The Tax Reform Act of 1986: Impact On Hospitality Industries

In her discussion - The Tax Reform Act Of 1986: Impact On Hospitality Industries - by Elisa S. Moncarz, Associate Professor, the School of Hospitality Management at Florida International University, Professor Moncarz initially states: “After nearly two years of considering the overhaul of the federal tax system, Congress enacted the Tax Reform Act of 1986. The impact of this legislation is expected to affect virtually all individuals and businesses associated with the hospitality industry. This article discusses some of the major provisions of the tax bill, emphasizing those relating to the hospitality service industries and contrasting relevant provisions with prior law on their positive and negative effects to the industry. “On October 22, 1986, President Reagan signed the Tax Reform Act of 1986 (TRA 86) with changes so pervasive that a recodification of the income tax laws became necessary…,” Professor Moncarz says in providing a basic history of the bill. Two, very important paragraphs underpin TRA 86, and this article. They should not be under-estimated. The author wants you to know: “With the passage of TRA 86, the Reagan administration achieved the most important single domestic initiative of Reagan's second term, a complete restructuring of the federal tax system in an attempt to re-establish fairness in the tax code…,” an informed view, indeed. “These changes will result in an estimated shift of over $100 billion of the tax burden from individuals to corporations over the next five years [as of this article],” Professor Moncarz enlightens. “…TRA 86 embraces a conversion to the view that lowering tax rates and eliminating or restricting tax preferences (i.e., loopholes) “would be more economically and socially productive.” Hence, economic decisions would be based on economic efficiency as opposed to tax effect,” the author asserts. “…both Congress and the administration recognized from its inception that the reform of the tax code must satisfy three basic goals,” and these goals are identified for you. Professor Moncarz outlines the positive impact TRA 86 will have on the U.S. economy in general, but also makes distinctions the ‘Act will have on specific segments of the business community, with a particular eye toward the hospitality industry and food-service in particular. Professor Moncarz also provides graphs to illustrate the comparative tax indexes of select companies, encompassing the years 1883-through-1985. Deductibility and its importance are discussed as well. The author foresees Limited Partnerships, employment, and even new hotel construction and/or rehabilitation being affected by TRA 86. The article, as one would assume from this type of discussion, is liberally peppered with facts and figures.

Understanding the Impact of the Property Tax Appeal Process on Assessment Uniformity: Procedures, Structures, and Outcomes

Property taxes serve as a vital revenue source for local governments. The revenues derived from the property tax function as the primary funding source for a variety of critical local public service systems. Property tax appeal systems serve as quasi-administrative-judicial mechanisms intended to assure the public that property tax assessments are correct, fair, and equitable. Despite these important functions, there is a paucity of empirical research related to property tax appeal systems. This study contributes to property tax literature by identifying who participates in the property tax appeal process and examining their motivations for participation. In addition, the study sought to determine whether patterns of use and success in appeal systems affected the distribution of the tax burden. Data were collected by means of a survey distributed to single-family property owners from two Florida counties. In addition, state and county documents were analyzed to determine appeal patterns and examine the impact on assessment uniformity, over a three-year period. The survey data provided contextual evidence that single-family property owners are not as troubled by property taxes as they are by the conduct of local government officials. The analyses of the decision to appeal indicated that more expensive properties and properties excluded from initial uniformity analyses were more likely to be appealed, while properties with homestead exemptions were less likely to be appealed. The value change analyses indicated that appeals are clustered in certain geographical areas; however, these areas do not always experience a greater percentage of the value changes. Interestingly, professional representation did not increase the probability of obtaining a reduction in value. Other relationships between the variables were discovered, but often with weak predictive ability. Findings from the assessment uniformity analyses were also interesting. The results indicated that the appeals mechanisms in both counties improved assessment uniformity. On average, appealed properties exhibited greater horizontal and vertical inequities, as compared to non-appealed properties, prior to the appeals process. After, the appeal process was completed; the indicators of horizontal and vertical equity were largely improved. However, there were some indications of regressivity in the final year of the study.