A Look at State Income Tax Issues and Consequences Of the Administration's Proposed International Tax Revisions

The Bloomberg BNA Tax Management Weekly State Tax Report filters through current state developments and analyzes those critical to multistate tax planning.

President Obama's fiscal year 2011 budget includes several proposed revisions to international tax provisions of the Internal Revenue Code—affecting deferred interest expense deductions, Subpart F income, and the “80/20 company” exception. These proposals, if adopted, could pose some complications at the state level, as this article by George J. Barry, of Deloitte Tax LLP, explains. The deferred interest expense is potentially the most problematic, in light of Kraft v. Iowa, which requires states to avoid discriminating in favor of domestic commerce even if the discrimination results from conforming to federal tax law.

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