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Legislative Updates - Summer 2018

Tracking Legislation that May Impact Your Business, Estate, Retirement, or Wallet


Recent Developments


Tariffs on Imported Metals from European Union, Mexico, and Canada Now in Effect

On June 1, the U.S. applied 25% excise taxes on steel imported from these trading partners and 10% tariffs on imported aluminum from these three sources. In response, Canada will impose tariffs on $12.8 billion of American goods effective July 1. The E.U. and Mexico also announced retaliatory tariffs on crops, metals, and cosmetics coming from the U.S. (1,2)


The "Fiduciary Rule" May be History

Vacated by a federal appeals court in March, the 2016 Department of Labor rule demanding that retirement advisors place client best interests ahead of their own was never fully implemented and may now be dead. No effort to challenge the appeals court ruling has emerged from the Trump administration. The Securities and Exchange Commission did offer a plan this spring – hundreds of pages thick – intended to preserve the spirit, if not the letter, of the rule. The SEC plan lists obligations for investment professionals regarding the integrity of advisor-client relationships, but does not define the term “best interest.” (3)

 

Federal Tax Law Adjustments


"SALT" Deduction Cap Workarounds are Being Questioned

New York, Connecticut, and New Jersey have created legislative responses to offset the lowered $10,000 annual federal deduction limit for state and local taxes (SALT). These three states are permitting cities and towns to create charitable funds, and homeowners can contribute to these local funds and still receive a federal tax break. In notices issued in May, the Internal Revenue Service and Department of the Treasury said that they would propose new rules to address the emergence of these plans. I.R.S. Notice 2018-54 cautions that “despite these state efforts to circumvent the new statutory limitation on state and local tax deductions, taxpayers should be mindful that federal law controls the pr