Posts Tagged: "taxes"

The Tax Burden on Innovation Just Got Much Heavier and Not Many People Are Talking About It

I was not even aware of the issue below until a CPA friend of mine happened to mention it during a friendly telephone call. But unless Section 174 of the Internal Revenue Code is restored to its previous state from prior to the 2017 Trump tax cuts, U.S. innovation will be greatly impacted. Section 174 of the Internal Revenue Code has been around since 1954. It was enacted to eliminate uncertainty in the treatment of research and development (R&D) expenditures and to encourage businesses to carry on research and experimentation.

Amazon’s Big Brother Technologies: Tracking Life Milestones and Predicting a User’s Future Location

With data privacy concerns at the forefront in the wake of the Cambridge Analytica data scandal, it seems that Amazon isn’t completely in the clear when it comes to the security of consumer data on their platforms. Recent reports indicate that Amazon’s Mechanical Turk online worker marketplace was another platform targeted by the data collecting quiz application developed by Aleksandr Kogan, the Cambridge app developer behind the Facebook scandal. Data privacy concerns have also surfaced surrounding Amazon Web Services cloud platforms including inadvertent breaches of web-monitoring data stored on Amazon cloud services by private companies and the Pentagon alike. Amazon servers also collect voice recordings from consumers using its Alexa digital personal assistant which are also at risk of falling into the wrong hands unless a consumer manually deletes recordings through the Alexa app.

Transfer Pricing Basics for IP Professionals

Transfer pricing refers to the prices charged for goods, services, and intellectual property (IP) between or among legal entities of a corporation, including a parent company and its domestic and foreign subsidiaries and other controlled entities (each entity a “Taxpayer”)… Many transfer pricing analyses are nuanced in nature, relying upon datasets, models, computations, comparisons, assumptions, and interpretations. When controlled entities are domiciled in respective different jurisdictions, multiple transfer pricing systems may apply. Transfer pricing determinations may substantially impact Taxpayers’ tax burden and profitability. In other words, though challenging to perform, transfer pricing analyses offer opportunities to obtain more favorable tax treatment.

Got IP? Get out. For investors thinking of selling, acting in the next few days is critical.

As of the date of this publication, the US House of Representatives and the Senate have passed the “Tax Cuts and Jobs Act” as reconciled by the conference committee. Now that the President has signed the Republican tax bill into law, IP owners may find the tax bill will impact sales of certain intellectual property… Given that the Committee Bill directly contradicts itself with respect to the tax treatment of the sale of patents by taxpayers whose personal efforts created such property, it is unclear how this Bill will be implemented. It is unclear how gains or losses on a sale of self-created assets by a taxpayer who created a patent will be treated.

Tax Reform will Harm Inventors, High Tech Start-ups

More disturbing than the harmful effects the proposed changes would have – this signals a continuing approach toward patent rights as not being a property right, which contradicts the Patent Act and centuries of precedent. Indeed, the government’s destruction of the once great U.S. patent system is built upon a simple, yet scary philosophy: Where it matters, no one in government actually considers a patent to be a property right. If a patent is not a property right, a patent can be treated however the political winds blow (or political money flows). And that is exactly what has happened. So why not tax it more?