2008 ofii tax conference la quinta, ca 1 organization for international investment state and local...

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2008 OFII Tax Conference La Quinta, CA

ORGANIZATION FOR INTERNATIONAL INVESTMENT

STATE AND LOCAL TAX DEVELOPMENTS

May 1, 2008

Richard A. LeavyMayer Brown LLPNew York(212) [email protected]

May 2008

Phil ZinnPricewaterhouseCoopers LLPNew York(646) [email protected]

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I. Nexus

II. Apportionment/UDITPA

III. Combination

IV. Gross Receipts Taxes

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Nexus

A. Taxpayer Nexus

B. Transactional Nexus

C. Economic Nexus

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NexusA. Taxpayer Nexus

1. Property/People/Intangibles

a. 0-5 Days

b. 6-10 Days

c. 0-5 Days

2. Alter Ego Nexus

3. Affiliate Nexus

4. Agency Nexus

5. BATSA Legislation

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NexusB. Transactional Nexus

1. Ford Motor Co. v. Seattle, United States Supreme Court Dkt. No. 07-623, petition for certiorari denied February 19, 2008

2. MeadWestvaco Corp v. Illinois, United States Supreme Court Dkt. No. No. 06-666, Argued November 5, 2007

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Nexus

C. Economic Nexus

1. Lanco, Inc. v. Director, Division of Taxation, United States Supreme Court Dkt. No. 06-1236, petition for certiorari denied June 18, 2007

2. FIA Card Services NA, f/k/a MBNA America Bank NA, v. Tax Commission, No. 06-1228, petition for certiorari denied June 18, 2007

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II. Apportionment/UDITPA

A. Multifactor vs. Single Factor

B. Measuring of Receipts

C. Sourcing of Receipts

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Apportionment/UDITPA

A. Multifactor vs. Single Factor

1. Michigan (MBT)

2. New York

3. Pennsylvania

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Apportionment/UDITPA

B. Measuring of Receipts

1. Gross vs. Net

2. General Mills

3. Microsoft/GM

4. Special Industries

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Apportionment/UDITPAC. Sourcing of Receipts

1. UDITPA § 17

2. Market vs. Cost of Performance

3. Maryland

4. Michigan

5. New Jersey (Throw Out)

6. South Carolina

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III. Combination

A. Legislative Trends Toward Combination

B. Implementation Mechanics

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Combination

A. Legislative Trends Toward Combination

1. Massachusetts

2. Texas

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Combination

B. Implementation Mechanics

1. Combination vs. Consolidation

2. Types of Combination/Consolidation

a. Absolute

b. Elective

c. Forced

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Combination - Implementation3. New York

a. In re Bausch & Lomb, Inc., New York Division of Tax Appeals, Tax Appeals Tribunal, DTA No. 819883, December 20, 2007

b. In re Univisa, Inc., New York Division of Tax Appeals, Tax Appeals Tribunal, DTA No. 820289, September 20, 2007

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Combination - Implementation4. Industry Specific Issues

a. Conglomerates

b. Manufacturers

c. Banking/Insurance

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Combination - Implementation

5. Joyce vs. Finnegan

6. Inclusion/Exclusion

a. Water's Edge Elections

b. 80/20 Companies

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IV. Gross Receipts Taxes

A. Michigan Business Tax

B. Ohio Commercial Activity Tax

C. Texas Franchise (Margins) Tax

D. Washington Business and Occupation Tax

2008 ofii tax conference la quinta, ca 1 organization for international investment state and local...

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