International Tax: U.S. Legislative Update

A number of important provisions impacting international transactions are included in H.R. 1424 (the Bill), which President Bush signed into law on October 3, 2008. The Bill was approved by the Senate on October 1, 2008, and then by the House of Representatives on October 3, 2008. The Bill contains three distinct subdivisions:

• The Emergency Economic Stabilization Act of 2008
• The Energy Improvement and Extension Act of 2008 (the Energy Act)
• The Tax Extenders and Alternative Minimum Tax Relief Act of 2008 (the Extenders Act)

Several provisions within these subdivisions specifically relate to international tax. Notably absent from the Bill is any provision further postponing implementation of the worldwide interest allocation election beyond the deferred date already established under the Housing and Economic Recovery Act of 2008. Most importantly for corporate taxpayers focused on outbound transactions, the Bill contains a number of extenders that relate to provisions of existing law currently scheduled to sunset.

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