HB 1548 Summary

• Defines "Captive REIT" as a Real Estate Investment Trust that distributes half or more of its federal taxable income to related entities on a consolidated tax return or consolidated financial statement, and requires captive REITs to add back dividend deductions in computing taxable income.

• Expands restrictions on deducting intangible expenses and costs paid to related members by adding "management and administrative fees" to the list of restricted deductions and clarifying definitions of intangible property and related expenses.

• Defines "Subchapter K entity" as partnerships, limited liability companies, and similar pass-through entities subject to federal subchapter K, excluding single-member LLCs, for purposes of income sourcing and expense restrictions.

• Modifies the exception to expense add-back requirements to allow deductions when corresponding income is subject to net income tax in another U.S. state or in a foreign nation with an income tax treaty with the United States.

• Effective January 1, 2014, with no effect on tax claims, assessments, or appeals arising before the effective date.