Bill > S1524

This bill aims to close a loophole that allows corporations to avoid taxes by shifting profits to tax havens, which are jurisdictions with little to no taxes on certain income and that meet specific criteria. The bill adds a list of 35 jurisdictions, including places like the Cayman Islands, Bermuda, and Luxembourg, to the definition of a tax haven. It mandates that the commissioner of revenue will report to the legislature every two years with recommendations on adding or removing jurisdictions from this list, and this report will be publicly available. A jurisdiction is considered a tax haven if it has no or nominal taxes on relevant income and also meets at least two of three conditions: income reported there is disproportionately large compared to the economic activity in that jurisdiction, its laws encourage such large income reporting by being non-transparent or preventing information exchange, or it's recognized or marketed as a corporate tax haven. Furthermore, corporations making a "water's-edge election" (a tax accounting method that allows companies to exclude certain foreign income from taxation) may be required to provide detailed financial information about income reported to both states and these identified tax havens.