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Author
Multistate Tax Services, Deloitte Tax LLP
Multistate Tax News is a quarterly newsletter of our Multistate Tax practice, edited to the specific interests of our clients. The publication showcases current multistate developments, articles on substantive issues, explanations of key state tax concepts and notification of upcoming company-sponsored symposiums and forums open to a public audience.
This issue of Multistate Tax News features the following topics:
· State Tax Aspects of the Federal Section 965 One-Time 85 Percent Dividend Received Deduction – Many U.S. corporations are currently planning to repatriate earnings from their controlled foreign corporations (CFCs) to take advantage of the 85 percent dividends received deduction (DRD) under Internal Revenue Code (IRC) § 965, added by the American Jobs Creation Act (AJCA) of 2004. Although many states already exclude 100 percent of foreign dividends from income, a number of states depart from this general rule. In addition, there are other less obvious aspects of state income and franchise taxes that might be affected by the decision to receive a dividend. Accordingly, consideration of dividend repatriation from a state tax perspective is appropriate.
· Are Your Company’s Multistate Sales Tax Exemption Certificates in Order? – Considered an administrative nuisance by some businesses, exemption certificate collection and retention management is often treated as a low-priority item until the sales tax auditor is at the door. If your company’s exemption certificate process is geared toward reviewing and obtaining proper certification only when requested to via an audit, there is a significant risk of increased sales tax exposure.
· Summary of Enacted Multistate Tax Legislation: January through May 2005 – Several states, notably Arizona, Georgia, Kentucky and New York, enacted important tax legislation early in this year’s legislative season. This article surveys the more significant aspects of this year’s new laws enacted through May 2005, including addbacks for certain intercompany expenses, changes toward single-sales factor income apportionment, tax shelters, nexus and amnesty.
See the attached file for full details.
Please contact our Multistate Tax Group for more information.
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State Tax Aspects of the Federal Section 965 One-Time 85% Dividend Received Deduction
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