Tax on factoring differences

A bill in progress introduced by Florida and California congressmen Shaw and Stark would require factoring companies that buy structured settlement payments to pay a 40% federal excise tax on the difference between value of settlement and cash payment. It is payable immediately, unless the deal has gained court approval as being in the best interests of the victim, and also taking account of the welfare of the victim’s dependants and any existing laws or court orders. The Structured Settlement Protection Act is part of an overall package that includes state model legislation agreed to by the structured settlement and settlement-purchasing industries.