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S 2041

Provides for the care of retired law enforcement dogs

2025 Regular Session Introduced by Monica Martinez and 1 co-sponsor

closes a corporate tax-haven loophole by identifying and reporting tax haven jurisdictions, requires disclosures for water’s-edge filers, and biannual legislative reports.

REFERRED TO CODES
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WeVote Research Nonpartisan
Bill Summary · S 2041

Summary — S.2041 (Introduced 2025): "An Act closing a corporate tax haven loophole"

Note on sources/metadata
- The bill text supplied amends Section 32B of chapter 63 and clearly targets corporate use of tax-haven jurisdictions. Several pieces of accompanying metadata appear inconsistent (alternate bill titles about retired law‑enforcement dogs; differing sponsor lists and committee referrals). This summary is based on the bill text and docket entries provided; where metadata conflicts, that is noted below.

Purpose / Intent

To reduce corporate income tax avoidance by closing a “tax haven” loophole in state corporate tax law. The bill (1) identifies a specific list of jurisdictions treated as tax havens, (2) establishes criteria and a process for identifying additional tax‑haven jurisdictions, (3) requires enhanced disclosures from corporations that make a water’s‑edge election, and (4) mandates biannual reporting by the tax commissioner to the Legislature.

Key provisions

  • Amendment target: Inserts new subsections into Section 32B of chapter 63 (state corporate tax code).
  • Explicit list of tax‑haven jurisdictions: identifies specific overseas jurisdictions (e.g., Andorra, Bermuda, Cayman Islands, Hong Kong, Ireland? [note: Luxembourg, Malta, Singapore, Switzerland, Netherlands, etc.] — full list included in bill text).
  • Commissioner reporting:
    • Biannual public report to the Legislature with recommendations for additions/subtractions to the tax‑haven list.
    • In developing reports, the commissioner will treat a jurisdiction as a tax haven if, during the tax year, it has no or nominal effective tax on relevant income and meets at least two of three criteria (see below).
  • Tax‑haven identification criteria (must meet ≥2 of 3):
    1. Disproportionately large reported income relative to local property, payroll, and sales factors.
    2. Local laws, rules, or practices encourage income shifting (examples: barriers to effective information exchange, lack of transparency, facilitating foreign‑owned entities without substantive local presence, excluding domestic market access, or a large untaxed offshore financial sector).
    3. Recognition/marketing by experts as a tax haven for corporations.
  • Disclosure requirement for water’s‑edge filers:
    • The commissioner may require, within six months after filing the federal return, a “domestic disclosure spreadsheet” showing income reported to each state, tax liability by state, allocation/apportionment methods, identity of the water’s‑edge group and U.S. affiliates.
    • The commissioner may require the same disclosure for income reported to jurisdictions on the tax‑haven list.

Who is affected

  • Corporations filing under chapter 63 that make a water’s‑edge election.
  • Corporations with members or affiliates incorporated in the named tax‑haven jurisdictions or those later designated.
  • The Department of Revenue (commissioner) — increased reporting, review, and enforcement responsibilities.
  • State Legislature and public — will receive biannual public reports and recommendations.

Potential impacts

  • Increased transparency of multistate and international income allocation and reporting.
  • Greater administrative burden on affected corporations and on the tax commissioner for review and public reporting.
  • Potentially broader tax base and increased state revenue over time if disclosure reduces profit shifting to low/no‑tax jurisdictions.
  • Dynamic list and criteria allow the state to adapt to changing tax‑avoidance practices.

Procedural status & timeline (as provided)

  • Filed: Senate Docket No. 2221 — filed 1/17/2025 (bill text shows presentation by Sen. Mark C. Montigny).
  • Introduced in Senate / read twice: 6/11/2025; referred (multiple entries show referrals to Codes and to Revenue in different records).
  • Hearing(s) scheduled/rescheduled: hearings listed for 10/03/2025 (Gardner Auditorium) with varying times.
  • Note: Metadata inconsistencies (alternate sponsors, different short titles, and multiple committee referrals) should be reconciled with the official legislative clerk or bill tracking system for authoritative current status.

If you want, I can:
- Extract and present the full list of named jurisdictions as a copyable table.
- Produce a short one‑page explainer for corporate counsel or municipal tax officials.

Compiled from official sources — confirm details with the bill’s official record.

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