On February 14, 2018, TEI issued a new policy statement addressing the financial statement impact of tax law changes. The policy statement encourages states adopting corporate income tax policy changes such as rate increases or the enactment of combined unitary reporting to consider the immediate impact such changes may impose on the financial statement earnings of publicly-traded companies under U.S. Generally Accepted Accounting Principles. Further, TEI requests states adopting such tax policy changes to mitigate the financial statement impact of those changes by providing a future tax deduction that would permit the immediate recognition of a deferred tax asset to allow corporations to offset the negative financial statement impact that often occurs when states adopt such policy changes.
This policy statement was prepared under the aegis of TEI's State and Local Tax Committee, whose chair Marji Gordon-Brown. TEI Tax Counsel, Pilar Mata, coordinated the drafting of the policy statement. Other policy statements generated by the Committee can be accessed on the State and Local Tax Committee's page.