Bill > H3639

This bill clarifies how a corporation's "net worth" is calculated for the purpose of the corporate excise tax, which is a tax levied on businesses. Specifically, it states that how a company accounts for an item on its books (whether it's considered debt or equity) will generally be considered the final word, unless the tax commissioner can prove the accounting treatment doesn't follow established standards like generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS). The bill also gives the commissioner the authority to question and disallow reserves for assets if they are deemed unreasonable. Additionally, it amends the law to include certain foreign income that is exempt from U.S. federal income tax, either through a treaty or other means, in the calculation of net worth. This act is intended to confirm the original intent of the law and applies to all open tax years.