The Obama administration’s proposed $3.9 trillion budget for 2011 includes tax changes for multinational corporations and U.S. import and export firms. Houston companies with international reach pay taxes in the U.S. as well as in the countries they’re dealing with, as Jason Ferguson with Houston CPA firm Calvetti, Ferguson & Wagner explains.
“And in most cases they get a credit on their U.S. tax return for foreign taxes paid. The international business in Houston is huge and it’s a very transient community. There’s lots of folks that move from other countries to Houston. Houston’s a very international transient city–A, because the energy business is so international, and the port that’s here. This port in Houston is, I believe, the second-largest port in the U.S.“
Some changes affecting international taxes were embedded in the health care bill. Companies with offshore headquarters are being examined by the current administration.
“I think everybody still has their eye on whether the administration is going to reach offshore and try to pull them in and tax those guys. I mean, all these companies that have gone to Cayman or the British Virgin Islands, the administration has given indications that they’re going to get very aggressive at trying to tax those companies and pull them back into the U.S.-taxable fold.“
Ferguson says 1,500 new IRS international tax agents are being brought on to specifically audit companies with overseas holdings, and countries have been signing agreements to share information. Ed Mayberry, KUHF News.