Tech Industry Girds for Tax Battle

Electronic Business (6/30, Harbert) – The Obama administration hopes to raise some $210 billion over the next 10 years by changing the rules governing how foreign earnings of United States multinational companies are taxed…In general, the changes would increase taxes on US multinationals. For technology companies -- many of which earn the majority of their revenue outside the United States -- that increase could be substantial.

Foreign sales “expand our R&D base and our capital expenditures domestically,” according to Peter Cleveland, VP of global public policy at Intel Corp. “We spend $10 billion on those two categories annually,” he said. “If we're doing well overseas, where 95% of the consumers are in this world, then that helps expands our US investment, which expands jobs.”

Obama is offering an olive branch to the industry by proposing to make the R&D tax credit permanent. This would provide a tax cut of $74.5 billion over 10 years to companies that invest in the United States, according to the White House…Here are the parts of Obama’s proposal that are causing the most concern for the technology industry…