After finding some success in pressuring Deerfield, Illinois-based Walgreens not to invert, Sen. Dick Durbin has set his sights on another multinational in his home state.
The Senator sent a letter to the CEO of Lake Forest, Illinois-based Hospira on Aug. 14, urging them not to undergo a corporate inversion, according to The Chicago Tribune. An inversion is the process of acquiring a smaller, foreign company, merging the two companies and then using the opportunity to re-domicile abroad. This often allows companies to enjoy a significantly smaller tax burden and spend any money from foreign profits that it has held abroad in foreign subsidiaries.
“I strongly urge you and the Board of Directors not to duck your corporate responsibility by moving overseas to dodge paying U.S. taxes,” Durbin wrote in the letter to CEO Michael Ball, according to Crain’s Chicago Business. “A significant portion of Hospira’s revenue comes from U.S. taxpayers and depends on U.S. taxpayer-funded support.”
In discussing money from U.S. taxpayers, Durbin was referring to technologies purchased through taxpayer-supported programs, like injectable drugs and infusion tech, according to the news source. Programs like the Veterans Health Administration and Medicare have “contributed to Hospira’s corporate success.”
Some critics have accused Durbin and other Democrats of making corporate inversions an election issue in response to growing public awareness of and frustration with the practice. Crain’s Chicago Business also noted that, while Durbin appears to have been successful in blocking Walgreens from moving abroad by publicizing the issue, Hospira has less to lose in the game of public opinion, as it isn’t a consumer brand.
Durbin helped to introduce the “No Federal Contracts for Corporate Deserters Act” recently, which would bar companies that undergo an inversion from receiving federal defense contracts. Such a bill might be effective in some cases, but is unlikely to pass before the November election.
As tax attorneys I’ve analyzed the approach Senator Durbin has been taking in regards to corporate tax inversion. If you would like to read more, here are a few my previous posts on the subject.
Breach of Contract Explained: Types and Consequences
Breach of contract disputes are the most common type of business litigation. Therefore, nearly all New York and New Jersey businesses will likely have to deal with a contract dispute at least once. Understanding when to file a breach of contract lawsuit and how long you have to sue for breach of contract is essential […]
How to Dissolve a Corporation in New Jersey: A Step-by-Step Guide
Closing your business can be a difficult and challenging task. For corporations, the process includes formal approval of the dissolution, winding up operations, resolving tax liabilities, and filing all required paperwork. Whether you need to understand how to dissolve a corporation in New York or New Jersey, it’s imperative to take all of the proper […]
Gross Lease vs. Net Lease: Understanding the Key Differences
Commercial leases can take a variety of forms, which is often confusing for both landlords and tenants. Understanding the different types, especially the gross lease structure, is important when selecting the lease that best suits your needs. One key distinction between lease types is how rent is calculated and paid. This article addresses the two […]
What to Do If You Are Impacted by a Retailer Bankruptcy Part 2
Over the past year, brick-and-mortar stores have closed their doors at a record pace. Fluctuating consumer preferences, the rise of online shopping platforms, and ongoing economic uncertainty continue to put pressure on the retail industry. When a retailer seeks bankruptcy protection, a myriad of other businesses are often impacted. Whether you are a supplier, customer, […]
The Current Administration's Proposals for the Financial Services and Banking Industries Will Affect Your Business
Since his inauguration two months ago, Donald Trump’s administration and the Congress it controls have indicated important upcoming policy changes. These changes will impact financial services policies and priorities. The changes will particularly affect cryptocurrency, as well as banking rules and regulations. Key Regulatory Changes in Cryptocurrency For example, in the burgeoning cryptocurrency business environment, […]
Tips for Commercial Landlords Impacted by Wave of Retailer Bankruptcies Part 1
The retail sector has experienced a wave of bankruptcy filings over the last year. Brick-and-mortar businesses in financial distress include big-name brands like Big Lots, Party City, The Container Store, and Vitamin Shoppe. When large retailers seek bankruptcy protection, they are not the only businesses impacted. Landlords can be particularly hard hit. While commercial landlords […]
No Aspect of the advertisement has been approved by the Supreme Court. Results may vary depending on your particular facts and legal circumstances.
Sign up to get the latest from our attorneys!
Explore What Matters Most to You.
Consider subscribing to our Firm Insights mailing list by clicking the button below so you can keep up to date with the firm`s latest articles covering various legal topics.
Stay informed and inspired with the latest updates, insights, and events from Scarinci Hollenbeck. Our resource library provides valuable content across a range of categories to keep you connected and ahead of the curve.
Let`s get in touch!
Sign up to get the latest from the Scarinci Hollenbeck, LLC attorneys!
