Corporate tax fairness defeated in legislature | Arkansas Blog

Friday, March 11, 2011

Corporate tax fairness defeated in legislature

Posted By on Fri, Mar 11, 2011 at 6:36 AM

Rep. Jim Nickels failed, as expected, yesterday with his bill to require combined corporate tax filling by multistate corporations. The use of subsidiary reporting allows accounting tricks that reduce and even eliminate tax liability in Arkansas.

Nickels told the panel his bill would allow small businesses to be treated the same as multi-state corporations.
“It would allow Sherwood Tire to be treated the same as Sam’s and Wal-Mart tire departments,” he said.

Richard Pomp, a University of Connecticut School of Law professor, testified that the bill would levelize the corporate taxation field that currently, under a court order, gives multi-state corporations the right to choose combined reporting in Arkansas.

“You have the worst of all worlds, where multi-state corporations can elect to chose what’s to their advantage,” Pomp said. “I love being in any state where the corporate tax rate is essentially elective.”

Pomp said corporations like Wal-Mart, the nation’s largest retailer, may set up a Delaware subsidiary that owns store buildings. Each corporate store pays rent to the subsidiary, which then provides a tax deduction to the main company, he said.

“You’re picking up all the pieces from Humpty Dumpty and putting him back together again,” he said.

Pomp estimated Arkansas would gain from $38 million to $95 million annually from combined reporting.

“You don’t have to use that money for spending,” he said. “You could use it to reduce the corporate tax rate.”

Tags: , ,

From the ArkTimes store

Favorite

Comments (5)

Showing 1-5 of 5

Add a comment

 
Subscribe to this thread:
Showing 1-5 of 5

Add a comment

More by Max Brantley

Readers also liked…

  • IHOP coming down, but .....

    I always scan the Little Rock City Board for items of interest this week and this one caught my eye: A zoning measure required by a proposal to tear down the IHOP at Markham and University.
    • Apr 30, 2016
  • Free Zinn book for Arkansas teachers

    Arkansas teachers! Get your free Howard Zinn book here! Whether Kim Hendren likes it or not.
    • Mar 3, 2017
  • John Goodson and others add lawyers for hearing on forum shopping

    Lawyers facing federal court sanctions for forum shopping a class action insurance case have brought in new legal guns from out of state to fight potential sanctions.
    • May 26, 2016

Most Shared

  • Industrial hemp pilot program coming soon to Arkansas

    One of the booths at this week's Ark-La-Tex Medical Cannabis Expo was hosted by the Arkansas Hemp Association, a trade group founded to promote and expand non-intoxicating industrial hemp as an agricultural crop in the state. AHA Vice President Jeremy Fisher said the first licenses to grow experimental plots of hemp in the state should be issued by the Arkansas State Plant Board next spring.

Most Viewed

Most Recent Comments

Blogroll

 

© 2017 Arkansas Times | 201 East Markham, Suite 200, Little Rock, AR 72201
Powered by Foundation