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(D) A person that, notwithstanding the persons form of organization, bears the same relationshipto the taxpayer as a person describedin this paragraph."Related entity" means:(A) A stockholder who is an individual, or amember of the stockholder s family as defined insection 318 of the Internal Revenue Code, if thestockholder and the members of the stockholder'sfamily own, directly, indirectly, beneficially orconstructively, in the aggregate, at least 50 percentof the value of the taxpayer's outstanding stock;(B) A stockholder, partnership, limited liabilitycompany, estate, trust or corporation, if thestockholder and the stockholder's partnerships,limited liability companies, estates, trusts or corporationsown, directly, indirectly, beneficiallyor constructively, in the aggregate, at least 50percent of the value of the taxpayer's outstandingstock; or(C) A corporation, or a party related to thecorporation in a manner that would requirean attribution of stock from the corporationto the party or from the party to the corporationunder the attribution rules of the InternalRevenue Code if the taxpayer owns, directly,indirectly, beneficially or constructively, at least50 percent of the value of the corporation'soutstanding stock. The attribution rules of thecode shall apply for purposes of determiningwhether the ownership requirements of thisdefinition have been met. 27Table 2. Related Corporations (Payees) Targeted by Expense Addback ProvisionsAlabamaCode Sec. 1563(controlledgroup)Statutory definition of related corporation50% ormoreshareholder50% ormorecorporationOtherIncludes (but not limited to) corporationsincluded in taxpayer’s federalconsolidated tax returnCommoncontrolthresholdArkansas Related parties under Code Sec. 267 > 50%Connecticut X X X 50%Georgia X X X 50%IllinoisExcluded from taxpayer’s unitarygroup because (1) foreign corporationwith 80% of activity outsideU.S., or (2) required to use specializedapportionment formula80%> 50%ApplicablestatuteAla. AdminCode r. 810-3-35-.02Ark. Code Ann.§ 26-51-423Conn. Gen.Stat.§§ 12-218cand dGa. Code Ann.§ 48-7-28.335 Ill. Comp.Stat. §§ 5/203and 5/150140
Code Sec. 1563(controlledgroup)Statutory definition of related corporation50% ormoreshareholder50% ormorecorporationIndiana X XOtherMember of federal affiliated group,except foreign corporations includibleand 50% ownership requirementCommoncontrolthresholdKentucky X X 50%Maryland X X X 50%Massachusetts X X X 50%Michigan“related to the taxpayer by ownershipor control”Mississippi X X X 50%New Jersey X X X 50%New YorkNorth Carolina X X“controlling interest” defined as30% or more ownershipIncludes 80% or more owned corporationsOregon X X X 50%Rhode Island X X X 50%Tennessee “more than 50% ownership interest” > 50%Virginia X X X 50%West Virginia X X X 50%Wisconsin X Related parties under Code Sec. 267 > 50%Dist. ofColumbia50%30%50%X X X 50%ApplicablestatuteInd. Code§ 6-3-2-20Ky. Rev. Stat.Ann. § 141.205Md. Code. Ann.,Tax-Gen. § 10-306.1Mass. Gen.Laws ch. 63,§ 31IMich. Comp.Laws § 206.623Miss. Code Ann.§ 27-7-17N.J. Stat. Ann.§ 54:10A-4.4N.Y. Tax Law§ 208.9N.C. Gen. Stat.§ 105-130.7AOr. Rev. Stat.§ 314.296R.I. Gen. Laws§ 44-11-11Tenn. Code Ann.§ 67-4-2004Va. Code Ann.§ 58.1-302W. Va. Code§ 11-24-3aWis. Stat.§ 71.22D.C. Code§ 47-1803.03Source: CCH IntelliConnect, Multistate Quick Answer Charts, Related Party Expense Addback Requirements; and J. Healy and M.Schadewald, 2013 Multistate Corporate Tax Guide (Chicago: CCH, a Wolters Kluwer business, 2012), at 3217–51.Therefore, for purposes of the state addback provisions,a foreign corporation generally qualifies as arelated member if it either owns 50 percent or moreof the stock of a domestic corporation, or it is 50percent or more owned by a domestic corporation.Note that a foreign corporation that owns 50 percentof a domestic joint venture meets this requirement.Not all states employ the conventional approach todefining a related member. For example, New Yorkdefines a related member by reference to a "controllinginterest," which means a 30-percent or moreownership interest. 28 Arkansas defines a relatedmember by reference to Code Sec. 267 . 29 Wisconsinalso defines a related member by reference to Code41
Page 1 and 2: GLOBAL TAX WEEKLYa closer lookISSUE
Page 3 and 4: GLOBAL TAX WEEKLYa closer lookISSUE
Page 5 and 6: FEATURED ARTICLESISSUE 30 | JUNE 6,
Page 7 and 8: taxation treaties concluded by Swit
Page 13 and 14: UK, its offshore dependencies, and
Page 15 and 16: financing and all forms of financia
Page 17 and 18: Th e Government pointed out in part
Page 19 and 20: Talks are now underway. The TIEA wi
Page 21 and 22: through which they can clamber in o
Page 23 and 24: fi nally, and most egregiously, the
Page 25 and 26: office space, or own tangible asset
Page 27 and 28: extended for 2 years in December 20
Page 29 and 30: Financial transactions ( e.g. inter
Page 31 and 32: OECD Section E - Redraft On Safe Ha
Page 33 and 34: suggests that the following items m
Page 37 and 38: State Interest And IntangibleExpens
Page 39: States generally define "intangible
Page 43 and 44: ConnecticutGeorgiaIllinoisIndianaRe
Page 45 and 46: Rhode IslandTennesseeVirginiaWest V
Page 47 and 48: Table 4. Comprehensive Income Tax T
Page 49 and 50: include federal interest income, st
Page 51 and 52: Recurring IssuesRestructuring of th
Page 53 and 54: M&A. Nick has extensive experience
Page 55 and 56: and consumers." As Germany and Chin
Page 57 and 58: on many levels. The panel found tha
Page 59 and 60: equirements placed on the states, i
Page 61 and 62: NEWS ROUND-UP: COUNTRY FOCUS - ITAL
Page 63 and 64: NEWS ROUND-UP: REAL ESTATE AND PROP
Page 65 and 66: ates - such that, in 2014, the 4 pe
Page 67 and 68: NEWS ROUND-UP: FTTISSUE 30 | JUNE 6
Page 69 and 70: NEWS ROUND-UP: ENVIRONMENTAL TAXESI
Page 71 and 72: Finally, the Federal Council veheme
Page 73 and 74: Singapore Plugs Benefits For SMEsOf
Page 75 and 76: TAX TREATY ROUND-UPISSUE 30 | JUNE
Page 77 and 78: CONFERENCE CALENDARISSUE 30 | JUNE
Page 79 and 80: Key speakers: John Capasso (Alvarez
Page 81 and 82: Key speakers: TBA6/27/2013 - 6/27/2
Page 83 and 84: 6/14/2013 - 6/14/2013http://www.con
Page 85 and 86: THE CYPRUS BAIL-OUT ANDFOREIGN CLIE
Page 87 and 88: Chair: Jonathan Levy (Partner, Reyn
Page 89 and 90: IN THE COURTSISSUE 30 | JUNE 6, 201
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on including the profit from the do
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deduct VAT as a result of incomplet
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where the taxpayer had somehow offs
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een paid in the destination State.
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that Spain has gone its own way fir
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