- An IRS “practice unit” (guidance for IRS personnel) was publicly issued concerning “functional currency determination.”
- The U.S. Court of Appeals for the Ninth Circuit affirmed the U.S. Tax Court’s dismissal of a petition challenging a notice of Final Partnership Administrative Adjustment (FPAA) for lack of jurisdiction. The Ninth Circuit concluded that an entity’s disregarded status did not preclude its classification as a pass-thru partner. Note that legislation in 2015 repeals the subject TEFRA partnership audit rules for tax years beginning in 2018 and replaces them with new rules for partnership audits.
- The U.S. Supreme Court issued an opinion concluding that a “church plan” maintained by a principal-purpose organization qualifies as a “church plan” for ERISA purposes, regardless of who established it.
- Newly enacted legislation in Minnesota expands the sales and use tax nexus rules, and revises when a retailer is considered to have a sales and use tax collection obligation on sales made to in-state customers. There is also a collection requirement imposed on certain marketplace providers.
- The New Jersey Tax Court held that a taxpayer that paid royalties to its parent company—a computer software developer—qualified for the “unreasonable exception” to the state’s intangible expense addback statute. Under New Jersey law, royalties and other intangible expenses paid to a related party are required to be added back in determining taxable income, but there are various exceptions to the addback requirement, including if requiring the addback would be “unreasonable.”
- The Ohio Board of Tax Appeals held that certain promotional items purchased by a professional baseball team were not “resold” to patrons as part of the ticket price, and thus affirmed the use tax assessed on the costs of the items purchased by the baseball team.
- The Pennsylvania Commonwealth Court held that a township’s business privilege tax imposed on franchise fees of a Texas-based corporation owner and operator of convenience stores violated the Commerce Clause of the U.S. Constitution because the tax was not fairly apportioned. The franchise fees were paid in exchange for various services provided at the company’s Texas headquarters and elsewhere, and as such, the fees collected from the Pennsylvania stores were the product of interstate commerce and must be apportioned.
Read TaxNewsFlash-United States
- U.S. Senate Finance Committee Chairman Orrin Hatch (R-UT) discussed current efforts of the Congress and the administration to unite behind a tax overhaul plan and stated that “virtually any potential offset for reduced tax rates should be on the table.”
- The Trump Administration proposes that certain federal aviation-related excise taxes would “sunset” as part of a plan to reform and “privatize” the air traffic control system. The proposal would make the air traffic control entity a self-sustaining function, financed through fees paid by the users of the national air space instead of the current system of federal excise taxes.
Read TaxNewsFlash-Legislative Updates
- The IRS reminded foreign financial institutions (FFIs) required to renew their FFI agreement of a 31 July 2017 due date and that failure to renew by 31 July 2017, will be treated as terminating the FFI agreements as of 1 January 2017.
Read TaxNewsFlash-FATCA / IGA / CRS
- U.S. Customs and Border Protection announced that a long-delayed plan to transition to the Automated Commercial Environment (ACE) as the sole electronic data interchange system for processing electronic drawback and duty deferral entry and entry summary filings is now scheduled to be effective 8 July 2017.
Read TaxNewsFlash-Trade & Customs