In our first quarter 2010 issue, we included a piece entitled “Did You Catch That?”,1 which addressed select provisions in new legislation that tinkered with (by increasing) the amount of estimated taxes that certain large corporations must pay over the course of a future year, effectively providing the government with a short-term loan. It appears this provision has been amended (at least in some capacity) five more times since, with the latest amendment in the Small Business Jobs Act of 2010. Unfortunately, it is painstakingly difficult to determine what the current law actually is (which may cause some to wonder whether the drafting is purposefully designed to be so), as the amendments are numerous and the drafting is not in plain English. It appears even the latest JCT report accompanying the Small Business Jobs Act, dated September 16, 2010, has difficulty keeping track; the current count according to the accompanying JCT report to the Small Business Jobs Act: (i) payments due in July, August, or September, 2014, are increased to 174.25% of the payment otherwise due; (ii) payments due in July, August or September, 2015, are increased to 158.25% of the payment otherwise due; and (iii) payments due in July, August or September, 2019, are increased to 106.50% of the payment otherwise due. Our count (consistent with RIA checkpoint—see chart below): 174.25% in 2014; 159.25% in 2015; 106.5% in 2019. The discrepancy appears to result from the fact that the report does not take into account recent legislation (which was enacted prior to the date of the report).
So how much revenue do these adjustments actually rake in? Take the Small Business Jobs Act as an example. The Small Business Jobs Act will raise estimated taxes on large corporations by 36% in 2015. The forecasted cost of small business relief for the first five years is approximately $22.3 billion according to the JCT revenue estimates (which can be located at http://www.jct.gov). This revenue raiser will bring in approximately $21.2 billion in 2015. The next year it reverses.