Tax Committee Update
January 14, 2010
Staff Contact: Ken Pokalsky
The Department of Tax and Finance has confirmed that their Article 9A/32 restructuring proposal will not be in the Executive Budget proposal due out next Tuesday, January 19. They will continue with the drafting process, and expect that a bill draft will be circulated within two to three weeks. Rob Plattner and staff say they remain committed to continuing to work on this initiative with the Business Council and individual businesses.
Today, the Department circulated a revised outline document, plus a status report. The DT&F update is available in PDF format on our web site here.
This January, 2010 update contains several changes:
- It modifies provisions for use of NOL-related credits, to allow use of up to 1/15th of such credit per year over a 20 year period.
- It specifies that “actual interest expenses” related to exempt interest income will be disallowed; it states that the Department will continue to work with business on potential modifications to its existing expense attribution methodologies.
- Clarifies that "more than fifty percent stock ownership" is required for mandated combined reporting.
- It does not include a proposed tax rate. They are still developing a “revenue neutral” rate, and say they may issue their proposed rate by the end of January.
- It does not change provisions related to income from unitary business not included in a combined report, nor net gains or losses from the sale of unitary subsidiaries.
- It does not change the permanent $10 million cap on capital base tax liability.
We had a Tax Committee tentatively scheduled for Wednesday, January 27, but will move that date back to assure that Committee members have had an opportunity to review draft bill text prior to meeting again with the Department. We will get a rescheduled date to you ASAP.