Upcoming National Meeting

2023 Sales Tax Conference & Audit Session

This three day in-person conference will feature presentations on the most recent transactional tax developments, initiatives and case law topics. The conference is targeted to sales and use tax professionals at all levels of experience. Includes breakouts that are specific in-depth discussions for maximum coverage of timely sales and use tax issues and transactional tax audit sessions

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Newsletters & Media

Cost Conscious

ISSUE 23-02; January 27, 2023

COST Member Legislative and Policy Priorities – As state legislative sessions kick into high gear, we would like to better understand the 2023 state tax policy priorities of COST members. Which of the following state tax issues are most important to your company? [Multiple responses permitted]

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Bloomberg TAX

Eaton Corp., IRS Propose $9.2 Million Asset-Shifting Ruling

January 27, 2023

The IRS and power management company Eaton Corp. have proposed a US Tax Court decision that would adjust the company's tax bill by $9.2 million.

Trump Drops Deutsche Bank Subpoena Fight With New GOP-Led House

January 27, 2023

Former President Donald Trump has ended his long-running legal fight with two congressional committees over access to his financial records now that Republicans have a House majority.

Chicago Mayor Touts Credit Market ‘Validation’ Ahead of Election

January 27, 2023

Chicago Mayor Lori Lightfoot is highlighting her administration’s record of credit rating upgrades, higher pension contributions and other financial strides made over the last four years as she seeks a second term next month. Lightfoot touted her budget efforts in a speech on Friday and said that looking forward, her administration is working to advance plans for Chicago’s first casino, revenue from which will go toward the city’s fire and police pension.

For Digital Nomads, West Virginia Is Heaven and New York Is Hell

January 27, 2023

The week in state tax news: States that fail to adjust their tax codes to embrace remote work do it at their own peril, according to a new index ranking states from best to worst on that front. Meanwhile, more governors rolled out their tax proposals for the year ahead, a New Jersey corporate tax deal looks imminent, taxation of digital advertising and streaming dominated court action, and Washington Supreme Court justices took a close look at the state's new capital gains tax.

Lula, Governors Discuss Fixes for Abrupt Drop in Tax Revenue (1)

January 27, 2023

Brazil’s President Luiz Inacio Lula da Silva and governors are discussing a solution for an abrupt decline in state governments’ revenue, following a series of tax breaks spearheaded by the previous administration to ease inflation pressures. 

IRS PLR: Corporate Group Split Will Qualify for No Gain or Loss Recognition; Related Rulings (IRC §368)

January 27, 2023

The IRS issued 21 rulings on the business split of a worldwide group where a controlled entity will contribute cash and issue debt securities to the domestic parent (“Distributing”), which will pay obligations, repurchase Controlled shares, distribute to Distributing shareholders, and enter into a debt-for-debt exchange with a bank. (1, 16, 20, 21) The contribution and distribution are an I.R.C. §368(a)(1)(D) reorganization with Distributing and Controlled parties thereto, not adversely affected by the share repurchases (treated as made from all public shareholders) or by Distributing’s post-split retention of any remainder shares (until distributing them); and (2, 3, 6, 7, 8, 9, 10, 11) no gain or loss recognition for either party or for Distributing shareholders — except Distributing regarding deductions or income attributable to debt redeemable at a premium or discount and interest expense accrued in a debt exchange — and with Distributing debt payment not precluding qualification as payment to a creditor, domestic “Sub1” being the creditor. (4, 5, 12, 14) Assets’ basis/aggregate basis for recipients will be unchanged from, and their holding period will include, that of the previous owner or of exchanged Distributing stock held as a capital asset. (13) Exchanged shares not directly identifiable due to differences in purchase dates or prices may be designated as appropriate. (15) Earnings and profits will be allocable between Distributing and Controlled. (17) Payments between Distributing and Controlled (or affiliates) regarding obligations arisen pre-distribution and becoming fixed and ascertainable afterwards will be treated as occurring immediately before. (18) Cash received in lieu of a fractional Distributing share will be treated as the latter and disposed for cash. (19) Controlled will not be a Distributing successor for purposes of the five-year rule on reconsolidation under §1504(a)(3). [PLR 2023004005]

Mexico’s AMLO Pledges Pemex Financing that Sparks Bond Rally (2)

January 27, 2023

Mexico is developing a plan to help Petroleos Mexicanos pay off some of its $105 billion in debt through measures such as tax reduction or a transfer to the government, sparking a rise in the oil company’s bonds.

IRS PLR: Corporate Reorganization Transaction Rulings Issued (§368)

January 27, 2023

Distributing and Controlled will each be a "party to a reorganization" within the meaning of I.R.C. §368(b), the IRS ruled, finding that neither party will recognize gain or loss on the contribution or distribution. Controlled’s holding period in each asset received in the Contribution will include the period during which Distributing held the asset. Sub 3 will not recognize gain or loss (and no amount will be includible in income) upon the receipt of Controlled stock in the Distribution. The aggregate basis of the Distributing stock and Controlled stock in the hands of Sub 3 immediately after the Distribution will be the same as that of Sub 3 immediately before the Distribution, allocated between the stock of Distributing and controlled in proportion to the fair market value of each in accordance with Treas. Reg. §1.358-2(a) and (b). Earnings and profits, if any, will be allocated between Distributing, Controlled, and Distributing. [PLR 202304007]

IRS PLR: Reorganization Prior Ruling Not Affected by Additional Facts; Receiver of Stock Will Account for Basis Increase in Recognizing Gain (IRC §1503)

January 27, 2023

In a supplemental ruling addressing an international group’s reorganization, the IRS said no foreign use is considered to occur with respect to a certain country’s dual consolidated loss solely as a result of an item of deduction or loss attributable to the “timing difference liabilities” (Treas. Reg. §1.1503(d)-3(c)(7)) referred to in the prior ruling (PLR 202110015), despite changes to three transactional steps (e.g., their dates of occurrence), including a distribution from domestic Parent’s indirectly owned foreign subsidiary (“Entity 2”) to its owner (“Entity 1,” wholly owned by Parent). For each share of Entity 2 stock transferred in the distribution, the IRS ruled, Entity 1 will take into account the appropriate portion of the §961(a) basis increase with respect to the share in determining adjusted basis under §961(b)(1) and recognize resultant gain under §961(b)(2). [PLR 202304008]

Rare Breed Ordered to Stop Selling Triggers Deemed Machineguns

January 27, 2023

A pair of companies have been temporarily ordered to stop selling machinegun conversion devices, after a federal court in New York said there was probable cause to believe the defendants conspired to circumvent firearms regulations.

Featured Resources

COST - Council on State Taxation

Amicus Briefs

COST - Council on State Taxation

COST Studies, Articles & Reports

2023 State and Local Amnesty Programs

Tracker of most state and local tax amnesty programs enacted and conducted in 2023.

COST - Council on State Taxation

COST Comments & Testimony

Tesimony In Support of H.B. 1045 – Throwback Repeal

COST supports Arkansas H.B. 1045 that would repeal the throwback rule in Arkansas.