U.S. states are trying to capture corporate income taxes lost to offshore havens, wary of companies exploiting rules that let them channel cash abroad and weary of congressional inaction.
Oregon enacted a bill for the 2014 tax year identifying 39 countries and territories as corporate shelters a decade after Montana passed the first such law. The Democrat-controlled Maine legislature gave initial approval this week to similar legislation over Republican objections that it was “anti-business,” and states including Minnesota and Rhode Island are considering or studying such measures.
Business groups including the Council on State Taxation, a Washington-based trade association, oppose tax-haven measures. States already have tools to address artificial income shifting, and punishing companies without proof is unfair, said Ferdinand Hogroian, the group’s tax and legislative counsel.
“The fact that you are doing business or have an entity outside the U.S. does not represent the fact that you are shifting income out of a state,” Hogroian said.