Sending employees or representatives into the United States may, as a result, have the unwelcome effect of subjecting a foreign corporation’s worldwide income to state or local tax, on an apportioned basis. Federal tax treaty provisions will not protect foreign corporations from state and local taxes.

Peter Leonardis, in an article in Corporate Business Taxation Monthly, discusses a recent New York case that reaffirms a state’s jurisdiction to tax a foreign corporations’ income even when the foreign corporation has no permanent establishment in the state.

Earlier this year, the U.S. Supreme Court ruled on MeadWestvaco Corp v. Illinois Dept. of Revenue. At issue was whether Illinois is constitutionally prohibited from taxing an apportioned share of the $1 billion gain realized by Mead Corporation in 1994 when it sold its investment in Lexis/Nexis.

Michael S. Schadewald, in the Journal of State Taxation, provides insight into the High Court’s interpretation of “operational function” in the unitary business principle.

So-called “tenant-friendly” buildings provide an uninterrupted, stable source of power as well as specific humidity and temperature ranges to hi-tech business leasing clients. LTR 200752012 addresses whether certain specially outfitted buildings qualify as real property for real estate investment trust (REIT) purposes under Code Sec. 856(c).

Daniel Cullen, in an article in the Journal of Passthrough Entities, provides an overview of the REIT asset and income tests, as well as the specific “real property” and “tenant services” issues addressed in the ruling.

Congress recently broadened the scope of the Tax Reform Act of 1986, the so-called “kiddie tax,” by increasing the covered age from under age 14 to under age 18.

In an article in Taxes — The Tax Magazine, Gary L. Maydew discusses how the new “kiddie tax” provisions change tax planning.