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Nation

SMALL BUSINESS HEALTH PLAN INCHING TOWARD HOUSE APPROVAL
On Wednesday, March 15, the House Education and Workforce Committee approved H.R. 525, the Small Business Health Fairness Act, on a vote of 25-22. The bill will be considered by the full House sometime after the Easter recess. The Senate has yet to schedule any action on S. 406, the Senate companion bill to HR 525. The legislation, which is one of NAR's top priorities, would allow small businesses and self-employed workers to band together through a trade or professional association to negotiate lower health insurance costs for participants. Small business health plans, sometimes referred to as association health plans, would operate under the same rules as federally regulated large corporate and union health plans. Most REALTORS® are small business people or independent contractors who struggle to find low-cost, high-quality health care for their employees and families. Small business health plans will give small business and self-employed workers the same right to quality, affordable health insurance as corporate employees and union members.

BUSH FY 2006 BUDGET INCLUDES FAVORABLE REAL ESTATE PROVISIONS
The Bush Administration’s fiscal Year 2006 budget that was sent to Congress in February includes a homeownership tax credit that is intended to encourage developers to build for-sale housing at modest prices by giving them a tax incentive. The tax incentive can be sold to investors or used by the developer. Other Bush budget provision of interest to Realtors® include: making the 15 percent capital gains tax rate permanent; making the repeal of the estate tax permanent; enacting tax incentives to make it easier for individuals to acquire health insurance or create health savings accounts; clarifying that flood mitigation grants from the Federal Emergency Management Administration aren’t taxed as income; making the deduction for brownfield cleanup permanent; authorizing $200 million for assistance to buyers under the American Dream Downpayment Initiative; increasing funding for rural housing loan guarantees; and, authorizing FHA zero-downpayment and subprime loan products.

IRS RELEASES SALES TAX DEDUCTION GUIDANCE
The 2004 JOBS tax legislation included a provision that would allow individuals to deduct state and local sales taxes for tax years 2004 and 2005. Taxpayers could elect to deduct either their sales taxes or their state and local income taxes, but not both. The IRS has released Notice 2005-31 that provides guidance to individuals who will make that election. The election will be made on a yearly basis, so an individual could deduct sales taxes in one year and income taxes in the other. Taxpayers who take the sales tax deduction may either use a table the IRS provides or may use actual expenditures. Guidance is also provided for instances in which a taxpayer lived in two different states and for married taxpayers who live in different states and file separately.

GAO TO REVIEW REAL ESTATE COMPETITION U.S. House of Representatives Financial Services Committee Chairman Mike Oxley, R-Ohio, and Ranking Minority Member Barney Frank, D-Mass., have requested the U.S. Government Accountability Office to study competition in the real estate industry. The lawmakers asked the GAO to report on the size of the U.S. residential real estate market, the number of closed transactions and total value of property sold last year, and the number of licensed real estate practitioners. They also asked GAO to compare the increase in housing prices with the rate of inflation over the past five years, and how and whether consumers benefit from competition in the residential real estate brokerage market. Additionally, they asked whether state-chartered depository institutions that engage in real estate brokerage and settlement services "have any negative effects on competition or consumers." Representatives of the National Association of REALTORS® will meet with GAO staff to provide information that aims to show that the real estate industry is one of the most competitive in the country, say NAR analysts. NAR information will also show that homeownership has grown to unprecedented levels and that real estate has sustained the economy for over a decade.

FINAL CAN-SPAM RULES WENT INTO EFFECT ON MARCH 28
The Federal Trade Commission's so-called "primary purpose" rules governing the distribution of commercial e-mails went into effect on March 28, 2005. The new rules don't change the regulations encompassed in the CAN-SPAM Act that took effect in January 2004; rather, they offer criteria you can use to determine whether your e-mails are classified as "commercial" and are subject to the law. For example, under the rules, e-mails are deemed commercial if they contain only an advertisement or promotion of a commercial product or service, or if the subject line would lead the e-mail recipient to believe that the message contains commercial content. The rules also set forth criteria intended to help a sender determine when e-mails containing both commercial and noncommercial content will be subject to CAN-SPAM's requirements. Commercial e-mails must follow all of the provisions of the CAN-SPAM Act. The law bans false or misleading header information, prohibits deceptive subject lines, requires that your e-mail give recipients an opt-out method, and requires the e-mail to be identified as an advertisement and include the sender's valid physical postal address.