Japan's Toshiba Studies Acquisition Proposal by Global Fund - U.S. News & World Report

Japan's Toshiba Studies Acquisition Proposal by Global Fund - U.S. News & World Report

Japan's Toshiba Studies Acquisition Proposal by Global Fund - U.S. News & World Report

Posted: 06 Apr 2021 06:36 PM PDT

[unable to retrieve full-text content]Japan's Toshiba Studies Acquisition Proposal by Global Fund  U.S. News & World Report

Changes to 'Business Activity' on the Horizon? - The CPA Journal

Posted: 06 Apr 2021 11:05 AM PDT

Although the Supreme Court's decision in South Dakota v. Wayfair [585 US _ (2018); 138 S. Ct. 2080 (2018)] significantly increased the state and local tax burden of many businesses, a proposal made by the Uniformity Committee of the Multistate Tax Commission (MTC) to define "business activity" for purposes of the protection offered by Public Law (PL) 86-272 will increase that burden even more. As PL 86-272 was adopted in 1959, it could not take into account the development of technology that would make it possible for any business to reach into homes using "online solicitations." Therefore, the MTC determined that it was necessary to address online solicitation as it relates to PL 86-272. Accordingly, this article will concentrate on the proposals related to online solicitation. CPAs need to be aware of these proposed changes and their implications when assessing client nexus and filing issues.

According to the hearing officer at the public hearing for the fourth revision of the Statement of Information containing the proposal, "because Public Law does not define 'business activity,' the statute is subject to different construction or interpretation." Therefore, the MTC has been concentrating on defining "business activity" for purposes of PL 86-272 with respect to online activities. In this context, the proposal includes a clarification of the nature of property protected, a list of protected and unprotected activities, and a definition of de minimis activities. If the MTC adopts this revision, 22 states intend to fully comply with the MTC's rulings, which would adopt this revision immediately.


PL 86-272 (15 USC sections 381–384) was initially adopted by Congress in 1959 to protect interstate commerce from net income tax obligations in the customer's state. The law does not apply to or protect businesses from franchise or gross receipts tax, as these taxes are not based on income. PL 86-272 only applies to the sale of tangible personal property in interstate commerce when the sole business activity in the customer's state is the solicitation of orders for sales of tangible personal property and activities ancillary thereto. The decisions (approval or rejection) of these orders must be made, and orders must be fulfilled, by shipment or delivery from a point outside the state in question. In this context, the sale of tangible personal property does not include the leasing, renting, licensing, or other disposition of tangible personal property.

Regarding solicitation, speech, or conduct that explicitly or implicitly invites an order, as well as activities that neither explicitly nor implicitly invite an order but are entirely ancillary to requests for an order, are included in solicitation. Activities considered to be ancillary are those activities that serve no independent business function apart from their connection to the solicitation of orders. Activities that a seller would engage in apart from soliciting orders, including the promotion of sales, are not protected activities, because promotion explicitly invites an order. In addition, activities that, when taken together, establish only a trivial connection with the taxing state are considered to be de minimis and will not cause a business to lose the protection of PL 86-272. An activity conducted within a taxing state on a regular or systematic basis or pursuant to a company policy, written or unwritten, will not normally be considered de minimis. Indeed, most jurisdictions have published guidance (either via regulations or administrative pronouncements) that provides laundry lists of "protected" and "nonprotected" activities under PL 86-272.

To determine whether a business that sells tangible personal property via the Internet is shielded by PL 86-272 requires the same general analysis as with respect to persons that sell tangible personal property by other means. As a general rule, when a business interacts with a customer via the business's website or app, the business engages in a business activity within the customer's state. Static text and photos on a business's website do not, by themselves, generally constitute a business activity within a state where the business's customers are located.

Proposed Definitions

Pursuant to the MTC proposal, the following online activities are protected activities with respect to PL 86-272:

  • Post-sale assistance provided to customers through posting static FAQ with answers on the business's website.
  • Placement of Internet cookies on a customer's computer or other electronic device to gather information for purposes entirely ancillary to the solicitation of tangible personal property; including no activities other than to remember items places in customer's shopping cart, to store personal information inputted by the customer to avoid re-entry, and to remind customers which products they have considered during previous sessions, where no other cookies are delivered by the business to its customers and the cookies perform no other function.
  • Sale of only tangible personal property on the business's website by enabling customers "to search for items, read product descriptions, select items for purchase, choose among delivery options, and pay for the items." If no unprotected activity is performed, the business is soliciting tangible personal property sales.

The following are examples of unprotected activities set forth in the MTC proposal, in which it is deemed that the online activity does not constitute, and is not entirely ancillary to, the in-state solicitation of orders for sales of tangible personal property:

  • Post-sale assistance provided to customers via either electronic chat or email that is initiated by customers clicking on an icon on the business's website.
  • Solicitation and receipt of online applications for branded credit cards, via the business's website, which generate interest income and fees.
  • Invitation and provision of electronic applications, as well as the option to attach cover letters and resumes to web-site users for non-sales positions.
  • Internet cookies placed onto computers or other electronic devices to gather data that will be utilized "to adjust production schedules and inventory amounts, develop new products, or identify new items to offer for sale."
  • Any post-sale activities, such as remotely fixing or upgrading products "by transmitting code or other electronic instructions" via the Internet.
  • Proposing and selling an extended warranty plan.
  • Contracts with marketplace facilitators, where the facilitator maintains inventory that includes some of the business's products at "fulfillment centers" where customers are located.
  • Contracts with customers to stream videos and music for a charge.

The landmark decision in Wayfair is causing states to carefully evaluate adopting economic factor-based presence nexus provisions.

PL 86-272 also provides specific guidelines for businesses to keep their protection when they use independent contractors. Independent contractors who are not sales representatives do not affect the protection afforded by the law by maintaining the business's products for display and solicitation purposes only. If the independent contractor executes any unprotected activities on behalf of the business, however, the business will not be protected by PL 86-272.

Although the MTC's actions cannot be enforced unless the states adopt these regulations, many states have been moving away from physical presence requirements for nexus. Also, as stated above, there are 22 states that intend to comply with or adopt most of the MTC regulations. Indeed, the landmark decision in Wayfair is causing states to carefully evaluate adopting economic factor-based presence nexus provisions. Although the Wayfair decision does not overrule PL 86-272, it appears that its protections might be limited if the MTC proposals are passed. Therefore, businesses and their tax advisors are highly advised to monitor the developments of the MTC proposal so that they can properly assess nexus and related risk issues in multistate commerce.

Corey Rosenthal, JD, is a principal at CohnReznick LLP, New York, N.Y.
Arvinder Kaur, CPA, is a state and local tax manager at CohnReznick.
Dilnora Isaeva, CPA, is a state and local tax senior associate at CohnReznick.

Most foreclosures would be banned until 2022 under new CFRB proposal - Fox Business

Posted: 06 Apr 2021 02:12 PM PDT

Millions of homeowners who are struggling to make their mortgage payments due to the coronavirus pandemic could get a fresh reprieve under new rules proposed this week by the Consumer Financial Protection Bureau.

The plan would essentially prevent mortgage servicers from starting foreclosure proceedings until after Dec. 31, 2021, the CFPB said in a statement. More than 3 million households are behind on their mortgage payments, and nearly 1.7 million will exit their forbearance period in September.


"Millions of families are at risk of losing their homes to foreclosure in the coming months, even as the country opens back up," CFPB Acting Director Dave Uejio said in a statement.

Bureau officials said the proposal is intended to give borrowers who had delayed or stopped paying their mortgage a chance to resume, or modify, their monthly payments before lenders move to take ownership or sell the home to recover the lost money.

The agency proposed a new rule that would prevent servicers from starting foreclosure proceedings until after Dec. 31. The intent, bureau officials said, is to give borrowers coming off forbearance time to consider their options, such as whether they need a mortgage modification to reduce their monthly payments. The restriction would apply only to mortgages on homes used as primary residences.


"The nation has endured more than a year of a deadly pandemic and a punishing economic crisis," Uejio said. "We must not lose sight of the dangers so many consumers still face."


In February, President Biden directed federal housing regulators to extend mortgage forbearance programs for an additional six months and prolong other foreclosure relief programs.

Mortgage giants Fannie Mae and Freddie Mac also extended their forbearance and foreclosure programs in February. Individuals with federally backed properties can defer their mortgage payments for up to 15 months.

Cuba now open to Cuban American investors, ‘strengthening ties’ - Tampa Bay Times

Posted: 05 Apr 2021 06:00 AM PDT

Cuba's Ministry of Foreign Trade and Foreign Investment is opening the door to Cuban Americans who want to participate in foreign investment projects as the island tries to jump-start its beleaguered economy and encourage Washington to loosen sanctions.

Katia Alonso, the ministry's director of foreign capital investments, told the Miami Herald by email in response to a list of questions that Cuba won't reject potential business bids from Cuban Americans based on the sole fact that they live in the U.S. — something she said the law has never prohibited, though in the past exile entrepreneurs haven't always been welcomed either.

"Cuba is open to foreign capital regardless of its place of origin," Alonso explained, "so if a Cuban American were interested — whether they were born in the U.S. or migrated to that country — in investing on the island, their interest would be evaluated just like any other potential investor from any other place of origin."

The invitation comes as Cuba looks to boost foreign investment by including opportunities for small and medium business investors within the 503 projects now available, adding up to an estimated $12 billion. Most of the open proposals are in the tourism and energy industries, while the others include investment projects in agriculture, commerce, telecommunications, construction, medical tourism and pharmaceutical industries.

Cuba is in the midst of its most severe economic contraction since the collapse of the Soviet Union, with the government reporting an 11 percent contraction last year. Pandemic lockdowns, Trump administration sanctions and Venezuela's worsening crisis shut the island off to traditional lifelines for revenue such as tourism. Cuban officials are hoping the Biden administration will loosen Trump-era restrictions on travel and remittances, though thus far the new administration has signaled that changing Cuba policy is not a priority.

"If the Biden administration is looking for signs of positive movements in Cuba as a rationale for why it should relax some of the restrictions imposed during the Trump era, this gesture by the Cuban government could be seen as a positive step forward," said Richard Feinberg, a University of California professor and former diplomat.

The foreign investment projects are led by existing Cuban businesses, which would create partnerships with potential investors and negotiate the terms of their business proposal. It would then have to be approved by the Cuban government. Alonso said foreign investors can still propose their own private business ideas, and they will be considered as long as they meet the government's requirements under their foreign investment policies. She first suggested Cuban Americans might apply at a press conference in March.

"The participation of Cubans who live abroad in a more active way in the economic development of the country corresponds with a desire to continue strengthening ties between Cubans and their country," she told the Herald.

The foreign investment program does not apply to Cubans living on the island, who are legally barred from establishing medium to large private businesses in the communist country.

This became an issue in one notable case in 2016, when Saul Berenthal, a Cuban American investor wanting to create the first U.S. manufacturing plant on the island since Fidel Castro took power in 1959, saw his plans fall apart after deciding to change his permanent residency to the island, the Herald reported. Berenthal, who was born in Cuba, had proposed a plan to assemble tractors to help small farmers on the island.

Alonso said that for a foreign investor to qualify under Cuba's laws, they must be a "natural or legal person, with residency and capital abroad."

"In that regard, a repatriated Cuban citizen, since they do not meet the requirements established for foreign investment, would need to follow the norms for non-state forms of business in the Cuban economy," she said.


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