In this article, Brian Hamer, MTC counsel, argues for states either to follow the lead of the federal government and tax Global Intangible Low Taxed Income (GILTI) or to adopt an alternative approach to address international income shifting by global enterprises. The article describes the federal tax on GILTI which is part of the Tax Cuts and Jobs Act, the reasons that motivated Congress to act and which equally to states, the magnitude of global income shifting by U.S. corporations and the adverse impact on state tax bases, the inadequacy of traditional tools to address this problem, and the key legal issues that relate to state taxation of GILTI.
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