Morgan Stanley, GE Seek Tax Waiver on Offshore Loans

Bloomberg:  Morgan Stanley, GE Want Tax Waiver on Loans From Offshore Units, by Ryan J. Donmoyer:

Morgan Stanley, United Technologies Corp. and General Electric Co. are promoting a plan to Congress that would waive U.S. tax penalties on businesses that borrow from their offshore units, according to congressional aides and lobbyists. The proposal would allow foreign subsidiaries to lend cash to their parent companies for up to two years without triggering a tax that would otherwise be due. It builds on a notice issued by the Treasury Department in October that was intended to help companies overcome the difficulty they have had issuing commercial paper since the onset of the financial crisis.

The proposal is being pushed by industrial and financial companies as an alternative to a broader, permanent tax break sought by drug and computer companies including Microsoft Corp., Oracle Corp., and Eli Lilly & Co. to bring home an estimated $655 billion earned offshore that has never been taxed by the U.S. ...

A revival of the 2004 tax break, sponsored in the Senate by Nevada Republican John Ensign and California Democrat Barbara Boxer, was rejected last year by the Senate Finance Committee. It also has little support in the House, according to Washington Representative Jim McDermott, a senior Democrat on the tax- writing House Ways and Means Committee. That plan would revive an expired 2004 benefit that allowed companies to repatriate money at a 5.25 percent tax rate instead of the 35 percent that would otherwise be owed.