PhillyDeals: Tax rules have businesses scrambling

For business,

Tax Day

is March 15, a month before "human" 1040s are due at your post office.

Business owners and their bean counters are rushing to move last year's profits and losses across space and time, in hopes of contributing as little as they legally can to easing the federal deficit.

President Obama's "stimulus" budget changed some basic rules, and his proposed 2011 budget will change some more, if it gets through Congress.

Companies are trying to anticipate next year's rules when they pay this year's taxes, says Scott Balestrier, tax managing partner in the Philadelphia office of national corporate accountant BDO. Here's what his clients are bracing for:

More refunds. "For 2009, every company is now allowed to 'carry back' net operating losses from five years back, not just three years," Balestrier told me.

That means companies that made money and paid taxes in 2004 and 2005, but lost last year, can claim refunds from those earlier federal-tax payments.

Paying up front. "The budget proposes to repeal the 'last-in, first-out' method for taxing inventory," Balestrier said. That means clothing stores and distributors may have to pay taxes deferred for years under the old rules.

Foreign loopholes closing. Biotech and pharma companies like to transfer intellectual property (patents, copyrights) to low-tax countries such as Ireland. They might get taxed 10 percent there vs. 35 percent in the United States. Proposed new rules on "transfer pricing" may eliminate that gap.

Will that hurt the U.S. drug business long term? "Outside the U.S., in Europe, China and India, they have a lower tax rate at the corporate level," Balestrier said.

Claim income now. The new budget levies, according to Balestrier, "potential increases in individual tax rates." Obama would let President Bush-era tax cuts expire, jumping the tax rate on many people earning more than $200,000 back to 36 percent, or to 39 percent for people earning more than $373,000.

"The problem is for partnerships and S-corporations [certain small businesses] and limited-liability companies," whose owners pay rates as if they were individual tax rates, Balestrier explained. "I might want to consider deferring deductions until the rates are higher, and accelerate income so I pay more income tax now" and not when the rates go up, he added.

The president also wants to tax the "carried interests" on private investment funds as if they were personal income, at up to 39 percent, instead of keeping them at the lower capital gains rate, currently 15 percent but scheduled to move to 20 percent.

"There'll be a battle in Congress again, no doubt," Balestrier concluded. "You know how tax rules work. Who knows what it's going to look like when they're done?"

Comcast Corp.

and

SAP AG

officials laid out mixed hiring news in separate statements Tuesday.

"We are consolidating some call centers, we are consolidating some warehouses," Comcast chief financial officer Michael Angelakis told investors at a Morgan Stanley conference.

"Those reductions, we're investing in other areas. We're investing in business services," Angelakis said. "We're going to hire 500 people this year in business services" to sell to small firms.

"Our hiring plans will be fluid," SAP chief financial officer Werner Brandt told a customer conference. Research and development can become "more efficient." But SAP does hope to add executives to boost software sales in Asia and other growing markets.

Plymouth Meeting-based

Urdang

, the real-estate-investment arm of

Bank of New York Mellon Corp.

, is financing some of the discount property sales that are slowly putting the wrecked housing industry back together.

Urdang says, for example, it has raised cash for Ridgeback Partners, of San Francisco, to buy more than 300 lots and homes in Las Vegas' Hillside section. These homes were bought and built for $37 million, for "pennies on the dollar" from banks that took them over in 2008. Urdang has also backed Ridgeback's deal to buy a failed gated community in Palm Springs, Calif.

Scott Urdang, the company's founder and chairman, retired as chief executive officer this week in favor of his deputy, Richard Ferst. Todd Briddell was named president. Urdang founded the firm in 1993.