political turmoil. Critics, like Mangels, feel betrayed by the state’s leadership. Democrat Ryan Busse has centered his gubernatorial campaign on this issue, accusing Governor Greg Gianforte of favoring wealthy outsiders.

“There’s always been this belief in Montana that you live here, you’re not going to make a lot of money, it’s going to be hard, but man—you get to live the Montana life. Now the struggle is too much,” Busse said. This tax predicament, alongside other rising costs, is forcing some residents, like Mangels, to consider selling their cherished properties.

3. Google Looks at Pausing Google News Initiative Funding

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Google has issued a warning to nonprofit newsrooms, stating that a new California bill could jeopardize its future investments in the U.S. news industry. This marks the second time this year Google has threatened to withdraw investments in response to California’s regulatory efforts.

Last month, Google paused new investments in California newsrooms, citing uncertainty over the California Journalism Preservation Act, which proposes taxing Big Tech for linking to news content to fund newsrooms. Google rival Meta has also opposed the bill, threatening to block news links in California if it becomes law.

Currently, Google is responding to another bill by State Senator Steve Glazer that would tax Big Tech for digital ad transactions to fund tax credits supporting the hiring of more journalists in California. Google warned that this proposal could affect new grants nationwide through its Google News Initiative, which supports hundreds of smaller news outlets.

"Legally enforceable rights no matter the medium, distributor, or new emerging technology will allow us to control our own fate," said Danielle Coffey, president and chief executive of the News/Media Alliance, per an Axios report.

The ad tax bill is expected to reach the California Senate floor soon, potentially leading to further negotiations or legal challenges.

4. Davidson County, NC Taxpayers Receiving Fraudulent Letters

The Davidson County, North Carolina Tax Office is warning residents about fraudulent tax letters labeled "DISTRANT WARRANT" that are circulating. These letters instruct recipients to call an 800 number to dispute charges immediately but lack a return address and a legible signature.

The tax office urges residents not to respond to these scam letters and to report any received instances to the County Tax Office. Authentic correspondence from the Tax Office regarding delinquent taxes will include clear markings and contact information for a specific person.

For any questions or to report a fraudulent letter, WFMY 2 advises taxpayers to contact the Tax Department at 336-242-2160.

5. Italian Government Faces Criticism Over "Invasive" Tax Evasion Measure

Credit: Alexander Spatari/Getty Images

Italian Prime Minister Giorgia Meloni faced criticism on Wednesday over an "invasive" tax evasion measure reinstated by her own government, prompting accusations of incompetence from opposition lawmakers. Per Barron's, the measure, known as the "redditometro," allows tax authorities to compare declared revenues with lifestyle indicators to detect discrepancies. Abolished in 2018, it was unexpectedly announced in the government's official journal this week.

Meloni, previously critical of the "redditometro," defended herself on social media, stating, "Never will any 'Big Brother tax' be introduced by this government." She has asked Deputy Economy Minister Maurizio Leo, who introduced the measure, to review it at the next cabinet meeting and pledged to request changes if necessary.

Deputy Prime Minister Antonio Tajani of Forza Italia and Deputy Prime Minister Matteo Salvini of the League party also condemned the measure, calling it an oppressive and obsolete tool. Opposition leaders, including Matteo Renzi and Giuseppe Conte, seized on the internal discord, with Renzi labeling the coalition as "incapable" and Conte questioning Meloni's attentiveness.

Tax evasion and fraud reportedly cost Italy between 95 to 100 billion euros annually.

Which headline this week most interests you?

Feature Image Credit: © Marco Bottigelli/Getty Images

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