Weary travelers experienced their first bout of sequestration Sunday evening, experiencing three-hour flight delays at major airport hubs—notably around New York City—as the Federal Aviation Administration began furloughs for its 47,000 workers, including air traffic controllers.
FAA employees will be furloughed for up to 11 days through the end of September. However, a lawsuit filed by two airline trade associations and the Airline Pilots Association Friday is attempting to halt the days of unpaid leave, citing concern over continued air travel disruption and safety. - Read more at The Washington Post
BUSINESSES DODGE TAXES BY BECOMING TRUSTS Private prisons and casinos are declaring themselves as special trusts to reduce and sometimes even eliminate their federal tax bills. Until recently, the trust structure was only used by real estate funds, but now other companies have received special permission from the Internal Revenue Service to use the classification and save millions. For example, the Corrections Corporation, which manages prisons, expects to save $70 million on its 2013 tax bill after switching to the trust structure. “The reason for the tax exemption — was that the trusts do not do any business other than owning real estate,” The New York Times’ Nathaniel Popper writes. “But bit by bit, especially in recent years, that has changed as the I.R.S., in a number of low-profile decisions, has broadened the definition of real estate, and allowed companies to split off parts of their business that are unrelated to real estate.” - Read more at The New York Times
INTERNET SELLERS BRACE FOR ONLINE SALES TAX... A bill swiftly making its way through the Senate would subject all online sales to a state sales tax, with the exception of companies earning less than $1 million in annual gross revenue. The Marketplace Fairness Act is welcome news to cash-strapped states that could bring in an estimated $23 billion in new revenue, according to the National Conference of State Legislatures. And while major retailers like Wal-Mart and Best Buy would be able to handle the additional expenses, small Internet startups would likely be most vulnerable to the new taxes. - Read more at The Fiscal Times
…As eBAY CHIEF PUSHES BACK John Donahoe, eBay’s CEO, emailed at least 40 million eBay users on Sunday, asking them to pressure lawmakers against voting for the online sales tax, arguing that it unfairly burdens small online merchants. - Read more at The Wall Street Journal
STUDENT LOAN SHOWDOWN LOOMS Student groups are ramping up their pressure on Congress to stop student loan rates from automatically doubling from 3.4 percent to 6.8 percent on July 1. But Congress seems nowhere near an agreement, with only one bill in the House introduced by California Democrat Karen Bass, calling to extend the low rate. The legislation isn’t likely to go anywhere in the Republican-controlled House.
The bill even lacks support from President Obama, who has instead called for a market-based rate proposal in his Fiscal 2014 budget. Last year at this time, the low rates were extended as lawmakers in both parties faced harsh pressure from student groups and tuition-paying parents as the 2012 election loomed. This year, lawmakers have displayed far less urgency to address the issue. Meanwhile, students are graduating with an average $26,000 in student loan debt. - Read more at The Hill
SEQUESTERED IRS SHUTS DOWN Internal Revenue Service employees were notified Monday morning that all taxpayer assistance centers across the country will be shut down for five furlough days this summer. National Treasury Employees Union president Colleen Kelly told GovExec that although the furlough days are scheduled after the peak of tax filing season, “considerable tax-filing goes on throughout the year” and the closure will “leave taxpayers out in the cold.” Kelly also said the furloughs come on top of a third year of a pay freeze at the IRS and now employees “face the unwelcome prospect of a pay cut resulting from unpaid furlough days.” The furloughs are currently scheduled for May 24, June 14, July 5, July 22, and Aug. 30, with an additional two still a possibility. - Read more at GovExec