Overview of Presidential Candidate Tax Plans

As the date of the 2016 Presidential election gets closer, much attention will be given to the two main candidates' federal tax plans.   In addition to such major issues as international and domestic policy, the effect of the candidates' tax plans on the economic growth of the U.S. will be a key decision point for many voters.  

At this time, many of the discussions regarding proposed tax policy involve theoretical arguments in lieu of actual detailed provisions.  However, based on the information currently available, some of the key provisions that are proposed under the tax plans for each candidate are listed in the subsequent discussion.

Estate & Gift Tax

Estate Tax Portability Election Available For Surviving Spouses

The estate tax concept known as "portability" was first introduced for married persons dying on or after January 1, 2011.  Portability was originally scheduled to expire on December 31, 2012, but was made a permanent feature of the estate tax as part of "The American Taxpayer Relief Act of 2012".

Portability allows the executor of an estate to elect to transfer any unused estate tax exemption to a surviving spouse.  The unused exemption received by the surviving spouse is referred to as the "Deceased Spousal Unused Exclusion" (DSUE) amount.  Once the election is made by the executor, a surviving spouse can use the DSUE amount received against any future taxable gifts or transfers at death.  An example of the utilization of the DSUE is:

Proposed Treasury Regulations Curtail Estate and Gift Tax 

Previously sent as an important alert in August.
August 2, the Treasury Department issued proposed regulations under Internal Revenue Code  Section 2704. The regulations are designed to eliminate the use of certain valuation discounts for controlled entities for estate, gift, and generation-skipping transfer taxes.

State and Local Tax
Texas Severance Tax Incentives

With oil and gas prices at all-time lows, E&P companies should make sure they are taking advantage of all available credits and incentives available to them.  Two of the most beneficial severance tax credits available are the credit for qualifying low-producing oil leases and the credit for qualifying low-producing gas wells.

Louisiana Legislative Update (Part 2)

In our June WP Newsletter, we covered a broad range of tax provisions passed by the Louisiana legislature in March, 2016.  This follow up article addresses other Louisiana legislative changes that are effective in 2016 or later tax years.
Single-Sales Factor Apportionment Formula, Market-Based Sourcing Adopted
  Legislation was passed that adopts (1) a single-sales factor apportionment formula for most taxpayers, (2) a double-weighted sales factor apportionment formula for oil and gas companies, and (3) market-based sourcing for sales (other than sales of tangible personal property) and sales of services. These changes apply to all taxable periods beginning on and after January 1, 2016.

International Tax
Tax Implications of Hiring International Employees

Due to business or operational requirements, domestic companies often hire foreign employees to work in their United States operations.   In addition to various social, legal, and human resource concerns, a U.S. employer must also address the tax implications of hiring non-U.S. citizens.  The following discussion is an overview of the impact of income and social taxes on the employer and the foreign employee.