Articles

China AgTech

Roger Royse
December 31, 2017
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First there was an Industrial Revolution, then a Cultural Revolution, and now there is an Agricultural Revolution. The Royse AgTech Innovation Network brought Silicon Valley to China this past December, hosting pitches, panels and presentation events in Shanghai, Beijing, ShenZhen and Hangzhou (and additional events in Taipei, Hong Kong and Seoul). Panels consisting of cross border VCs, tech companies and members of Royse AgTech exchanged views on the state of agtech in Asia, including the investment climate and new innovation. It is clear from the exchange that China is poised to be an agtech powerhouse, both as a market for new technology as well as a source of innovation. Many countries and cities claim to be the next Silicon Valley, but China already has a Silicon Valley; in fact it ha...

Re: Tax Cuts and Jobs Act

Roger Royse
December 9, 2017
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December 8, 2017 The Honorable Mitch McConnell Majority Leader United States Senate 317 Russell Senate Office Building Washington, DC 20510 The Honorable Orrin G. Hatch Chairman United States Senate Committee on Finance 219 Dirksen Senate Office Building Washington, DC 20510 The Honorable Charles E. Schumer Minority Leader United States Senate 322 Hart Senate Office Building Washington DC 20510 The Honorable Ron Wyden Ranking Member United States Senate Committee on Finance 219 Dirksen Senate Office Building Washington, DC 20510 Re: Tax Cuts and Jobs Act Dear Majority Leader McConnell, Minority Leader Schumer, Chairman Hatch and Ranking Member Wyden: My law firm, the Royse Law Firm, is a Silicon Valley-based law firm that advises companies on tax, business, and corporate law matters. We re...

Re: Proposal to Remove section III.H.l. From the Chairman’s Mark of the Tax Cuts and Jobs Act

Roger Royse
November 15, 2017
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November 14, 2017 VIA U.S. MAIL U.S. Senate Committee on Finance 219 Dirksen Senate Office Building Washington, D.C. 20510-6200 I write in support of the tax reform efforts being considered by Congress and advocate for the removal of section III.H.1 from the Chairman’s Mark of the Tax Cuts and Jobs Act, JCX-51-17(2017). Overview My law firm, the Royse Law Firm, is a Silicon Valley-based law firm that advises companies on tax, business, and corporate law matters. If section III.H.l. becomes law, startup and growth tech companies will no longer be able to offer equity compensation to most employees, thus preventing American workers from sharing in the wealth of their companies. This will profoundly impair our tech sector and hinder U.S. competitiveness abroad. Current U.S. Tax Treatment of S...

A Different Kind of Republican Debate

Roger Royse
September 29, 2017
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Last Tuesday, on September 22, five GOP Presidential candidates participated in a forum in Silicon Valley. At our forum, you would not have heard questions such as “Do you think Carly is pretty?” or “Would you trust Donald to have his finger on the button?” or anything else that makes for good reality television and lousy elected officials. Instead, we discussed real issues that are important to Silicon Valley and, for that matter, to the whole country. RoyseLaw Presidential Candidates Forum was designed to focus on the big three issues: Technology, Tax and Immigration. “The Supreme Court has taken social issues off the table,” I told a reporter shortly before the forum, and that means that Silicon Valleys’ issues are the nation’s issues. This summer, Secretary Clinton stumbled badly when...

Re: Proposal to Extend Section 179 of the Internal Revenue Code to All Intangibles

Roger Royse
September 20, 2017
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September 15, 2017 VIA U.S. MAIL The Honorable Orrin G. Hatch Chairman Committee on Finance United States Senate 219 Dirksen Senate Office Building Washington, D .C. 20510 Re: Proposal to Extend Section 179 of the Internal Revenue Code to All Intangibles I write in support of the tax reform efforts being considered by the Senate Finance Committee and propose extending first-year expensing to intangible assets. Background My law firm, the Royse Law Firm, is a Silicon Valley-based law firm that advises companies on tax, business, and corporate law matters. Since I have started practicing law, the business world has changed considerably while the tax laws have not kept up with the country’s new and evolving technologies, market demands, or business practices. Extending Section 179 to All Inta...

Letter to the Hon. Cory Gardner Re: ASIAN, Inc.

Roger Royse
August 3, 2017
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August 3, 2017 VIA US MAIL The Honorable Cory Gardner 354 Russell Senate Office Building Washington DC 20510 Re: ASIAN, Inc. Dear Senator Gardner: I write to you as a member of the Board of ASIAN, Inc. to encourage you to support full funding (at the current enacted FY2017 level) of the U.S. Department of Commerce’s Minority Business Development Agency (MBDA) in FY2018, currently included the Department of Commerce Appropriations Act, 2018.1 I applaud the House and Senate appropriators for overwhelmingly passing appropriations bills that both fund the Minority Business Development Agency (MBDA) at $34 million in FY2018. I urge similar support by the full House and Senate of their respective Commerce, Justice, Science and Related Agencies Appropriations bills. On average, MBDA facilitates m...

Reintroducing the Income Tax Deferral on Equity Compensation

Roger Royse
May 19, 2017
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Ideally, it would be fair for all employees whose sweat equity increases the value of a private company to share in the ownership of that company. But under current tax law, this type of employee compensation policy can be prohibitively expensive. Employees must generally include stock compensation in their taxable income at grant or when the shares become substantially vested. Likewise, stock options are generally included in income upon exercise, which allows for some timing of the income tax, but also subjects them to an expiration date. This means employees who wish to acquire stock in their company may be forced to pay a high amount of income tax in the absence of liquid assets. If an employee cannot afford to pay this tax, then the employee will be discouraged from sharing in the com...

Lobbying for Legislation to Protect Your Worker Classification

Roger Royse
May 19, 2017
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Under current law, there is a presumption that workers are employees, and the IRS will aggressively pursue collection activities against employer-taxpayers that inappropriately classify employees as independent contractors. There is a conspicuous lack of bright line tests, however, for permissible classification variations under both federal tax and labor law standards. Moreover, the states’ varying standards create additional disparities in treatment. The uncertainty and complexity associated with classifying workers subjects the employer to expensive lawsuits, employment taxes, penalties, and interest for misclassification. Class action lawsuits from a misclassified employee can even lead to the bankruptcy of an otherwise emerging business. Thus, the highly subjective and fact-sensitive...

How a Startup Visa Program Can Lead to Meaningful Immigration Reform

Roger Royse
May 19, 2017
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Immigration is a valuable source of entrepreneurship and innovation in the tech community. This is demonstrated by the Silicon Valley and other tech-heavy regions’ heavy reliance on H1-B visas to bring skilled workers from other countries into their states. These visas are only available, however, to people migrating to the U.S. to work for established companies. Conversely, startup visas can help increase our nation’s human capital and economic output by attracting the best and brightest entrepreneurs from around the world. Thus, it is important to encourage entrepreneurship and facilitate innovation in the U.S. with startup visas so our nation can reap the benefits of emerging industries. Starting in July 2017, the Department of Homeland Security (DHS) may use its parole authority to gra...

Redefining S Corporation Eligibility for the 21st Century

Roger Royse
May 19, 2017
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Corporations are generally subject to two levels of tax: once at the corporate level and again at the individual level when corporate earnings are distributed. Certain corporations may elect under Subchapter S of the Internal Revenue Code to be subject to a regime in which the earnings are generally taxed only once to the individual owners of the corporation. The Subchapter S rules acknowledge the unfairness and inefficiency of the double taxation of C corporations, especially those that are debt financed; however, because of the limitations on eligibility, Subchapter S does not go far enough in allowing small businesses to compete on a tax-neutral basis. A corporation is not eligible to elect S status unless it has only one class of stock, no non-resident alien (NRA) shareholders, and no...
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