ANNOUNCEMENT 15 Dec 2015
In August 2015, the US government changed the reporting requirements of state and local governments.
NUMBER OF INTERVENTIONS
The Governmental Accounting Standards Board (GASB) adopted in August 2015 a policy (Statement No. 77) with respect to tax abatements that is expected to impose stricter transparency and discipline with respect to tax abatements that are granted by state and local governments in the United States. The requirements of the Statement are effective for financial statements for periods beginning after December 15, 2015, but earlier application is encouraged.
The Statement requires disclosure of tax abatement information about (1) a reporting government's own tax abatement agreements and (2) those that are entered into by other governments and that reduce the reporting government's tax revenues. It requires governments that enter into tax abatement agreements to disclose the following information about the agreements:
·Brief descriptive information, such as the tax being abated, the authority under which tax abatements are provided, eligibility criteria, the mechanism by which taxes are abated, provisions for recapturing abated taxes, and the types of commitments made by tax abatement recipients
·The gross dollar amount of taxes abated during the period
·Commitments made by a government, other than to abate taxes, as part of a tax abatement agreement.
GASB states that governments should organize those disclosures by major tax abatement program and may disclose information for individual tax abatement agreements within those programs. Tax abatement agreements of other governments should be organized by the government that entered into the tax abatement agreement and the specific tax being abated. Governments may disclose information for individual tax abatement agreements of other governments within the specific tax being abated.
For those tax abatement agreements, a reporting government should disclose:
·The names of the governments that entered into the agreements
·The specific taxes being abated
·The gross dollar amount of taxes abated during the period.