Tax implications of doing business in the U.S.

This program will provide the participant with the U.S. federal and multi-state tax fundamentals and implications of foreign businesses selling services and goods to U.S. customers. The participant will understand what it means to do business in the U.S. for various taxes (income tax, sales tax and other taxes) that will apply to their business and sales activities to U.S. customers.  Additionally, the participants will become familiar with the foreign businesses obligation to collect, remit and pay the taxes applicable to their U.S. business activities.  

• Know and understand the difference between a U.S. and a foreign trust
• Know and understand the U.S. tax treatment of a foreign grantor and non-grantor trust
• Know and understand the reporting requirements of U.S. beneficiaries and gift recipients
• Know and understand the taxation of foreign trust distributions in the hands of a U.S. person
• Know and understand the interaction and tax implications of underlying companies and their tax treatment as controlled foreign corporations or passive foreign investment companies
• Know and understand how to use foreign and U.S. trust structures in tandem to achieve a family’s objectives for its U.S. and foreign beneficiaries
• Know and understand some of the commonly used tax planning mechanisms

Topics of discussion will include:

I.     Common law v Civil law

a.    Difference

II.   Worldwide Taxation v Territorial Taxation

a.    U.S.

b.    Other jurisdictions

III. U.S. tax system

a.    Federal tax system

         i.    Substance over form

         ii.    Worldwide

         iii.    U.S. source income (ECI)

b.    What Does It Mean to “Do Business” in the U.S.

           i.    14th Amendment of the U.S. Constitution (Commerce Clause)

1.    State Taxing Authority

a.    Nexus

          i.    Income tax

1.    PL 86-272 Tangible Personal Property

2.    Services

           ii.    Sales tax

1.    Quill v North Dakota (1992)

2.    Wayfair v South Dakota (2018)

c.    Other state taxes

           i.    Primarily excise

IV. Primary Types of U.S. Federal Taxes

a.    Income

V.   Primary Types of State and Local Taxes

a.    Income

             i.    Imposition

             ii.    Filing obligations

b.    Gross Receipts

            i.    Imposition

            ii.    Filing obligations

c.    Sales & Use

            i.    Imposition

            ii.    Collection, filing and remittance obligations

            iii.    Fiduciary Responsibility

d.    Other excise taxes

             i.    Imposition

             ii.    Collection, filing and remittance obligations

             iii.    Fiduciary Responsibility

e.    Payroll Taxes

              i.    Employer

              ii.    Employee

              iii.    Collection

VI. State Registration Requirement

• U.S. and foreign practicing accountants
• Attorneys
• Bankers
• Financial advisors
• Trustees 
• Others who advise foreign businesses wanting to, or have begun to sell their products and services within the U.S. or foreign person’s wanting to or considering doing Business in the U.S.  

For over 25 years, Jack has specialized in wealth tax matters for international private clients. He is widely published on various matters in the U.S. and abroad. He presents at international, as well as domestic conferences, on various international private client matters and investment, in the U.S. real property. He acts as outside counsel and consultant for a number of U.S. and foreign trust companies, on highly complex foreign trust matters.

In 2004, Jack had an article published in Trusts & Estates professional journal, namely, Foreign Trusts: The Capital Loss Debate. This article is still regarded, in the professional community, as the standard for U.S. tax treatment of net capital losses for U.S. beneficiaries of foreign non-grantor trusts.