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State Taxation of Income From Foreign Affiliates After the Tax Reform

Multistate Treatment of GILTI, FDII, Section 250 Deductions and Other Tax Issues

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Thursday, July 11, 2019

Recorded event now available

or call 1-800-926-7926

This course will provide tax specialists, advisers, and counsel with a deeper understanding of crucial multistate tax developments involving taxation of income derived from foreign affiliates and subsidiaries post Tax Cuts and Jobs Act (“TCJA”) of 2017. State taxation of GILTI varies depending on how states conform to TCJA and federal consolidated return regulations. For instance, some states do not conform to TCJA and thus do not include GILTI in their tax base and apportionment. Conforming states, however, may include GILTI in the tax base and tax it on the gross or net basis, exclude GILTI from the base, apply a subtraction modification, treat it similarly to Subpart F or dividend income. States treatment of including, excluding, or using a new method of apportioning GILTI provides additional compliance challenges. The panel will outline their perspectives and offer practical tools for strategic tax planning for tax managers and counsel to multistate companies.

Description

Taxation of a U.S.-based multi-national company's foreign earnings and profits don't just involve federal income tax and the IRS. State taxes also pose critical and sophisticated tax planning and compliance challenges.

Complying with state rules for Subpart F income has always created challenges. Counsel and advisers to companies with foreign operations must wade through differing laws and regulations on the treatment of GILTI inclusion, FDII, and the relative Section 250 deduction. Worldwide versus water's edge combined reporting, separate company reporting, and apportionment factors representation provide additional concerns for taxpayers with operations in multiple jurisdictions.

Listen as our panel improves your grasp of state corporate income tax treatment of foreign business entity income. Our panel will explain the degree to which a state will match the Internal Revenue Code on the treatment of foreign income varies, provide an overview of current multistate trends in this area, and outline numerous specific state examples for state tax specialist advisers.

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Outline

  1. States treatment of foreign affiliates income before tax reform
  2. Repatriation transition tax
  3. GILTI and the Section 250 deduction
  4. FDII deduction
  5. Issues with apportionment factors
  6. Other state taxation issues

Benefits

The panel will answer these and other essential questions:

  • How are states and local jurisdictions treating GILTI and FDII?
  • How are states calculating handling the relevant Section 250 deduction?
  • From a state perspective, how does GILTI interact with other provisions in the TCJA?
  • With GILTI in place, do states still need tax haven rules?
  • Do states typically require worldwide combined, or water's edge, reporting of worldwide groups?
  • Are states flexible with apportionment formula when income comes from overseas?

Faculty

Hamme, Evan
Evan M. Hamme
Atty
Pillsbury Winthrop Shaw Pittman

Mr. Hamme advises clients on all areas of state and local taxation, including income, franchise, excise, sales and use...  |  Read More

Lipin, Ilya
Ilya A. Lipin
Tax Principal, Atlantic Region State and Local Tax Practice Leader
BDO USA

Mr. Lipin provides clients with state tax advice in the area of multistate income taxes, sales and use taxes, tax...  |  Read More

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