State Of New York et al v. Mnuchin et al

Filing 47

DECLARATION of Owen T. Conroy in Support re: 44 CROSS MOTION for Summary Judgment .. Document filed by State Of Connecticut, State Of New York, State of Maryland, State of New Jersey. (Attachments: # 1 Exhibit 1, # 2 Exhibit 2, # 3 Exhibit 3, # 4 Exhibit 4, # 5 Exhibit 5, # 6 Exhibit 6, # 7 Exhibit 7, # 8 Exhibit 8, # 9 Exhibit 9, # 10 Exhibit 10, # 11 Exhibit 11, # 12 Exhibit 12, # 13 Exhibit 13, # 14 Exhibit 14, # 15 Exhibit 15, # 16 Exhibit 16, # 17 Exhibit 17, # 18 Exhibit 18, # 19 Exhibit 19, # 20 Exhibit 20, # 21 Exhibit 21, # 22 Exhibit 22, # 23 Exhibit 23, # 24 Exhibit 24, # 25 Exhibit 25, # 26 Exhibit 26, # 27 Exhibit 27, # 28 Exhibit 28, # 29 Exhibit 29, # 30 Exhibit 30, # 31 Exhibit 31, # 32 Exhibit 32, # 33 Exhibit 33, # 34 Exhibit 34, # 35 Exhibit 35, # 36 Exhibit 36, # 37 Exhibit 37, # 38 Exhibit 38, # 39 Exhibit 39, # 40 Exhibit 40, # 41 Exhibit 41, # 42 Exhibit 42, # 43 Exhibit 43, # 44 Exhibit 44, # 45 Exhibit 45, # 46 Exhibit 46, # 47 Exhibit 47, # 48 Exhibit 48, # 49 Exhibit 49, # 50 Exhibit 50, # 51 Exhibit 51, # 52 Exhibit 52, # 53 Exhibit 53, # 54 Exhibit 54, # 55 Exhibit 55, # 56 Exhibit 56, # 57 Exhibit 57, # 58 Exhibit 58, # 59 Exhibit 59, # 60 Exhibit 60, # 61 Exhibit 61, # 62 Exhibit 62, # 63 Exhibit 63, # 64 Exhibit 64, # 65 Exhibit 65, # 66 Exhibit 66, # 67 Exhibit 67, # 68 Exhibit 68, # 69 Exhibit 69, # 70 Exhibit 70, # 71 Exhibit 71, # 72 Exhibit 72, # 73 Exhibit 73, # 74 Exhibit 74, # 75 Exhibit 75, # 76 Exhibit 76, # 77 Exhibit 77, # 78 Exhibit 78, # 79 Exhibit 79, # 80 Exhibit 80, # 81 Exhibit 81, # 82 Exhibit 82, # 83 Exhibit 83, # 84 Exhibit 84, # 85 Exhibit 85, # 86 Exhibit 86, # 87 Exhibit 87, # 88 Exhibit 88, # 89 Exhibit 89, # 90 Exhibit 90, # 91 Exhibit 91, # 92 Exhibit 92, # 93 Exhibit 93, # 94 Exhibit 94, # 95 Exhibit 95, # 96 Exhibit 96, # 97 Exhibit 97, # 98 Exhibit 98, # 99 Exhibit 99, # 100 Exhibit 100, # 101 Exhibit 101, # 102 Exhibit 102, # 103 Exhibit 103, # 104 Exhibit 104, # 105 Exhibit 105, # 106 Exhibit 106)(Conroy, Owen)

Exhibit 54

40

72 Stat. 1660.
26 USC 6012.

Ante, p. 38.
76 Stat. 1003.
26 USC 911.

PUBLIC LAW 88-272-FEB. 26,1964

[78

STAT.

the amount of gain nor included in gross income pursuant to an
election under this section."
(h) TECHNICAL AXO CLERICAL AMENDMENTS.—
(1) Secti'Ui fil'12'c) (relating to persons required to make
returns of income) is amended to read as follows:
"(c) CERTAIN INCOME EASXEI.. ABROAD OR FROM SALE OF RESIDENCE.—For purposes of this section, gross income shall be computed
without regard to the. exclusion provided for in section 121 (relating
(o sale of residence by individual who has attained age 65) and without regard to the exclusion provided for in section 911 (relating to
ea rned income from sources without the United States)."
(2) The table of sections for part III of subchapter B of
chapter 1 is amended by striking out
"Sec. 121. Cross references to other Acts."

and inserting in lieu thereof
"See. 121. Gain from sale or exchange of residence of individual
who has attained, age OS.
"Sec. 122. Cross references to other Acts."
26 USC 1033.

(3) Section 1033(h) (relating to involuntary conversions) is
amended by adding at the end thereof the following new paragraph :
"(3) For exclusion from gross income of certain gain from involuntary conversion of residence of taxpayer who has attained age 65,
see section 121."

26 USC 1034.

(4) Section 1034 (relating to sale or exchange of residence)
is amended by adding at the end thereof the following new
subsection:
"(k) CROSS REFERENCE.—
"For exclusion from gross income of certain gain from sale or
exchange of residence of taxpayer who has attained age 65, see section 121."

(c) EFFECTIVE DATE.—The amendments made by this section shall
apply to dispositions after December 31, 1!)63, in taxable years ending
after such date.
SEC. 207. DENIAL OF DEDUCTION FOR CERTAIN STATE, LOCAL, ANI
FOREIGN TAXES.
68A Stat, 47.
26 USC 164.

26 USC 212.

(a) IN GENERAL.—Subsections (a), (b), and (c) of section 16-1
(relating to deduction for taxes) are amended to read as follows:
"(a) GENERAL RULE.—Except as otherwise provided in this section,
the following taxes shall be allowed as a deduction for the taxable
year within which paid or accrued:
"(1) State and local, and foreign, real property taxes.
"(2) State and local personal property taxes.
"(3) State and local, and foreign, income, war profits, T.'I
excess profits taxes.
"(4) State and local general sales taxes.
"(5) State and local taxes on the sale of gasoline, diesel fuel,
and other motor fuels,
in addition, there shall be allowed as a deduction State and local, and
foreign, taxes not described in the preceding sentence which are paid
or accrued within the taxable year in carrying on a trade or business
or an activity described in section 212 (relating to expenses for production of income).
"(b) DEFINITIONS AND SPECIAL RCLES.—For purposes of this
section—
"(1) PERSONAL PROPERTY TAXES.—The term 'personal property
tax' means an ad valorem tax which is imposed on an annual basis
in respect of personal property.

78

STAT.]

" (2)

i

PUBLIC LAW 88-272-FEB. 26, 1964

41

GENERAL SALES TAXES —

"(A) IN GENERAL.—The term 'general sales tax' means
a tax imposed at one rate in respect of the sale at retail
of a broad range of classes of items.
"(B) SPECIAL RULES FOR FOOD, ETC.—In the case of items
of food, clothing, medical supplies, and motor vehicles—
"(i) the fact that the tax does not apply in respect
of some or all of such items shall not be taken into
account in determining whether the tax applies in
respect of a broad range of classes of items, and
"(ii) the fact that the rate of tax applicable in
respect of some or all of such items is lower than the
general rate of tax shall not be taken into account in
determining whether the tax is imposed at one
rate.
"(C) ITEMS TAXED AT DEFERENT RATES.—Except in the
case of a lower rate of tax applicable in respect of an
item described in subparagraph (B), no deduction shall
be allowed under this section for any general sales tax imposed in respect of an item at a rate other than the general
rate of tax.
"(D) COMPENSATING USE TAXES.—A compensating use
tax in respect of an item shall be treated as a general sales
tax. For purposes of the preceding sentence, the term
'compensating use tax' means, in respect of any item, a tax
which—
"(i) is imposed on the use, storage, or consumption
of such item, and
"(ii) is complementary to a general sales tax, but only
if a deduction is allowable under subsection (a) (4) in
respect of items sold at retail in the taxing jurisdiction
which are similar to such item.
" (3) STATE OK LOCAL TAXES.—A State or local tax includes only
a tax imposed by a State, a possession of the United States, or a
political subdivision of any of the foregoing, or by the District
of Columbia.
"(4) FOREIGN TAXES.—A foreign tax includes only a tax
imposed by the authority of a foreign country,
"(5) SEPARATELY STATED GENERAL SALES TAXES AND GASOLINE
TAXES.—If the amount of any general sales tax or of any tax on
the sale of gasoline, diesel fuel, or other motor fuel is separately
stated, then, to the extent that the amount so stated is paid by
(he consumer (otherwise than in connection with the consumer's
trade or business) to his seller, such amount shall be treated as a
tax imposed on, and paid by, such consumer.
" (c) DEDUCTION DENIED IN CASE OF CERTAIN TAXES.—Xo deduction
slm 11 be allowed for the following taxes:
"(1) Taxes assessed against local benefits of a kind tending to
increase the value of the property assessed; but this paragraph
.shall not prevent the deduction of so much of such taxes as ifproperly allocable to maintenance or interest charges.
"(2) Taxes on real property, to the extent that subsection (d)
requires such taxes to be treated as imposed on another tax2>ayer.!*
(U) TECHNICAL AMENDMENTS.—
(1) The iirst sentence of section 104(f) (relating to payments
for municipal services in atomic energy communities) is amended
by inserting "Slale" before "real property (axes".

72 Stat. 1608.
26 USC 164.

42
68A Stat. 47;
72 Stat. 1608.
26 USC 164.

PUBLIC LAW 88-272-FEB. 26, 1964

[78 STAT.

(2) Section 164(g) (relating to cross references) is amended
to read as follows:

'*fo^ faunae T?iiYi?Tj«:Siwr<.ma•—
\o/
"(1) For provisions disallowing any deduction for the payment
of the tax imposed by subchapter B of chapter 3 (relating to taxfree covenant bonds), see section 1451.
"(2) For provisions disallowing any deduction for certain taxes,
see section 275."
26 USC 261-274

(3) (A) Part IX of subchapter B of chapter 1 (relating to
items not deductible) is amended by adding at the end thereof
■ the following new section:
"SEC. 275. CERTAIN TAXES.
"(a) GENERAL RULE.—No

75 Stat. 141.
26 USC 31013126.
73 Stat. 28, 29
77 Stat. 221.
26 USC 3201,
3211.
Post, p 140.
26 USC 3402.

deduction shall be allowed for the following taxes:
"(1) Federal income taxes, including—
"(A) the tax imposed by section 3101 (relating to the tax
on employees under the Federal Insurance Contributions
Act);
"(B) the taxes imposed by sections 3201 and 3211 (relating
to the taxes on railroad employees and railroad employee
representatives); and
"(C) the tax withheld at source on wages under section
3402, and corresponding provisions of prior revenue laws.
"(2) Federal war profits and excess profits taxes.
"(3) Estate, inheritance, legacy, succession, and gift taxes.
"(4) Income, war profits, and excess profits taxes imposed by
the authority of any foreign country or possession of the United
States, if the taxpayer chooses to take to any extent the benefits
of section 901 (relating to the foreign tax credit).
"(5) Taxes on real property, to the extent that section 164(d)
requires such taxes to be treated as imposed on another taxpayer.
"(b) CROSS REFERENCE.—
"For disallowance of certain other taxes, see section 164(c)."

(B) The table of sections for such part IX is amended by add' g at the end thereof the following:
"Sec. 275. Certain taxes."

(4) Paragraph (1) of section 535(b) (relating to adjustments
to accumulated taxable income) is amended by striking out "section 164(b) (6)" and inserting in lieu thereof "section 275 (a) (4)".
(5) The first sentence of paragraph (1) of section 545(b)
(relating to adjustments to personal holding company taxable
income) is amended by striking out "section 164(b) (6)" and inserting in lieu thereof "section 275(a) (4)".
(6) The first sentence of paragraph (1) of section 556(b)
(relating to adjustments to foreign personal holding company
taxable income) is amended by striking out "section 164 (b) (6)"
and inserting in lieu thereof "section 275(a) (4)".
(7) Paragraph (1) of section 901(d) (relating to credit for
taxes imposed by foreign countries) is amended by striking out
"section 164" and inserting in lieu thereof "sections 164 and 275".
(8) Section 903 (relating to credit, for taxes imposed by a foreign country in lieu of income, etc;, taxes) is amended by striking
out "section 164(b)'" and inserting in lieu thereof "sections 164(a)
and 275(a)".

78

STAT.

]

PUBLIC LAW 88-272-FEB. 26, 1964

(c) EFFECTIVE DATE.—
(1) GENERAL RULE.—Except as provided in paragraph (2), the
amendments made by this section shall apply to taxable years
beginning after December 31,1963.
(2) SPECIAL TAXING DISTRICTS.—Section 164 (c) (1) of the Internal Kevenue Code of 1954 (as amended by subsection (a)) shall
not prevent the deduction under section 164 of such. Code (as so
amended) of taxes levied by a special taxing district which is
described in section 164(b) (5) of such Code (as in effect for a
taxable year ending on December 31, 1963) and which was in
existence on December 31,1963, for the purpose of retiring indebtedness existing on such date.

43

Ante, p. 40.
26 USC 164.

SEC. 208. PERSONAL CASUALTY AND THEFT LOSSES.

(a) LIMITATION ON AMOUNT OF CASUALTY OR THEFT Loss DEDUCTION.—Section 165 (c) (3) (relating to losses of property not connected

I

I

s

Si

with trade or business) is amended to read as follows:
"(3) losses of property not connected with a trade or business,
if such losses arise from fire, storm, shipwreck, or other casualty,
or from theft. A loss described in this paragraph shall be allowed
only to the extent that the amount of loss to such individual
arising from each casualty, or from each theft, exceeds $100.
For purposes of the $100 limitation of the preceding sentence,
a huslband and wife making a joint return under section 6013 for
the taxable year in which the loss is allowed as a deduction shall
be treated as one individual. No loss described in this paragraph
shall be allowed if, at the time of filing the return, such loss has
been claimed for estate tax purposes in the estate tax return."
(b) EFFECTIVE DATE.—The amendment made by subsection (a)
shall apply to losses sustained after December 31, 1963, in taxable
years ending after such date.

68A Stat. 49.
26 USC 165.

26 USC 6013.

SEC. 209. CHARITABLE, ETC., CONTRIBUTIONS AND GIFTS.

(a) CERTAIN ORGANIZATIONS ADDED TO ADDITIONAL 10-PERCENT
CHARITABLE LIMITATION.—Section 170(b) (1) (A) (relating to limitai ion on amount of deduction for charitable contributions by individuals) is amended by striking out "or" at the end of clause (iii), and
by inserting after clause (iv) the following new clauses:
"(v) a governmental unit referred to in subsection
(c)(1), or
" (vi) an organization referred to in subsection (c) (2)
which normally receives a substantial part of its support
(exclusive of income received in the exercise or
performance by such organization of its charitable, educational, or other purpose or function constituting the
basis for its exemption under section 501(a)) from a
governmental unit referred to in subsection (c)(1) or
from direct or indirect contributions from the general
public,".
(b) UNLIMITED CHARITABLE CONTRIBUTION DEDUCTION.—Section
170 (relating to charitable, etc., contributions and gifts) is amended by
inserting after subsection (f) (added by subsection (e) of this section)
the following new subsection:
"(g) APPLICATION OF UNLIMITED CHARITABLE CONTRIBUTION DEDUCTION.—

"(1) ALLOWANCE OF DEDUCTION FOR TAXABLE YEARS BEGINNING AFTER DECEMBER si, ions,—If the taxable year begins after
December 31,1963—
"(A) subsection (b)(1)(C) shall apply only if the taxpayer so elects (at such time and in such manner as the Secretary or his delegate by regulations prescribes); and

iiiBffirtJ»nfflttwi'<Mniiitsw>)ca

goaMnaafe

76 Stat. 1134.
26 USC 170.

26 USC 501.

Post, p. 47.