October 12, 2018
Former S.C. Department of Revenue Director, and current Nexsen Pruet Member, Rick Reames III was featured in Bloomberg BNA’s Daily Tax Report recently. In the article, “Private Schools Could Take Unintended Hit From IRS Donation Regs,” Rick speaks on the potential of recently proposed IRS regulations which would crack down on state workarounds to the deduction cap for state and local taxes (SALT), negatively impacting private school donation programs. South Carolina, among many Southern states with low taxes, could see the "shattering" of private school donation programs.
“Treasury has really cut off the whole arm when it really just needed to amputate a finger,” Rick Reames III, member of Nexsen Pruet LLC, told Bloomberg Tax.
The fear is that the proposed regulations, which target workarounds in high-tax states that use charitable contributions, could also apply to long-standing programs across the country.
The timing of Treasury’s action is especially bad for South Carolina, where tax credit programs have really gained traction in recent years, Rick Reames III, former South Carolina Department of Revenue director and current member of Nexsen Pruet LLC, told Bloomberg Tax.
South Carolina credits became permanent law July 1 with the start of South Carolina’s new fiscal year. Prior to that, the credit program had been renewed by an annual budget provison. “The program was just starting to take off,” Reames said.
“I don’t think most tax advisers or donors are fully aware of the potential impact to tax credit scholarship programs,” Reames said. “The Treasury Department acted to preserve the new federal tax reform act’s state and local tax deduction cap. However, this may unintentionally strip away some of the tax benefits to the scholarship programs.”
Former South Carolina Department of Revenue Director Rick Reames III helps clients navigate complex tax, business, and regulatory laws, and works with state leaders to achieve sound public policy. Reames was appointed Director of SCDOR by former Governor (now UN Ambassador) Nikki Haley in 2014, was unanimously confirmed by the SC Senate, and served until January 3, 2017. Rick provides sophisticated state and local tax (SALT) advice and works on comprehensive tax planning, controversies, and economic development incentives.
Nexsen Pruet is one of the largest law firms in the Carolinas, with more than 190 attorneys and offices in Columbia, Charleston, Greenville, Hilton Head and Myrtle Beach, South Carolina, as well as Charlotte, Greensboro and Raleigh, North Carolina. Founded in 1945, Nexsen Pruet provides a broad range of legal services to the business community and represents companies and other entities in local, state, national and international venues.