Update:
The application periods and award amounts for fiscal year 2015-2016 have been announced:
If your company is expanding operations in California you may qualify for the credit but you will not receive a credit unless you apply!
**Update** The President signed the Tax Increase Prevention Act of 2014 (HR 5771) on December 19, 2014.
The Senate late yesterday voted 76 to 16 to pass H.R. 5771, The Tax Increase Prevention Act of 2014. I have to say it’s hard not to crack a somewhat cynical smile when looking at the title of this bill. The Senate approved without any changes the House of Representatives tax extenders bill passed late last week. The bill now heads to the White House where President Obama is expected to sign it into law today. It should be noted that these provisions will expire again in 15 days.
The House of Representatives voted on Wednesday to renew more than 50 expired tax provisions for individuals and businesses through the end of 2014. The vote was overwhelmingly in favor of the limited extension of these provisions in spite of not making anyone happy. If the Senate agrees with the proposal and there is a strong indication they will, the bill will proceed to President Obama for his signature. While not what Obama wanted, the bill represents a compromise in order to get something done before Congress adjourns for the holidays on December 11. This one year renewal essentially establishes tax laws that will have a shelf life of less than 30 days as they will again expire on December 31.
Washington Update: Congress says Internet stays Tax Free until December 11, 2014! Congressional delays on Extenders Bill making even the IRS nervous.
The US House of Representatives and the Senate have recently agreed on a short –term extension to the Internet Tax Freedom Act (ITFA) until December 11, 2014. Both houses agreed to the extension so that they could go into recess until after the November 4 midterm elections.
The House of Representatives passed a bill, HR 4, on Thursday (9/18/14) which would retroactively extend the life of certain tax provisions which expired at the end of 2013. The most notable provision is the research credit. Under the House Bill the research credit would be made permanent, along with a few other expired tax provisions such as bonus depreciation, expensing of certain fixed asset purchases and certain provision related to S Corporations. It would also retroactively repeal the medical device excise tax.
The OECD (Organization for Economic Co-operation and Development) has released this week the first seven deliverables under its previously announced BEPS Action Plan. BEPS is short for Base Erosion and Profit Shifting, a term otherwise known by the general public as abusive tax avoidance by multinational corporations. These proposed rule changes are aimed at ensuring corporate profits are taxed where the economic activity generating the activity is performed and where value is created. They intend to severely limit the ability for corporations to artificially shift profits from high tax jurisdictions to low or no tax jurisdictions.
By Michael McAndrews, ASL Principal
U.S. companies expanding into foreign markets must address a myriad of considerations to give their expansion plans the greatest chance for success. In addition to market focused, operational and cost issues, there are numerous other considerations including but not limited to legal, regulatory, finance, human resources and tax. The form of operation the US Company should take is often determined by a thorough analysis of these various considerations. This analysis often results in a branch vs subsidiary discussion.
As we reach the end of 2013, revisiting the Qualified Small Business Stock (QSBS) provisions under both federal and California tax law should be a top priority. For federal purposes, a significantly advantageous provision is set to expire on December 31. Earlier in 2013 passage of the American Taxpayer Relief Act of 2012 extended the favorable gain exclusion provisions for QSBS retroactively through the end of 2013 for regular and alternative minimum tax purposes.
