Bill > S1565

This bill clarifies how corporations determine their "net worth," which is a measure used for a corporate excise tax, by stating that a corporation's own accounting treatment of an item on its books will generally be considered controlling unless the tax commissioner can prove it doesn't follow established accounting standards like generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS). The bill also allows the commissioner to question the reasonableness of any reserves set aside for assets. Additionally, it amends a section of tax law to include certain income of foreign corporations that is exempt from U.S. federal income tax due to treaties or other reasons. The intent of this legislation is to confirm the original legislative intent that a corporation's own accounting practices should dictate how items are treated for tax purposes, and it applies to all open tax years.