3 Takeaways from Biz Comments on NY Draft Corp. Tax Regs
Limitations on favorable tax treatment for manufacturers and net operating loss deductions emerged as top concerns about New York's final set of draft regulations on its 2015 corporate tax overhaul laws, while few objections were raised against narrowing P.L. 86-272 protections.
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Yet, despite the initial pushback that practitioners expressed on the regulations, no official comments were submitted on those portions of the rules. The New York State Bar Association's report from December, however, said that a "substantial majority" of its executive committee found that parts of the regulations on P.L. 86-272 "are not easily reconciled with established rules of statutory interpretation" and that the rules would erode most of the law's protections.
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The primary author of the bar association report, Irwin Slomka of Blank Rome LLP, declined to discuss the report but said that litigation will likely ensue if New York forges ahead with adopting the new P.L. 86-272 stance. He noted that California, the only state thus far that has adopted the MTC's new guidance, is already facing a legal battle over it.
"Despite the paucity of comments so far, it is quite controversial and will almost certainly be challenged if the released draft actually becomes New York state policy," Slomka said.
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"3 Takeaways from Biz Comments on NY Draft Corp. Tax Regs," by Paul Williams was published in Law360 Tax Authority on July 21, 2023.