Posted by Brittany Edwards-Franklin on Mar 20, 2015
On January 6, the House adopted rules that require the Congressional Budget Office and the Joint Committee on Taxation to use macroeconomic or “dynamic” scoring in forecasting the budgetary impact of proposed legislation. Under this system, which is a change from the previous “static” scoring methodologies, calculating the forecasted fiscal impact of major legislation will consider factors such as employment, economic output, and inflation. Proposed legislation triggering dynamic scoring must be “major,” which the rules define as having a budgetary effect of more than 0.25% of...
Posted by William Pauls on Feb 3, 2015
On February 2, the Obama Administration released its fiscal year 2016 budget (FY 2016 Budget). The hallmarks of the FY 2016 Budget are proposals that would impose (i) a minimum tax on the current foreign earnings of U.S. corporations and their controlled foreign corporations (CFCs) and (ii) a one-time 14% tax on earnings accumulated in CFCs and not previously subject to U.S. tax. Moreover, in keeping with the Administration’s past budgets, the FY 2016 Budget includes several proposals that target insurance companies or that otherwise would have a direct effect on them. Specifically, those...
Posted by Daniel Nicholas on Jan 26, 2015
On Saturday, January 17, 2015, President Obama released a Fact Sheet outlining a new plan to “to simplify our complex tax code for individuals, make it fairer by eliminating some of the biggest loopholes, and use the savings to responsibly pay for the investments we need to help middle class families get ahead and grow the economy.” The fact sheet is sparse on details but is likely to be expanded upon in the President’s budget.
Although it does not fit neatly in to the loophole-closing rhetoric, the new plan includes a new fee on large, highly-leveraged financial institutions to...
Posted by Sutherland SALT on Jan 7, 2015
Members of Congress aren’t the only ones addressing tax reform – state legislatures across the country are gearing up for what looks to be an active 2015 legislative session. After a wave of Republican victories in November, tax reform will be on the legislative docket in many states this year.
Practical and political considerations can make state tax reform a challenge. Take, for example, Wisconsin, which recently published a report that was the culmination of many months of public roundtables to review the impact of the state’s tax laws. Although the report identified numerous...
Posted by Brittany Edwards-Franklin on Dec 18, 2014
On December 16, in a vote of 76 to 16, the Senate passed the long-anticipated “extenders bill,” extending 55 tax provisions that expired at the end of 2013. The bill had been passed by the House of Representatives on December 3, 2014 and now heads to the President’s desk where it is expected to be signed into law.
As a one-year extension of tax provisions that expired on December 31, 2013, it is retroactive to January 1, 2014; but it allows all the extended provisions to expire again on December 31, 2014, just 15 days after the bill’s passage by the Senate. Expressing...
Posted by Rich Sun on Dec 17, 2014
As the Treasury Department considers additional steps it may take addressing corporate inversion transactions, IRS Commissioner John Koskinen is saying that, to a “substantial extent,” Congress would need to act if it wishes to prevent the transactions. In a conversation with Bloomberg BNA Koskinen stated that, while the inversion issue is being carefully examined by the administration and the policy decisions rest with the Treasury, “it has been clear from the start that there are limits as to what the Treasury and IRS regulatory process can accomplish.” According to...
Posted by Sutherland SALT on Dec 17, 2014
The New York State Department of Taxation and Finance has issued guidance on the sales tax, corporation franchise tax, and personal income tax implications of transactions involving convertible virtual currency, such as bitcoins. See N.Y. TSB-M-14(5)C, (7)I, (17)S, Dec. 5, 2014. The Department’s guidance can be found here. As summarized below, the Department explains in its guidance that convertible virtual currency will be treated as intangible personal property, and the resulting New York tax consequences will flow from that characterization.
For New York sales tax purposes, the...
Posted by Jessica Englert on Dec 8, 2014
Even as a veto threat derailed a large tax extenders deal, President Obama is holding out hope that Congress can move forward on tax reform. Addressing corporate CEOs at a Business Roundtable meeting on December 3rd, the President said there was “definitely a deal to be done.” He told the corporate leaders he may be willing to accept the short-term tax break extensions (which passed in the House hours after the meeting) in order to jumpstart cooperation on broader reform. The President said he still prioritizes simplification of the tax code for both individuals and corporations,...
Posted by Sutherland SALT on Dec 8, 2014
When the ball drops in Times Square on New Year’s Eve, New Yorkers won’t just be celebrating a change in the calendar – they’ll also be figuring out how to address a slew of tax changes under New York state law. On March 31, 2014, New York State Governor Andrew Cuomo signed into law the 2014-2015 New York State Budget (Budget), which results in the most significant overhaul of New York’s franchise tax in decades. The Budget brings about monumental change for corporate taxation in New York by eliminating the Bank Franchise Tax (Article 32), subjecting financial institutions to...
Posted by Meyer Berman on Dec 5, 2014
In an overwhelming vote of 378 to 46, the House of Representatives passed a one-year extension on 55 tax provisions which expired at the end of 2013, so called “tax extenders.” The tax extenders bill includes numerous popular business tax breaks, like the research credit (with a price tag of $7.6 billion according to the Joint Committee on Taxation), the new markets tax credit ($978 million), bonus depreciation ($1.5 billion), renewable fuels, corporate expensing, and the Subpart F exception for active financing income. The bill also includes some popular tax breaks for...
Posted by Jonathan Goldman on Dec 2, 2014
For a few hours last week, it appeared that there was a bipartisan agreement on expiring tax provisions, but shortly after press reports on the deal, the agreement fell apart under threat of a White House veto. In a surprise to many, about 10 expiring tax provisions would have been made permanent under the agreement, including the research credit and expanded section 179 expensing. The agreement would have extended almost all the remaining expiring tax provisions through 2015. A notable exception is that the wind production tax credit would have been phased out.
Almost as soon as news...
Posted by Tax Blog Admin on Nov 10, 2014
On October 29, more than 50 countries signed on to implement OECD standard for automatic exchange of information starting in 2017 or 2018. The Secretary-General of the OECD, Angel Gurria, announced at the end of the Global Forum on Transparency and Exchange of Information for Tax Purposes that of the 123 Global Forum members, close to 90 agreed to implement the international standards. The new measures will be employed by 51 of the signatories beginning in 2017 or 2018, with the remaining jurisdictions to follow thereafter.
Signatories include countries that have historically shied away...
Posted by Tax Blog Admin on Nov 10, 2014
Our prior post on Notice 2014-52, Treasury’s crackdown on corporate inversions, outlined potential tools Treasury would consider using to counteract the attractiveness of inverting. The Treasury Office of International Tax Council announced that at least one additional notice will likely be released prior to the issuance of the regulations, although the timing of the release is still unclear.
Douglas Poms, senior counsel at the Treasury Dept., stated that the upcoming notice(s) will address earnings stripping and “additional inversion issues.” Poms indicated, however, that if the...
Posted by Jonathan Goldman on Nov 10, 2014
Treasury Department officials are stating publicly the potential methods it is considering to reduce the benefit of inversion transactions through so-called “earnings stripping.” According to reports of an October 29 panel discussion, Treasury is considering cutting back on interest deductions under section 163(j), or treating certain instruments as equity rather than debt under section 385.
Treasury issued Notice 2014-52 in September (see our prior post), announcing forthcoming regulations which would impact what mergers would be within the purview of section 7874, the tax...
Posted by Tax Blog Admin on Oct 30, 2014
Switzerland recently announced intentions for draft legislation to provide authority for amending existing double taxation avoidance agreements that would bring them in line with the OECD’s standard for exchange of information provisions. The proposal would authorize the use of a unilateral extension to execute the amendments. The amendments would apply the OECD standard to any existing treaty in which the counterparty agrees to exchange tax information with Switzerland upon request.
In addition to the renegotiation of existing tax treaties (currently numbering 69), under the draft...