Business Law Advisory

March 2006

Personal Data Compliance and Whistleblowing - Conflicts!
Personal Data Privacy rules are essential to any US business with foreign employees. Recent European rulings highlight the need to tailor these policies to conform with "whistleblowing" rules adopted by all US public companies to comply with Sarbanes-Oxley. US rules can conflict with European and other regulations protecting the privacy of personal information. FBT has developed policies and documentation for complying with Personal Data Privacy rules in the EU and other countries. For additional information, contact Joe Dehner,, 513.651.6949.

Last call for 2006 export savings option for Sub S corporations!
With the phase-out of the extraterritorial income exclusion, US companies that are Sub S and have significant export sales can benefit by forming an IC-DISC. FBT has formed several of these entities for clients, to achieve meaningful tax savings. March 31 is the deadline each year for qualifying that year's export earnings under this IRS provision. For additional information, contact Joe Dehner,, 513.651.6949.

Commercial Activities Tax:
Businesses that act as agents for their clients should be aware of a potential exclusion from Ohio's new Commercial Activities Tax (CAT). The CAT generally applies to a business's taxable gross receipts that are sitused in Ohio. The tax applies to most gross receipts, whether they are derived from sales, services, or rentals. A business can exclude money from gross receipts, however, if it receives the money as an agent on behalf of another. In some cases, this exclusion may allow construction contractors to exclude from gross receipts any money that it receives from an owner that it pays to subcontractors. The Ohio Department of Taxation is expected to issue guidance on this exclusion in the near future. General Contractors and similar businesses that are familiar with the requirements and restrictions associated with this exclusion may be able to minimize their tax liability. Jeremy Hayden,, 513.651.6912 or Scott Martz,, 513.651.6881.

Tax Incentives:
On Wednesday, March 1, 2006, the United States Supreme Court heard oral arguments in the case of Cuno v. DaimlerChrysler. That case addresses the constitutionality of Ohio's investment tax credit under the Commerce Clause, and Frost Brown Todd LLC ("FBT") filed an amicus brief on behalf of several chambers located in Ohio, Kentucky, and Tennessee. The vast majority of the oral arguments focused on whether the taxpayer plaintiffs have standing to assert their constitutional attacks. If the Court determines that those taxpayers did not have standing, the Sixth Circuit's decision (finding that Ohio's tax credit was unconstitutional) would be reversed. A formal ruling from the Court is not expected for several more weeks. For additional information, contact Jeff Teeters,, 513.651.6715.

Additional Documents: