80/20 Companies and Foreign-Source Income: State Treatment

Description

Notwithstanding the pending elimination of federal tax benefits for non-grandfathered 80/20 companies, the structure remains recognized by many states. Wide variations persist in how these states treat 80/20 companies and foreign-source income and dividends generally.

State laws and regulations are complex and their tests differ as to how companies that set up an 80/20 entity with most of their payroll or property in a foreign country can shield their income from taxation and/or deduct their inter-company royalties, dividends, services, etc.

80/20 companies are an example of the variations in the broader state treatment of income and dividends attributable to foreign business activities. Corporate tax professionals must stay up to date on current legislative, regulatory and court developments in this area to adjust accordingly.

Listen as our panel of experienced tax advisors reviews the evolving landscape of state tax treatment of foreign business activities.

Outline

1. General environment, state treatment of foreign source income
   1. Examples of state laws and regs regarding:
      1. Foreign source income
      2. Foreign operating corporations
      3. Dividends from foreign entities
      4. Royalties and interest paid to foreign companies
      5. Intra-group service payments
      6. State tests for allowing exclusions and deductions
2. State treatment of 80/20 companies
   1. Examples of state laws and regs regarding:
      1. Apportionment or other tests
      2. Method for establishing an 80/20 entity
3. Tax planning issues for multi-state companies to address

Benefits

The panel will explore state treatment of:

• Foreign-source income and income from foreign operating corporations.
• 80/20 company income and deductions.
• Subtractions of dividends paid by foreign entities.
• Royalties and interest paid to foreign corporate parents.
• Other relevant tax compliance and planning aspects.

Upon completion of this webinar, you will have a better handle on how states treat foreign-source income and dividends generally, and 80/20 companies. You also will have new approaches to state tax compliance and planning to consider.

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