State and Local Tax (SALT) attorney Jimmy Long was quoted in Tax Analysts on an Alabama tax tribunal’s decision that a financial institution is entitled to a financial institution excise tax (FIET) deduction for dividends received from a corporation organized under Alabama law. Long, who represented the taxpayer, explained that the decision is a reminder to the Department of Revenue that if it doesn’t like a particular corporate tax planning idea that’s clearly allowed by current law, it should take the issue to the Legislature and seek their input.
“The ruling focuses on the use of captive REITs by financial institutions and the Department’s ongoing attempt to bypass the Alabama Legislature in denying the favorable tax treatment afforded to these REITs under Alabama law,” Long told Tax Analysts February 10. “While the
Department has successfully advocated for legislation targeting captive REITs for corporate income tax purposes, the bill specifically excluded REITs owned by financial institutions.”
The complete article, “Alabama Tax Tribunal Allows Deduction of Dividends from REIT,” appeared in Tax Analysts. (login required)