Part I: The Johnson Amendment’s History and Controversy The “Johnson Amendment” is the nickname for a provision in the U.S. Tax Code that places limitations on the activities of organizations seeking tax exemption. 26 U.S.C. § 501(a) provides that some organizations shall be exempt from taxation.1 Section 501(c)(3) provides the general requirements that, to be…
Tag: Tax
A Quick Look at Michigan’s Corporate Income Tax
In May of 2011, Michigan Governor Rick Snyder signed into law a bill that made numerous adjustments to Michigan’s tax laws. These changes included replacing the Michigan Business Tax with a corporate income tax. The Michigan corporate income tax consists of a flat tax at a rate of 6%.1 At the time he signed this…
Revising Silicon Valley’s Tasty Tax Exemptions?
Competition amongst the high-tech players in Silicon Valley for top engineering talent has been fierce for some time. In addition to six-figure salaries and generous stock options, companies have gone to extraordinary lengths in developing perk programs to recruit and retain employees.1 In an environment filled with helicopter rides, arcades, and concierge services, it might…
The Modern Merger
The business world welcomed news of Pfizer’s plans to acquire Allergen in a $160 billion deal.1. The merger not only represents the biggest pharmaceutical merger of all time, but is also viewed as an indication that the business world is back on its feet as deal activity is surpassing all pre-recession metrics.2. While many positives…
SENATE COMMITTEE SCRUTINIZES TAX EXEMPTIONS FOR PRIVATE MUSEUMS
The Senate Finance Committee has recently set its sights upon nearly a dozen private museums opened and operated by individual collectors located all over the United States. The committee has begun scrutinizing and putting to question whether the tax-exempt status the museums enjoy “provides sufficient public benefit to justify what amounts to a government subsidy.”1…
Domestic and International Tax Proposals to Address Tax Aversions of Multinational Companies
Many U.S.–based multinational corporations are holding profits abroad for tax avoidance purposes. A recent study found that 57 of Fortune 500 companies would have paid $184.4 billion in U.S. taxes collectively if their profits were not filed offshore.1 For example, Apple has booked $181.1 billion offshore and would have owed $59.2 billion if they were…
Consumers are NOT “Amused” by Chicago’s New 9% Streaming Tax
Residents of Chicago may be familiar with the city’s “Amusement Tax,” which levies a 9% tax on admission fees or other charges for the “privilege to enter, to witness, to view or to participate in an amusement.”1 An amusement is broadly defined as including “any exhibition, performance, presentation or show for entertainment purposes,” or “any…
Proposal for a Flat Tax Rate Falls Flat
Anyone currently following the Republican primaries may not have noticed Rand Paul’s plan to abolish the tax code as we know it among the many controversial proposals. Paul is calling for the entire IRS tax code (comprising more than 70,000 pages) to be repealed and replaced with a 14.5% flat tax on individuals and businesses.1…
Lions, and Tigers, and Tax Inversions! Oh, My!
This blog will address some potential legal challenges to the recent flux of corporate tax inversions. At first one might think that because a tax inversion may require you to pay your capital gains on a stock, and if you sold the stock you would have to pay your capital gains anyways, that this aspect…
National Attempts to Impose Sales Taxes on Online Retailers
Currently, there is no federal scheme in place that allows states to enforce their sales tax for online purchases. Because of this, many argue that there is a large competitive advantage for online retailers who are not required to pay these state sales taxes over their storefront counterparts.1 In an attempt to harmonize existing…