- The U.S. Tax Court held that capital gain realized by a foreign company on the redemption of its interest in a U.S. limited liability company was not U.S.-sourced income and that it was not effectively connected with a U.S. trade or business. The court specifically rejected the position in an IRS revenue ruling—Rev. Rul. 91-32—as to what is effectively connected income. The court stated that it “will not follow Rev. Rul. 91-32.”
- Proposed regulations concerning measures that would have required an exchange or distribution of net value for certain corporate formations and reorganizations to qualify for nonrecognition treatment—in other words, the measures would have affected transactions involving the transfer of no net value—were withdrawn.
- Rev. Proc. 2017-43 includes changes to the existing procedures for approval from the U.S. Treasury Department for a suspension of benefits under a multiemployer defined benefit pension plan that is in “critical and declining status.”
- The U.S. Tax Court issued a “reviewed opinion” holding that, for purposes of landfill reclamation and closing costs, references to “taxpayer” in section 468 mean both cash-method taxpayers and accrual-method taxpayers.
- New law in Washington State requires a remote seller meeting a specified threshold of gross receipts from retail sales to “elect” either to collect retail sales or use tax on taxable retail sales or to comply with certain sales and use tax notice and reporting provisions. This new measures also extends to marketplace facilitators that facilitate sales on behalf of third-party remote sellers as well as referrers.
- The Indiana Department of Revenue issued a “Letter of Findings,” determining that repair parts purchased for soft drink machines qualified for the state’s manufacturing exemption.
- Newly enacted legislation in New Hampshire reduces the rate of the business profits tax (BPT) to 7.7% and then to 7.5% for subsequent tax periods. The business enterprise tax (BET) rate is reduced to 0.6%, and then to 0.5% for later tax periods.
- An administrative law judge in Washington State found that activities of a wholesale affiliate with Washington nexus—e.g., an independent representative in the state soliciting sales from third-party retailers as well as having an employee in the state interacting with customers—did not create nexus for an online retailer.
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- The U.S. Senate Budget Committee released text and explanations of revisions to the Better Care Reconciliation Act (BCRA) discussion draft. The new draft does not include any changes from current law to the net investment income tax, the additional Medicare health insurance (HI) tax, or the remuneration tax on executive compensation for certain health insurance executives.
- A Joint Committee on Taxation (JCT) report describes current law and provides background information relating to federal income tax provisions that affect small businesses.
- The JCT released a report on the estimated budget effects of certain tax provisions contained in the administration’s fiscal year 2018 budget proposal that was released on 23 May2017.
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