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2015 State and Local Tax Legislative Outlook

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,...

Senate Passes 2014 Tax Extenders, White House Opposition Unlikely

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...

New York Tax Reform Made Easy: A Recap

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...

House Passes 2014 Tax Extenders, Senate Will Likely Follow Suit

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...

One Extenders Deal Put Off After Veto Threat, 2014 Extension Vote May Be Coming Soon

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. ...

New Inversion Notices Forthcoming

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...

The “Very Near Future” is Now: Treasury and IRS Release Anti-Inversion Notice

After much anticipation, the Treasury Department and IRS released new “anti-inversion” guidance on September 22, in Notice 2014-52.  The Notice announces forthcoming regulations that are targeted at reducing some of the perceived economic benefits of inverting.  The forthcoming regulations would apply primarily to companies which complete inversions on or after September...

Lew: Inversion Guidance Coming “Very, Very Soon,” Rather than Just in the “Very Near Future”

Anti-inversion guidance from Treasury is now a near-certainty, but when they arrive and how they will operate remains a mystery.  Treasury Secretary Jacob Lew used strong language to warn corporations against inverting in a September 17th interview with Bloomberg Television.  “Any company considering an inversion is now on notice that there is action that is going to be taken,”...

Schumer-Durbin Target Earnings Stripping

The change from summer to fall did nothing to alter the focus of the Congressional tax debate – inversions.  To that end, two Senators have introduced a new bill on “earnings stripping.” Senators Charles Schumer (D-NY) and Dick Durbin (D-Ill.) introduced new legislation on September 11 that would significantly limit earnings stripping by inverted companies.  The...

The Topsy Turvy Status of Inversions – Levins Move Forward, Wyden and Pfizer Move Back

Senator Carl Levin (D-Mich.) and 13 other Senate Democrats introduced legislation on May 20th that would significantly reduce the ability of U.S. companies to expatriate.  The Stop Corporate Inversions Act of 2014 would generally enact President Obama’s budget proposal targeting corporate inversions (see our prior post) by reducing from 80% to 50% the post-inversion ownership...

FATCA Enforcement Relaxed Until 2016

Like the Rolling Stones, those facing FATCA obligations are saying “Time is On My Side.”  Withholding agents, foreign financial institutions (FFIs), and other entities making “good faith efforts to comply with the new regulations, forms, and other requirements of [the Foreign Account Tax Compliance Act]” will only face light enforcement for two years, the IRS said in...

OECD’s BEPS Hybrid Draft Tells Rest of Europe to be More Like Germany

The OECD’s Base Erosion and Profit Shifting (BEPS) project continues apace, and information on the direction of the project is getting out.  On February 10, Tax Analysts’ Lee Sheppard reported on a leaked draft report dealing with hybrid entities (entities which are treated as separate entities in one jurisdiction but are disregarded as separate entities or treated as pass-through...

Tax Foundation Skeptical About Retroactive Tax Increases in Baucus Discussion Drafts

In a December 9 report, the Tax Foundation analyzed three tax increases contained within Senator Max Baucus’s (D-Mont.) recent tax reform discussion drafts.  Among the revenue-generating measures Sen. Baucus has proposed to help pay for a reduction in the corporate tax rate, the Tax Foundation identified these three as having a retroactive effect: the deemed repatriation of certain...

Baucus Proposes Major Overhaul to Energy Incentives

Senator Max Baucus (D-Mont.) issued a new discussion draft this week that proposes to overhaul federal tax incentives for energy.  The proposal would replace most of the more than 40 existing incentives with two new tax credits for the cleaner production of electricity and transportation fuels. Under the proposed clean electricity tax credit, any facility producing electricity that is...

AICPA Opposes the Limitations on the Availability of Cash Method of Accounting under Baucus’s Proposal

On December 5, the American Institute for CPAs (“AICPA”) detailed their views on Senate Finance Committee Chairman Max Baucus’s (D-Mont.) tax reform discussion draft on tax accounting.  AICPA supports the expansion of the number of taxpayers that may use the cash method of accounting, and had concerns regarding Sen. Baucus’s proposal restricting the availability of the cash...

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