On November 22nd the US Department of Homeland Security ("DHS") announced that citizens of the US, Canada, Mexico and Bermuda that enter the US by air after January 22, 2007, will require a passport.

The US Treasury has issued a new "Model US Income Tax Convention" and Explanation dated November 15, 2006.

New tax legislation enacted May 17th changed the rules on the "foreign earned income" exclusion. Inflation indexing is moved ahead so that for calendar year 2006 the maximum exclusion amount is increased to $82,400. Changes to the "foreign housing cost exclusion" were also implemented and then subsequently improved upon by the IRS for certain high cost areas in Canada and elsewhere.

The IRS has announced the following inflation adjusted figures for 2007: For Expatriation Rules - "Average Annual Net Income Tax" (for five years) - $136,000, Foreign Earned Income Exclusion - $85,700, Annual Gift Tax Exclusion - $12,000 ($125,000 for gifts to a non-citizen spouse).

An out-of-state seller of concrete blocks that delivered goods to Wyoming via a common carrier and held a sales tax vendor's license was deemed to have nexus in Wyoming for Wyoming sales tax.

The New Jersey Supreme Court has determined that New Jersey may apply its business tax despite a taxpayer's lack of "physical presence" in New Jersey.

Out-of-state corporations that sell goods in Tennessee via independent contractors visiting Tennessee apparently have nexus in Tennessee for Tennessee franchise tax.

The US Congress was proceeding with proposed legislation that would expand the protection of P.L. 86-272 beyond net income taxes to transactions involving services and intangibles and would define the "nexus" standard. (H.R. 1956 and S. 2721). However it was removed from the House's schedule on July 27th with no immediate plans for consideration. The Senate bill is still pending.

The IRS has determined that some corporate mergers and consolidations undertaken by foreign corporations may qualify as tax free-reorganizations the same as those undertaken by domestic corporations, provided all requirements are met. The rule is effective for mergers and consolidations occurring after January 22, 2006.