Bradley Attorneys Featured in Law360 Tax Authority article on SALT in Review
Law360 Tax Authority
Bradley attorneys Bruce Ely, Chris Grissom, Jimmy Long and Will Thistle were featured in a Law360 Tax Authority article highlighting recent tax developments.
The author of the article, David Brunori, included these comments:
There is little question that Bradley Arant Boult Cummings LLP has the best state and local tax lawyers in Alabama. Indeed, its lawyers are among the best in the nation. The partners include Chris Grissom, James Long, Will Thistle and the legendary Bruce Ely.
The firm's Chris Grissom and James Long scored one of the biggest wins in the SALT world this year. They represented Pfizer Inc. before the Alabama Tax Tribunal. The tribunal held that interest payments that Pfizer made to a related company in Ireland should not have been added back to its Alabama taxable income because the payments were subject to tax in Ireland.
As in many states, the Alabama corporate tax laws include an add-back statute. In Alabama, a taxpayer must add back the interest and intangible expenses paid to a related member and deducted for Alabama income tax expenses unless the payments qualify for an exception. The add-back requirement does not apply to expenses that are subject to tax based on the related member's net income in the same tax year in Alabama, in another state or in a foreign nation that has an income tax treaty with the United States.
The tribunal held that the interest payments were attributed to Ireland and qualified for the exception. The tricky part of the case was that the related company in Ireland had interest deductions for payments to another related party in Luxembourg. That, correctly I think, did not seem to bother the tribunal. What mattered is that the interest received from Pfizer was included in the related company's Ireland income tax return. There is a lesson there.
Anyway, that's a big win for Pfizer. Hats off to Grissom and Long.
The complete article, “NY’s Out-of-State Play And Ala.’s Add-Back: SALT In Review,” was published August 15, 2022. (login required)