Bloomberg Tax Daily Tax Report: State

Deemed repatriation of income is one of the many changes that are part of the recent federal tax reform. In this article, Michael A. Jacobs, Sebastian C. Watt, and Jonathan E. Maddison of Reed Smith LLP discuss the potential state tax costs and benefits of deemed repatriation.
Those of us working in the trenches of state tax often lament state tax issues being viewed as an afterthought. However, in the wake of the Tax Cut and Jobs Act (‘‘TCJA’’), state tax issues should no longer play second fiddle. Why? Because after the changes made by the TCJA go into effect, state taxes will represent a greater proportion of the tax cost of most U.S. businesses than ever before. As a result, treating state tax as an afterthought could have a disproportionate impact on a business’ effective tax rate.