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

Daily Tax Report: State provides authoritative coverage of state and local tax developments across the 50 U.S. states and the District of Columbia, tracking legislative and regulatory updates,...

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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