Tuesday, April 30, 2019
Darien Shanske (UC-Davis) & David Gamage (Indiana), Why States Can Tax the GILTI, 91 State Tax Notes 967 (Mar. 18, 2019):
A centerpiece of the 2017 federal tax legislation’s reforms to international corporate income tax rules is the new global intangible low-taxed income regime (or GILTI). In a prior essay, we argued that U.S. state governments should conform to GILTI. But might there be constitutional restrictions preventing state governments from doing so? This essay argues that state governments can constitutionally conform to the federal GILTI rules and thereby tax GILTI income as part of the states’ corporate income tax bases.
However, in doing so, we explain that state governments will need to be attentive to background constitutional principles.