What must tax ordinances conform to?
Understand the Problem
The question is asking about the requirements or frameworks that tax ordinances must adhere to or comply with. This typically relates to legal standards, constitutional limits, or regulations established by governing bodies.
Answer
Tax ordinances must conform to the Internal Revenue Code.
Tax ordinances must conform to the Internal Revenue Code (IRC), either through static conformity or rolling conformity.
Answer for screen readers
Tax ordinances must conform to the Internal Revenue Code (IRC), either through static conformity or rolling conformity.
More Information
States generally align their tax codes with the federal Internal Revenue Code to simplify tax processes. Conformity can be "static," with fixed adherence to a specific version of the IRC, or "rolling," automatically adopting new federal changes unless otherwise decided by state legislators.
Tips
One common mistake is assuming all states fully align with the federal tax code; in reality, many states selectively conform and may "decouple" from certain federal provisions.
Sources
- Understanding state tax conformity - The Tax Adviser - thetaxadviser.com
- How do state individual income taxes conform with federal income ... - taxpolicycenter.org
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