State Taxation: Reaching Beyond the Water’s Edge


Council of State Taxation

The Peabody, Memphis, TN
April 21, 2015 (2:15 - 5:15 p.m.)

Joseph X. Donovan was a speaker at the special opening session, "State Taxation: Reaching Beyond the Water’s Edge," at the 2015 Spring Audit Session/Income Tax Conference, sponsored by the Council of State Taxation (COST).

The Organization for Economic Cooperation & Development (OECD) nations and the United States are engaged in an unprecedented Base Erosion and Profit Shifting (BEPS) project to revise the global rules for taxing the income of multinational businesses. The impact on state taxation may be profound. Mr. Donovan reviewed the status of the BEPS project to date and the likely outcomes. He also discussed current and potential future state efforts to tax income outside the "waters-edge," including adjusting related party transactions, taxing foreign dividends, tax haven legislation and worldwide combined reporting. Finally, Mr. Donovan addressed the constitutional limits to the state taxation of international business.