Dec 14 (Reuters) – A landmark agreement forged 45 years ago
to make corporate taxation more uniform among U.S. states is at
the center of a court fight between California and Gillette Co,
potentially leading to more tax conflict between states and big
Gillette, the razor giant owned by Ohio-based Procter &
Gamble Co, wants to be able to use the 1967 Multistate
Tax Compact (MTC) to determine how much tax it owes California.
This would cut Gillette’s 1997-2004 tax bill by more than $4
million. The company is seeking a rebate of taxes already paid.
(Reuters) – When associates at New York law firm Weil, Gotshal & Manges learned about their annual bonuses last month, the details came as a bit of a jolt – not because of the amount, but rather on account of the timing.
In a departure from recent practice, the firm said it would deliver the bonuses in January instead of December, according to an account in the legal blog Above the Law.
While the inhabitants of Capitol Hill and the White House argue over tax breaks for the wealthy, a member of Swaziland’s parliament has struck upon a potential partial solution to the cash crisis in Africa’s last monarchy: hike taxes on witch-doctors.
While tax negotiations continue on Capitol Hill, here are some additional important tax and accounting events in the week ahead:
Tuesday, Dec. 11
* Claudius B. Modesti, director of the U.S. Public Company Accounting Oversight Board’s division of enforcement and investigations, speaks to the New York City Bar Securities Litigation & Enforcement Institute. New York.
(Reuters) – Bain Capital has been leading private equity firms in using a controversial financing strategy to generate low-tax special dividends for itself and its investors for nearly the last decade.
A Reuters analysis shows Boston-based Bain had done more “dividend recapitalization” loans from 2003 through last June than TPG Capital LP TPG.UL, Blackstone Group LP (BX.N: Quote, Profile, Research, Stock Buzz) and other rival private equity firms.
Tuesday, Nov. 27 * U.S. Senator Dick Durbin, Majority Whip, speaks on the fiscal showdown and deficit reduction. 11:30 a.m. ET, Center for American Progress Action Fund. Washington.
Wednesday, Nov. 28 * Public Company Accounting Oversight Board open meeting on 2013 budget and strategic plan. Washington.
Just how important is it for public companies to post earnings that meet investors’ expectations? Important enough to knowingly pay more in taxes, according to a recent study by academics at Duke, MIT and UC Irvine, ”Incentives for Tax Planning and Avoidance: Evidence from the Field.”
It’s hard to get surprised about the idea that meeting or beting their earnings numbers is important to companies, but Duke Professor John Graham, an author of the paper, was surprised that the 600 corporate tax executives they interviewed overwhelmingly said they’d trade real hard cash paid to the government in taxes in exchange for a boost to the earnings number reported to shareholders.
Nov 16 (Reuters) – A new online exchange in New Orleans
allows participants to trade transferable state tax credits, an
estimated $5-billion annual market that has been generating more
complaints about the costs of taxpayer-backed incentives that
aim to attract targeted industries to states.
Up and running for just four weeks, the Online Incentives
Exchange (OIX) has traded more than $1 million in Louisiana tax
credits. It hopes to offer credits from 45 states by the end of
2013, according to management.
(Reuters) – U.S. states, cities and towns, still wounded by losses of jobs and tax revenue during the recession, warned Washington on Thursday that they are in poor shape to withstand another hit if Congress takes no action to stave off sharp automatic budget cuts mandated at the “fiscal cliff” deadline.
Conveying concern to Congress, 14 U.S. mayors visited Capitol Hill on Thursday, while the Pew Center on the States, a think tank, released a study saying some jurisdictions would fare far worse than others.
Nov 15 (Reuters) – U.S. states, cities and towns, still
wounded by losses of jobs and tax revenue during the recession,
warned Washington on Thursday that they are in poor shape to
withstand another hit if Congress takes no action to stave off
sharp automatic budget cuts mandated at the “fiscal cliff”
Conveying concern to Congress, 14 U.S. mayors visited
Capitol Hill on Thursday, while the Pew Center on the States, a
think tank, released a study saying some jurisdictions would
fare far worse than others.