1. Institute of International Bankers Annual Tax Seminar June 19, 2007 Multi-State Developments and Controversies John J. Gallagher (moderator) UniCredit Markets and Investment Banking Bayerische Hypo- und Vereinsbank AG Richard A. Leavy, Partner Mayer, Brown, Rowe & Maw LLP Scott A. Clark, Principal State Tax Advisory Resource Jeffrey B. Gotlinger, Partner Ernst & Young LLP

2. IIB Annual Tax Seminar - June 19, 2007 2 2007/2008 NYS Budget Bill –“Loophole Closer” Provisions –Phase out of DRD for Banks with Captive REITs –Mandatory combination of captive REITs - Article 9-A –Conversion of certain “Grandfathered” Article 9-A corporations to Article 32 status –Expansion of the definition of “banking corporation” –Mandatory combination under Article 9-A for corporations with substantial intercorporate transactions

3. IIB Annual Tax Seminar - June 19, 2007 3 2007/2008 NYS Budget Bill – Other Provisions –Rate Reduction – 7.1% –Extension of Article 32 and NYC Bank Taxes through 2009 –Extension & Changes to the GLB Transition Rules –Accelerated SSF to 2007 for Art. 9-A –PC Partners & S-Corporations –Extended Tax Shelter Reporting

4. IIB Annual Tax Seminar - June 19, 2007 4 Issues Worthy of Technical Corrections Issues Worthy of Technical Corrections –Articles 9-A and 32 – limited overlap of anti-REIT provisions –Binding contract exception to Article 9-A conversion –Holding company exception to Article 9-A conversion –Limiting scope of DRD disallowance to dividends from a REIT holding company that are in turn attributable to “captive” REITS –Other

5. IIB Annual Tax Seminar - June 19, 2007 5 NY Administrative Developments –Corporate Partner Regulations –Article 9-A Investment Capital Regulations –NY Reportable Transaction Regulations

6. IIB Annual Tax Seminar - June 19, 2007 6 Advisory opinions – In re Deloitte Tax LLP [TSB-A-07(2)C] – In re Irwin M. Slomka [TSB-A-06(8)C] – In re Deloitte Tax LLP [TSB-A-06(2)C]

7. IIB Annual Tax Seminar - June 19, 2007 7 Important New Jersey Developments – Pfizer and Throw-out – Lanco and Economic Nexus – Combining Economic Nexus and Throw-out – Audit Initiatives – Taxation of Information Services

8. IIB Annual Tax Seminar - June 19, 2007 8 Other State Legislative Developments – Illinois “Loophole Closer” Bill – Texas Technical Corrections Bill – West Virginia - S.B. 749 – Indiana, Kentucky, & Maryland – Captive REIT’s

9. IIB Annual Tax Seminar - June 19, 2007 9 MBNA and Lanco appeal to U.S. Supreme Court – –Cert. Conference held on June 14th – –Decision on acceptance due on or after June 18th

10. IIB Annual Tax Seminar - June 19, 2007 10 TX OK NM ORMN IA WI AR MO LA AL FL KY IN TN NC SC WV MA NJ MD OH MI State Economic Nexus Landscape (as of April 9, 2007) Decisions*: Physical Presence Required Statute or Regulation: Physical Presence Not Required** Decisions*: Physical Presence Not Required PA NY * “Decisions” include administrative and judicial level decisions **States fall within this category if the state adopts an economic-presence standard for any state business activity tax (franchise, income, gross receipts) ***States with no general corporate income tax No Formal Guidance AK HI AZ CA NV *** UT WA*** MT WY*** CO KS NE SD*** ND IL MS GA VA VT NH ME CT RI ID Eff.1/1/08 DE

11. IIB Annual Tax Seminar - June 19, 2007 11 Multistate Trends – Increased Combined Reporting – Business Activity Tax Legislation – Related Party Add-back Statutes – Reportable Transaction Disclosures

12. IIB Annual Tax Seminar - June 19, 2007 12 Noteworthy NY Division of Tax Appeals determinations –In re American Banknote Corp., et. al.; TAT(H)03- 31(GC), TAT(H)03-32(GC), TAT(H)03-33(GC), May 30, 2007 –In re Viacom, Inc.; Determination DTA No. 819591; Tax Appeals Tribunal; May 3, 2007 –In re Delta Financial Corp.; Determination DTA No. 820677; 2007 STT 71-23; Doc 2007-9139; April 12, 2007

13. IIB Annual Tax Seminar - June 19, 2007 13 Noteworthy NY Division of Tax Appeals determinations –In re Astoria Financial Corporation; Determination DTA No. 820197; 2006 STT 166-20; Doc 2006- 15844; August 28, 2006 –In re Univisa Inc.; Determination DTA No. 820289; 2006 STT 162-18; Doc 2006-15498; August 22, 2006 –In re National Bulk Carriers, Inc.; TAT(H) 04- 33(GC); May 3, 2006

14. IIB Annual Tax Seminar - June 19, 2007 14 Questions and Answers