Multinational Tax Loophole Closed?! Walt Disney v. Tax Appeals Tribunal скачать в хорошем качестве

Multinational Tax Loophole Closed?! Walt Disney v. Tax Appeals Tribunal

In this video, we discuss the case of Walt Disney Co. & Consol. Subsidiaries v Tax Appeals Trib. of the State of New York, which addresses whether New York’s royalty tax system is discriminatory or violates the dormant commerce clause. A must watch for all tax professionals, entrepreneurs, business-persons, financial officers, tax planning professionals, state legislators, tax students, law students, municipal attorneys, and all who are interested in real civil cases. Case Name: Walt Disney Co. & Consol. Subsidiaries v Tax Appeals Trib. of the State of New York Citation: 2024 NY Slip Op 02127 (https://law.justia.com/cases/new-york...) Publication Date: 04/23/24 Oral Argument:    • No. 34 Matter of Walt Disney v Tax Appeals...   Issue: Whether New York’s royalty tax system is discriminatory or violates the dormant commerce clause? Key Parts of the Decision: Overall Issue: “Appellants challenge the Tribunal's denial of the deduction as being contrary to the clear language of the statute and as violating the Commerce Clause's prohibition on discrimination against foreign commerce.” Overall Holding: “Because the Appellate Division correctly interpreted the statutes as permitting a tax deduction only where a related subsidiary was subject to the add back requirement, and because any burden on interstate or foreign commerce created by this tax scheme was incidental and did not violate the dormant Commerce Clause, we affirm.” “Contrary to appellants' contentions, the Tribunal properly interpreted the statute. This Court's "cardinal function in interpreting any statute should be to attempt to effectuate the intent of the Legislature, and where the statutory language is clear and unambiguous, the court should construe it so as to give effect to the plain meaning of the words used" (Matter of 1605 Book Ctr. v Tax Appeals Trib. of State of N.Y., 83 NY2d 240, 244 [1994], quoting Doctors Council v New York City Employees' Retirement Sys., 71 NY2d 669, 674-675 [1988]). The plain meaning of the statutory language is clear: "[A] taxpayer shall be allowed to deduct royalty payments directly or indirectly received from a related member during the taxable year to the extent included in the taxpayer's federal taxable income unless such royalty payments would not be required to be added back under subparagraph two of this paragraph or other similar provision in this chapter" (former Tax Law § 208 [9] [o] [3] [emphasis added]). By its plain terms, the statute allows parent taxpayers to deduct royalty income only if that money had already been included on a New York tax return through an add back to the subsidiary's income.” “Although the statute provides that a deduction will not be granted if one of the statutory exceptions to the add back requirement applies, it goes on to state that the deduction will not be permitted if an add back is not required under a "similar provision" in the chapter. Given that the operative language applies only to "corporations subject to tax under this article," i.e., corporations subject to tax in New York, the deduction was clearly only available to corporations receiving royalties from related entities who were subject to the add back, not those that would be subject to the addback if they were they subject to New York taxes, as appellants suggest.” “Appellants' proposed interpretation of the law would not accomplish this goal, and in fact would result in the opposite outcome. Corporate families with subsidiaries out of state would be permitted to take a tax deduction without first paying a New York tax on the royalty money. By simply domiciling their subsidiaries outside New York, corporate groups would be able to perpetuate the very same tax loophole the challenged legislation seeks to avoid. Although counsel for Disney suggests that the legislature actually intended this incongruous result, neither appellant points to any authority supporting this interpretation. As both the plain language and the explicit legislative purpose behind the statute support the Tribunal's interpretation, we see no reason to disturb that determination.” #nycourtofappeals #lawtalk #attorney #lawyer #tax #taxlaw #businesslaw