Tax Law and International Tax Law

California law treats aircraft as taxable tangible personal property subject to annual appraisal and local property taxation. With counties like Los Angeles increasing enforcement efforts, aircraft owners face significant compliance obligations, potential penalties, and a complex valuation process. Understanding the state's filing requirements, exemptions, and critical deadlines is essential for anyone who owns or operates aircraft regularly based in California.

Florida's proposed constitutional amendment to expand homestead exemptions could fundamentally reshape the state's residential real estate market by altering buyer incentives and development economics. The measure, set for a November 2026 ballot, may eliminate non-school property taxes for up to 90 percent of primary households, creating ripple effects across land values, municipal revenues, and construction feasibility that extend far beyond simple tax relief.

New York City has begun notifying owners of high-value residential properties about a newly enacted annual surcharge on units not used as primary residences. While receipt of a notice doesn't automatically mean payment is required, it does impose response obligations on owners of second homes, investment properties, and trust-held residences. The surcharge faces active litigation, with courts currently permitting collection to proceed despite ongoing legal challenges.

The IRS has intensified scrutiny of partnership basis-shifting transactions that manipulate inside and outside basis rules to generate tax savings. While recent regulations were withdrawn under the Trump Administration, the agency maintains its position through Rev. Rul. 2024-14, which identifies three transaction types that fail the economic substance doctrine.

The U.S. Treasury and IRS have issued proposed regulations addressing a new category of income excluded from deduction eligible income under section 250(b)(3)(A)(i)(VII), which was introduced by the One Big Beautiful Bill Act. These regulations clarify how income from sales of intangible property and certain depreciable assets will be treated under the foreign-derived deduction eligible income regime, with significant implications for software transactions and related party transfers.

The US Department of Treasury defends its authority to regulate stock-based compensation in cost-sharing arrangements under IRC § 482, arguing the regulations fall within statutory bounds and are necessary to ensure arm's-length results between related parties. The government's response to McKesson Corporation's summary judgment motion addresses challenges based on the Loper Bright decision and notably abandons its six-year statute of limitations defense.

US corporate executives relocating abroad face complex tax obligations that extend beyond borders. From worldwide income taxation and foreign tax credits to state residency issues and potential expatriation taxes, understanding these planning areas is essential for avoiding costly penalties and optimizing your tax position.

Recent US court rulings have confirmed that foreign tax credits cannot offset the Net Investment Income Tax for American citizens living abroad, creating an additional layer of taxation even when income is already taxed in their country of residence. These decisions raise critical questions about the long-term viability of maintaining US citizenship for entrepreneurs and business owners who have permanently established their lives outside the United States.

The US Court of Federal Claims recently addressed a critical question for Canadian exempt organizations earning US-source income: can they rely on fiscal transparency rules to claim treaty benefits through investment vehicles? The court's ruling in The South Saskatchewan Community Foundation Inc. v. United States examines when charitable organizations may look through intermediary entities to access tax exemptions under the US-Canada tax treaty, with significant implications for cross-border investment

The City of New Orleans Department of Finance has launched a Sales Tax Amnesty Program offering businesses a limited-time opportunity to settle overdue sales tax obligations with significant penalty relief. Through December 31, 2026, qualifying taxpayers can resolve delinquent balances for sales taxes, use taxes, hotel/motel taxes, and other municipal taxes while having all penalties, negligence fees, and half of accrued interest waived.

California's Department of Tax and Fee Administration held its second meeting to discuss emergency regulations implementing Senate Bill 122, which will extend sales and use tax to prewritten software and SaaS starting January 1, 2027. Stakeholders raised critical questions about sourcing rules, contract transitions, multistate deployment, and administrative provisions that remain unresolved as the implementation date approaches.

The California Department of Tax and Fee Administration (CDTFA) has released draft regulatory language it is considering proposing, offering its first comprehensive view of how it may administer Senate Bill 122, California's expansion of sales and use tax to software as a service (SaaS) and certain digital products beginning January 1, 2027. CDTFA has not yet formally proposed these regulations through the emergency rulemaking process.