H0440B1575A01205 MSP:CDM 04/23/13 #90 A01205
AMENDMENTS TO HOUSE BILL NO. 440
Sponsor: REPRESENTATIVE MUNDY
Printer's No. 1575
1Amend Bill, page 27, lines 3 and 4, by striking out all of
2said lines and inserting
3 if the transaction giving rise to the interest expenses and
4costs or intangible expenses and costs has a valid business
5purpose and economic substance and contains terms and conditions
6comparable to a similar arms-length transaction between
7unrelated parties. Tax avoidance may not be a significant
8motivation of entering into the transaction. The affiliated
9entity involved in the transaction may not be primarily engaged
10in the acquisition, use, maintenance or management, ownership,
11sale, exchange or any other disposition of intangible property.
12If the development, purchase of or other costs related to the
13intangible property giving rise to the payment were shared in
14any way by the party making the payment, the party making the
15payment must have been compensated at a fair market, arms-length
16price for the costs. If the party making the payment was not
17compensated, the interest expenses and costs or intangible
18expenses and costs shall not be deductible.
19Amend Bill, page 31, lines 23 through 25, by striking out "A
20transaction" in line 23 and all of lines 24 and 25 and inserting
21 The purpose must be established by the taxpayer using
22clear and convincing evidence, as further defined by
23department regulation.