Saturday, July 26 2014 6:44 AM EDT2014-07-26 10:44:31 GMT
The Ohio State marching band is moving forward without its director; a day after he was fired they're performing with the Columbus Symphony in what's often considered the band's unofficial season kickoff.More >>
Having forced out a beloved football coach and watched its president retire after a series of verbal gaffes, Ohio State University again finds itself grabbing headlines with the firing of a celebrated marching band...More >>
Saturday, July 26 2014 6:44 AM EDT2014-07-26 10:44:13 GMT
A federal judge has dismissed a Wyoming man's lawsuit claiming a group secretly found the missing airplane of aviation pioneer Amelia Earhart in the South Pacific but kept it quiet so it could continue to raise...More >>
A federal judge on Friday dismissed a Wyoming man's claims that an aircraft recovery group secretly found wreckage of aviation pioneer Amelia Earhart's missing airplane in the South Pacific but kept it quiet so it...More >>
Saturday, July 26 2014 2:02 AM EDT2014-07-26 06:02:47 GMT
Police are searching for two men who carjacked an SUV and plowed into a group of children and adults selling fruit at a Philadelphia street corner, killing three kids and seriously injuring two women.More >>
Police were searching for two men who carjacked an SUV and plowed into a group of children and adults selling fruit to raise money for their church, killing three kids and critically injuring their mother and the...More >>
Friday, July 25 2014 11:56 PM EDT2014-07-26 03:56:40 GMT
Police have arrested the foster parent of a 10-month-old girl who died after being left inside a hot car in Wichita, Kansas.More >>
A 10-month-old Kansas girl died after being strapped for more than two hours inside a sweltering car, and police arrested a foster parent who said he'd forgotten about her until something on TV jogged his memory, an...More >>
Friday, July 25 2014 10:33 PM EDT2014-07-26 02:33:36 GMT
U.S. District Judge Neil V. Wake was attending a ceremony for a judicial colleague when he received an urgent - and unusual - request: Lawyers for a condemned inmate wanted him to stop an execution that didn't...More >>
U.S. Sen. John McCain says the execution of an Arizona inmate that lasted two hours was torture.More >>
Friday, July 25 2014 9:35 PM EDT2014-07-26 01:35:42 GMT
A large family that lives at the shore and suffered losses during Superstorm Sandy will share a $20 million lottery jackpot that one of the 17 siblings said will be "a great pick-me-up."More >>
A lottery-playing tradition started by the matriarch of a large New Jersey shore family paid off for her 17 children this week when the group won a $20 million jackpot that will partly be used to help family members...More >>
Friday, July 25 2014 9:32 PM EDT2014-07-26 01:32:57 GMT
An 80-year-old man who came home to find two burglars said he shot and killed one of them despite her pleas that she was pregnant, but it's the woman's alleged accomplice who has been arrested on suspicion...More >>
Prosecutors Friday were waiting for the results of a police investigation into the killing of a burglar by an 80-year-old California homeowner who says he shot the woman in the back as she fled his home and ran down an...More >>
Friday, July 25 2014 9:15 PM EDT2014-07-26 01:15:50 GMT
A federal appeals court is upholding a Florida law that restricts what doctors can discuss about guns with their patients.More >>
A Florida law restricting what doctors can tell patients about gun ownership was deemed to be constitutional Friday by a federal appeals court, which said it legitimately regulates professional conduct and doesn't...More >>
Friday, July 25 2014 9:05 PM EDT2014-07-26 01:05:50 GMT
It's been called a David vs. Goliath story, a "Tale of Two Arthurs" and even the "ultimate Greek tragedy," but the characters in this drama are not Biblical or literary figures.More >>
It's been called a David vs. Goliath story, a "Tale of Two Arthurs" and even the "ultimate Greek tragedy," but the characters in this drama are not Biblical or literary figures. They're grocery store owners.More >>
Friday, July 25 2014 8:44 PM EDT2014-07-26 00:44:45 GMT
Two men forced a woman into the backseat of her vehicle at gunpoint, drove off but later lost control and plowed into a group of people on a corner near a fruit stand in Philadelphia on Friday, police said. Two...More >>
Two men carjacked a woman at gunpoint but soon sped out of control, killing three children Friday as they plowed into a group selling fruit to raise money for their church, Philadelphia police said.More >>
Unaccompanied minors enroll in US schools, presenting opportunities and extra costsMore >>
Unaccompanied minors enroll in US schools, presenting opportunities and extra costsMore >>
By TOM MURPHY AP Business Writer
A growing number of U.S. companies are looking to trim their tax bills by combining operations with foreign businesses in a trend that may eventually cost the federal government billions of dollars in revenue.
Generic drugmaker Mylan Inc. said Monday it will become part of a new company organized in the Netherlands in a $5.3 billion deal to acquire some of Abbott Laboratories' generic-drugs business. The deal is expected to lower Mylan's tax rate to about 20 percent to 21 percent in the first full year and to the high teens after that.
The Canonsburg, Pennsylvania-company's deal follows a path explored by several other U.S. drugmakers in recent months. AbbVie Inc. has entered talks with Shire Plc. over a roughly $53.68 billion deal that would lead to a lower tax rate and a company organized on the British island of Jersey.
But drugmakers aren't the only companies looking overseas for better tax deals.
Last month, U.S. medical device maker Medtronic Inc. said that it had agreed to buy Ireland-based competitor Covidien for $42.9 billion in cash and stock. The combined company would have executive offices in Ireland, which has a 12.5 percent corporate income tax rate. And drugstore chain Walgreen Co. - which bills itself as "America's premier pharmacy" - also is considering a similar move with Swiss health and beauty retailer Alliance Boots.
These tax-lowering overseas deals, which are called inversions, have raised concerns among some U.S. lawmakers over the potential for lost tax revenue. But business experts say U.S. companies that find the right deal have to consider inversions due to the heavy tax burden they face back home.
At 35 percent, the United States offers the highest corporate income tax rate in the industrialized world. By contrast, the European Union has an average tax rate of 21 percent, said Donald Goldman, a professor at Arizona State University's W.P. Carey School of Business.
In addition to the higher rate, the United States also taxes the income companies earn overseas once they bring it back home. The tax is the difference between the rate the company paid where it earned the income and the U.S. rate.
"We tax income where ever it is earned around the world once you bring it back home, and almost nobody else does that," Goldman said.
In addition to lowering a company's tax rate, inversions also can help a company reduce its U.S. tax liability through a process known as earnings stripping. Essentially, the U.S. business takes on debt to fund a dividend for its foreign operations and deducts interest payments on that debt.
Tax lawyer Bret Wells said companies consider an inversion only if they can put together a good deal that will help grow their business. The inversion is really a secondary benefit but also a way for corporations to "vote with their feet."
"When I can see that the other guy, my competitor, can reduce their tax bill, I want to look like them," said Wells, an assistant law professor at the University of Houston.
Inversions can happen if a U.S. company combines with a foreign business and shareholders of the foreign entity own at least 20 percent of the newly merged business. Legally, the foreign company might acquire the U.S. business or the two would create a new entity overseas. But the U.S. company often maintains both its corporate headquarters and control of the company.
President Barack Obama has proposed raising the threshold for inversions on foreign entity ownership to 50 percent, with the goal of making them less attractive.
But Wells, the tax lawyer, says more comprehensive tax reform is needed.
In the meantime, experts say companies will continue to consider inversions.
Walgreen Co. is among those considering it now. The drugstore chain acquired a 45 percent stake in the Swiss health and beauty retailer Alliance Boots in 2012, and it has an option to buy the rest of the company next year. Walgreen executives have told analysts that they will consider a host of variables like what the deal may do for the company's tax rate before they discuss their decision later this summer.
A Walgreen inversion may have a deeper impact than the drug and medical device makers that have already forged ahead because the drugstore chain's business centers on dealing directly with consumers.
The company will have to guard against any customer backlash, "since consumers have many choices when it comes to purchasing pharmaceutical and convenience goods," said Vishnu Lekraj, an analyst who covers the industry for Morningstar.
Wells, though, doubts that an inversion will trigger much consumer unhappiness.
"I think that the concern that the customer is going to have is the quality of what they're buying and the experience that they're going to have at the store," he said. "Inversion doesn't have anything to do with that."
Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
News On 6
303 N. Boston Ave.
Tulsa, OK 74103
TULSA'S OWN TM
GREEN COUNTRY'S OWN TM
Oklahoma's Own Newson6.com is proud to provide Oklahomans with timely and relevant news and information, sharing the stories, pictures and loves of Oklahomans across our great state including Tulsa's Own and Green Country's Own.