What’s the buzz about the Border Adjustment Tax, and why should you pay attention to it?
The U.S. government is actively contemplating disallowing the deduction for costs of goods sold for imported items. In addition, revenue from sales outside of the country could be subtracted from total revenue in determining a corporation’s taxable income. Clearly, these adjustments would revolutionize corporate taxation. If your clients have not already asked about these proposals, they soon will. And we’re here to help.
Tony Nitti, a Surgent CPE instructor and tax policy blogger for Forbes, has detailed these rapidly evolving concepts in The Border Adjustment Tax For Dummies: Who Will Pay For The Wall?
“The wall, of course, will cost money — approximately $15 billion, in fact. Earlier today, White House Press Secretary Sean Spicer explained that the U.S. could “easily pay for the wall” by imposing a 20% tax on all imports from Mexico,” Nitti writes. “…The 20% tax on Mexican imports he referenced, after all, is merely the icing on the cake. Before we could even get to that point, it would require a major sea change in the way the U.S. taxes corporations.”
To read Tony’s A to Z take on this 20% tax, read the full Forbes article here.