News
Multnomah County Reviewing Two Tuition-Free Preschool Measures for November Ballot – Both Seek to Tax High-Earners
Multnomah County has two tuition-free preschool measures that may go to the ballot this November. The first campaign, Universal Preschool Now, has received enough signatures to be considered by the Multnomah County Board of Commissioners. This campaign has been developed by an independent task-force group. The other campaign, Preschool For All, is developed by a…
Seattle’s City Council Passes ‘JumpStart Seattle’ Payroll Tax on Big Businesses – Mayor Returns Bill Unsigned with New Proposals
Seattle’s City Council recently passed a 20-year tiered payroll tax on businesses with payrolls greater than $7 million. Mayor Jenny Durkan returned the bill to the City Council on July 17, 2020 unsigned, understanding it will become law. The city estimates that about 800 corporations will be subject to the tax, and it expects to…
Oregon Legislature Makes Changes to Corporate Activity Tax (CAT); Second Payment Deadline on July 31, 2020 Remains for Taxpayers
The Oregon Corporate Activity Tax (CAT) is imposed on taxpayers that have commercial activity of more than $1 million. Although many Oregon taxpayers have asked for significant changes to the CAT due to the economic downturn from COVID-19, the legislature only made changes that affect a small subset of taxpayers. The new legislation is beneficial to…
UPDATE: Portland Metro Council Votes to Refer Payroll Tax to November Ballot
On July 16, 2020, the Portland Metro Council unanimously voted to send a $7 billion transportation plan to the November ballot. This tax will impose a payroll tax on employers for individuals who perform services in the Metro Area. The rate will not exceed 0.75% of wages paid by the employer, and employers with 25 or…
The State of Wayfair in 2020: State and Local Income Tax Implications Two Years After the Wayfair Decision
In 2018, the U.S. Supreme Court overturned the long-standing physical presence standard for sales-and-use tax nexus in South Dakota v. Wayfair (“Wayfair”). Since then, nearly all states that impose sales and use tax have adopted economic nexus standards. Several states have started extending the economic nexus standard beyond sales tax regimes, adopting economic nexus provisions…
The Future of International Taxation: BEPS 2.0, DSTs, or What?
Even as regulatory guidance is still being issued by the U.S. Treasury, nearly 2-1/2 years after the enactment of sweeping changes to the international taxation of U.S.-based multinational enterprises (MNEs), the Organization for Economic Co-operation and Development (OECD) has been spearheading proposed changes to global taxation known as “BEPS 2.0” which would cause another seismic…
KBF’s Portland Office Adds Jake Hoesly to its CTS Practice and Rob Buchan to its Accounting, Audit, and Advisory Practice
Please join us in welcoming Jake Hoesly to KBF. Jake is joining our Portland Office, where he will be focused on further growing and developing our Corporate Tax Services practice. Jake has an extensive background in public accounting with both public and privately held companies across a variety of industries, including SaaS, media…
Determining the Accounting for Loans Under the Payroll Protection Program
The question has arisen regarding how to account for loans received by companies under the Payroll Protection Program (“PPP”) of the CARES Act as there are no accounting standards specific to government assistance received in this form. In the absence of standards specific to a transaction, Accounting Standards Codification (“ASC”) 105-10-05 directs a company to…
Additional Payroll Taxes Looming for Portland Metro Area Businesses
The Metro Council has recently outlined its plan to raise the necessary funds for the $7 billion “Get Moving 2020” transportation initiative that will be voted on this November. An overwhelming majority of council members support an increase in payroll taxes on employers in the metro area. Although the plan is not final, it is…
Treasury Provides Welcome Grace Period and Transition Relief from Repeal of the “338 Approach” to Recognition of Built-in Gains (but the clock is ticking)
On January 14, 2020, the IRS and Treasury provided partial relief from their earlier announcement of the repeal of a highly favorable method of increasing the Section 382 limitation on the use of net operating losses and other tax attributes of a target by an acquiring company. Those rules have been a staple of the…
Treasury Releases Final Section 385 Regulations without Substantive Changes to the 2016 Proposed Regulations.
Internal Revenue Code (IRC) Section (§) 385(a) provides that the Secretary of the Treasury is authorized to prescribe regulations as may be necessary or appropriate to determine whether an interest in a corporation is to be treated as stock or indebtedness (or as in-part stock and in-part indebtedness). Prior to the issuance of Treasury guidance,…
Companies Continue to Evaluate APB 23 Benefits After Tax Reform; Impact of COVID-19 Related Repatriations on the Indefinite Reinvestment Assertion
The general comprehensive rule for providing deferred taxes on book-tax basis differences under ASC 740-10 requires companies to record a deferred tax liability (DTL) for any GAAP outside basis in their foreign subsidiaries in excess of their tax basis. ASC 740-30-25-3 provides a rebuttable presumption that all offshore earnings contributing to the basis difference will…