July 4, 2021
U.S. Tax This Week for July 2
Ernst & Young's U.S. Tax This Week newsletter for the week ending July 2 is now available. Prepared by Ernst & Young's National Tax Department in Washington, D.C., this weekly update summarizes important news, cases, and other developments in U.S. taxation.
Top of the Week
IRS expands safe harbor period for renewable energy projects In Notice 2021-41, the IRS expands the period that qualifies for the Continuity Safe Harbor for renewable energy projects for which construction began in 2016 through 2020. The Notice responds to the "extraordinary delays" caused by the COVID-19 pandemic. The IRC Section 45 production tax credit (PTC) allows taxpayers to claim a credit for certain renewable electricity produced at a qualified facility. The IRC Section 48 investment tax credit (ITC) allows taxpayers to claim a credit based on certain energy property placed in service during the tax year. The tax credit rate is determined based on when construction begins, provided that the project is continuously constructed. EY Tax Alert 2021-1297 has details.
IRS finalizes regulations on mandatory 60-day postponement of certain tax-related deadlines due to federally declared disaster
The IRS has issued final regulations (TD 9950) addressing the mandatory 60-day extension, under new IRC Section 7508A(d), of certain time-sensitive tax deadlines due to a presidentially declared disaster area, military action, or act of terrorism. The regulations also clarify the definition of a federally declared disaster area under IRC Section 165. The applicability date for the IRC Section 7508A(d) regulations is December 21, 2019; the IRC Section 165 regulations apply as of June 11, 2021. EY Tax Alert 2021-1265 has details.
The new elective state pass-through entity taxes: A survey of the latest developments (July 15)
During this Thought Center Webcast, Ernst & Young professionals will discuss the issues around new elective state pass-through entity taxes.
Tax in the time of COVID-19: Update on legislative, economic, regulatory and IRS developments (July 16)
During this Thought Center Webcast, Ernst & Young professionals will provide updates on: (i) the US economy and tax policy; (ii) breaking developments; and (iii) what’s happening at the IRS.
US corporate income tax compliance: Tax year 2020 filing update and multi-year readiness (July 20)
During this Thought Center Webcast, Ernst & Young professionals will provide insights on preparing for 2020 US federal and state filings and multi-year considerations in this age of “continuous” compliance.
Research credit: recent federal cases highlight an uncertain landscape (July 22)
During this Thought Center Webcast, Ernst & Young professionals will discuss the relevant facts of the cases and the courts’ reasoning on issues ranging from foundational IRC Section 41 qualification tests to procedural matters. The panelists will also address how taxpayers can respond to these decisions when substantiating current, amended, and future Section 41 claims. The webcast panel includes EY’s National Tax Department research credit leaders, as well as a member of our Tax Policy and Controversy practice.
Tax risk and controversy for companies operating in Asia-Pacific (July 26)
During this EY Webcast, Ernst & Young professionals will review key findings of the 2021 EY Tax risk and controversy survey and discuss why companies operating in Asia-Pacific should build their Tax Controversy Department of the Future without delay.
Recent Tax Alerts
— Jun 30: U.S. District Court vacates Department of Labor's high-skilled wage rule (Tax Alert 2021-1282)
— Jul 01: EY publication highlights 2021 Q2 tax policy developments across the Americas (Tax Alert 2021-1295)
— Jun 30: Argentina's automatic extensions of expiring/expired immigration documents to come to an end (Tax Alert 2021-1294)
— Jun 30: Uruguay expands COVID-19 tax relief measures (Tax Alert 2021-1293)
— Jun 30: Trade Watch | Issue 2 2021 (Tax Alert 2021-1291)
— Jun 30: Polish Ministry of Finance publishes decree deferring certain provisions of the new withholding tax reform to 31 December 2021 (Tax Alert 2021-1287)
— Jun 30: OECD publishes international exchange framework and optional module for Model Reporting Rules for sellers in the sharing economy (Tax Alert 2021-1286)
— Jun 30: Vietnam launches COVID-19 Vaccine Passport Pilot Program in July 2021 (Tax Alert 2021-1285)
— Jun 30: USCIS extends flexibility for responding to agency requests (Tax Alert 2021-1284)
— Jun 30: New entry rules for Venezuelan nationals, maritime crew and individuals who recovered from COVID-19 (Tax Alert 2021-1283)
— Jun 30: South Sudan implements an electronic tax system (Tax Alert 2021-1280)
— Jun 30: Danish Supreme Court denies refund of dividend withholding tax to nonresident investment funds (Tax Alert 2021-1279)
— Jun 30: Denmark publishes draft bill relaxing transfer pricing documentation requirements in relation to domestic controlled transactions (Tax Alert 2021-1278)
— Jun 29: Australian Taxation Office issues draft tax ruling expanding scope of royalty withholding tax on software related payments (Tax Alert 2021-1274)
— Jun 25: Brazilian Government proposes changes to corporate income tax system as second phase of comprehensive tax reform (Tax Alert 2021-1270)
— Jun 25: Argentina issues new transfer pricing regulations (Tax Alert 2021-1269)
— Jun 25: Brazilian Congress approves five-percentage-point increase to the social contribution tax for banks, insurance companies and other financial services entities (Tax Alert 2021-1268)
— Jun 25: Venezuelans granted further permission to enter and depart Colombia with expired passports; several administrative deadlines extended (Tax Alert 2021-1264)
— Jun 23: Canada's quarantine and travel restriction updates for CoPR holders provided (Tax Alert 2021-1248)
— Jun 17: New trade agreement between UK and Australia includes multiple immigration provisions (Tax Alert 2021-1213)
— Jun 25: Tanzania’s Parliament passes Finance Bill, 2021 (Tax Alert 2021-1261)
— Jun 28: What to Expect in Washington (June 28) (Tax Alert 2021-1272)
— Jun 28: This Week in Health Policy for June 28 (Tax Alert 2021-1271)
— Jun 30: Vermont legislation lessens impact of regular COVID-19 UI benefits on future employer SUI tax rates (Tax Alert 2021-1290)
— Jun 29: Indiana ends COVID-19 nexus relief provision for teleworkers (Tax Alert 2021-1277)
— Jun 28: Nebraska trial court dismisses COST challenge to Department of Revenue's policy statement on IRC 965 inclusion income (Tax Alert 2021-1275)
— Jun 28: Massachusetts to end COVID-19 income tax relief for teleworkers (Tax Alert 2021-1273)
— Jun 25: Maine legislation extends COVID-19 income tax relief for teleworkers, establishes penalty for failure to provide information returns to the state's tax assessor (Tax Alert 2021-1267)
State and Local Tax Weekly
Highlights of this edition include:
— Massachusetts high court allows corporation to retroactively apportion sales tax based on the location of multistate software use The Massachusetts Supreme Judicial Court (MA SJC) affirmed a decision by the Massachusetts Appellate Tax Board (MA ATB) allowing software vendors to use the state's abatement process to apportion sales tax on software sold to a customer for multistate use despite the vendors not complying with the express terms of a regulation promulgated by the Massachusetts Department of Revenue (MA DOR). Oracle USA, Inc. v. Commissioner of Revenue, No. SJC-13013 (Mass. Sup. Jud. Ct. May 21, 2021).
— Income/Franchise, Sales & Use, Business Incentives, Property Tax, Controversy, Payroll & Employment Tax, Miscellaneous Tax, Unclaimed Property, Value Added Tax, Unclaimed Property
Highlights of this edition include:
- Bipartisan infrastructure deal reached, but road to passage uncertain
- House passes corporate disclosure package requiring CbC tax reporting for multinationals
- Biden Administration’s proposed 15% minimum tax could come with requirement to disclose book-tax differences
Treasury and IRS news
- IRS announces plans to amend BEAT regarding qualified derivative payment reporting
- US taxpayers should consider certain tax provisions with respect to bitcoin following recent legislation in El Salvador
- USTR announces 25% punitive tariffs on six countries in response to DSTs; suspends tariffs for 180 days
- G7 leaders affirm commitment to global tax changes under BEPS 2.0
- G7 Finance Ministers express strong support for global tax changes under BEPS 2.0
- OECD publishes model rules for information exchange for digital platforms
IRS Weekly Wrap-Up
| ||2021-14||26 CFR 601.105: Examination of returns and claims for refund, credit or abatement; determination of correct tax liability. (Also Part I. § 172)|
| ||2021-13||Section 45Q.—Credit for Carbon Oxide Sequestration|
| ||2021-41||Beginning of Construction for Sections 45 and 48; Extension of Continuity Safe Harbor to Address Delays Related to COVID-19 and Clarification of the Continuity Requirement|
| ||2021-42||Treatment of Amounts Paid to Section 170(c) Organizations under Employer Leave based Donation Programs to Aid Victims of the COVID-19 Pandemic|
Because the matters covered herein are complicated, U.S. Tax This Week should not be regarded as offering a complete explanation and should not be used for making decisions. Any decision concerning matters covered herein should be reviewed with a qualified tax advisor.