Tax Abatement Disclosures

This section will discuss the GASB changes in Tax Abatement Disclosures. Governments that are legally prohibited from disclosing certain tax information should not be required to disclose, but should instead be required to:

1.  identify the general nature of the tax abatement information omitted; and
2. cite the source of the legal prohibition.

For example, governments should not be required to disclose either the number of tax abatement agreements they enter into during the reporting period, or the number of tax abatements in effect at the end of the reporting period.

Governments that receive an offsetting payment should report that payment separately rather than as a reduction to the amount of the tax abatement, and likewise, they should disclose the identity of the other government and the authority for the offsetting payment.

Governments that make one or more additional commitments other than their commitment to reduce taxes should disclose each period, both:

1. a general description of the types of those other commitments, and
2. the most significant individual commitments until those commitments have been fulfilled.

Discretely presented component units should be treated as "other governments" in this case, unless the information on their abatements is considered essential for the fair presentation of the primary government.

If a government chooses to disclose information about individual tax abatement agreements, such disclosures should be consistent for all individual abatements above a quantitative threshold, selected by the government, based on a percentage of the total dollar amount of all abated taxes during the reporting period, and then disclose that threshold.
 

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References

GASB (2015). Statement No. 77 of the Governmental Acounting Standards Board: Tax Abatment Disclousures. Governmental Accounting Standards Series, No. 353. Retrieved from http://www.gasb.org/jsp/GASB/Document_C/GASBDocumentPage?cid=1176166283745&acceptedDisclaimer=true