Contact: Tracy Monroe

It was awesome to speak on tax planning for individuals and businesses at the Ohio Society of CPA’s Cleveland Accounting Show this week. Like just about everyone, the group is anxiously awaiting the release of a detailed tax reform plan. There have been a number of recent signs that we should see one very soon.

As discussed in our September 29th blog, the Republican-led House Ways & Means Committee, Senate Finance Committee and President released the Unified Framework for Fixing our Broken Tax Code (Unified Framework). The Unified Framework is consistent with the prior vision outlined by the President and his advisors, and the GOP “A Better Way” blueprint — except this new proposal gives more details.

In other developments, earlier this week the House Democrats released their own framework for tax reform: “Real Reform for Real People.” Much like the Unified Framework, the principles in the Democratic plan are not aligned with specific numbers but instead focused on general goals. House Democrats want to strengthen the Earned Income Credit, Child Tax Credit, American Opportunity Tax Credit and Child Care Tax Credit. The proposal also includes a new tax credit for employers to train and hire new workers through apprenticeship programs and partnerships with community colleges and technical schools. This comes as the Republicans announce the tax reform bill will be released on November 1.

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As was done earlier this year, The Trump Administration, the leaders of the House Ways and Means Committee, and the Senate Finance Committee have released an ambitious proposal to reform the federal tax code, including reducing tax rates for businesses and individuals that, if passed, would amount to a sweeping change to the federal tax code. It purports to be economic growth, American worker and simplification oriented, but the proposal is a general outline with questions still remaining as to what may actually pass, what it will cost, and how this reform can be paid for if not revenue neutral. Rigorous debate is expected and much may, and probably will, change in the months ahead if and when the generalized proposal gets distilled into legislative language. That task will be left to the House and Senate Tax Writing Committees. In the meantime, this is still a good opportunity to review some of the principal features of the President's proposal, which include:

Read more: Trump Tax Reform: A Bold Proposal Short on Details

Article written by FGMK Tax Partner Fuad Saba and Tax Manager Jill Boland

The Republican Party yesterday rolled out its proposed changes to the U.S. tax code, in what may become the most comprehensive overhaul of U.S. tax law since the 1986 Tax Act. The plan espouses four goals: (1) to simplify the tax code; (2) to lower taxes on American workers; (3) to entice companies to do business in the U.S.; and (4) to bring the offshore profits of U.S. companies back to the U.S. The proposed changes would impact the U.S. tax treatment of individuals, corporations, and certain cross-border transactions.

Read more: FGMK Tax Alert: An Overview of the GOP Tax Reform Proposal

Author: Matthew T. Fuller

The Multistate Tax Commission ("MTC") has just announced that it is going forward with a voluntary disclosure program for sellers on Amazon who have created nexus in a state because of their participation in the Fulfillment by Amazon ("FBA") program.  The MTC is an intergovernmental state tax agency that works on behalf of states and taxpayers to facilitate the equitable and efficient administration of state tax laws that apply to multistate and multinational enterprises.

What is the FBA Program and How Does it Create State Tax Nexus? 

Under the FBA program, sellers can list their products with Amazon and have Amazon hold their products at one of its warehouses before shipping products to the purchaser.  The presence of inventory in a state is sufficient to create nexus for sales tax, corporate tax, and personal income tax purposes, regardless of whether the seller has any other presence within the state where the inventory is stored.

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Non UK domiciliaries are only subject to UK Inheritance Tax (IHT) on their UK assets. Foreign assets are treated as excluded property, which are outside the scope of UK IHT while they are neither domiciled nor deemed domiciled in the UK (broadly once they have been resident in the UK for more than 15 out of the previous 20 tax years, under the proposed new rules).

It has been common practice for non UK domiciliaries to acquire UK residential property via a non UK company of which they are the ultimate beneficial owners. In doing so the owner was viewed as holding a foreign asset (the shares), which represented excluded property. Furthermore, the shares may have been settled on to a trust prior to the settlor becoming deemed domiciled in the UK and thereby preserving excluded property status for the future.

Read more: IHT exposure: Non UK domiciliaries and UK residential property