On 20 June, 2024, the U.S. Supreme Court delivered its opinion on Moore v. United States. This case addresses the one-time mandatory repatriation tax enacted under the 2017 Tax Cut and Jobs Act.
As previously reported, the repatriation tax mandated that U.S. taxpayers holding shares in foreign corporations pay a one-time tax on their share of the company’s earnings, regardless of whether those earnings were reinvested in the corporation and not received by the taxpayers.
In Moore v. United States, Charles and Kathleen Moore contested the tax on constitutional grounds, arguing that income must be distributed (realised) before it can be taxed as per the 16th Amendment. However, the 9th Circuit Court of Appeals dismissed Moore’s argument before it was presented to the Supreme Court.
Justice Kavanaugh affirmed that the Supreme Court upheld the 9th Circuit Court’s ruling, stating that the mandatory repatriation tax established by the Tax Cuts and Jobs Act is constitutional and within Congress’ authority.
