What do you think are the top issues/topics in state taxation today?

1. State income tax reform/response to federal tax reform (which covers a wide variety of issues - depreciation, foreign income, dividends, charitable contributions, NOLs, Domestic Production Deduction, Sec. 199A, M&E, interest expenses, Sec. 118, related party expenses, deemed repatriation, like-kind exchange repeal, Sec. 179 expense, R&E expenses amortization)
2. Wayfair Supreme Court Case regarding sales tax nexus/collection obligations/possible overturn of Quill/physical presence
3. State taxation of foreign income
4. Market-based sourcing impact (continuing trend)
5. Alternative apportionment (is it all alternative?)
6. Management & utilization of NOLs / 382 NOL issues
7. Combined reporting vs. separate reporting 
8. Single-sales factor apportionment impacts (continuing trend)
9. Whether to utilize Voluntary Disclosure Agreement/Amnesty programs
10. Utilizing and negotiating credits and incentives
11. State income taxation of pass-through entities (new pass-through entity audit rules)
12. Related party expenses / transfer pricing
13. Private letter ruling requests
14. Other?????

Businesses Want to Do Business, NOT Taxes

Businesses are playing a game where the rules keep changing, in the middle of the game. 

Taxes keep changing. A constant battle for businesses to keep up when all businesses want to do is business, not taxes.

Businesses must be able to do business with certainty. State tax laws already lack uniformity and create so many opportunities for businesses to screw up. Now, they keep changing, year to year, day to day.

Over the past few months as state governments have been in session, they have passed numerous pieces of legislation to balance the budget including changes to tax rates, filing methodologies, sourcing rules, etc. along with how or if they will conform to all or parts of federal tax reform.

I have been monitoring state tax legislation and have submitted approximately 30 alerts to clients regarding the changes (and we aren't done yet). More to come. 

Let's work together to make state taxes less important, so businesses can thrive.

STATE TAX KNOWLEDGE UPDATE (62 ITEMS) - MAY 2, 2018

The following are state tax and business developments I have curated since April 11th, and posted in the LEVERAGE SALT LinkedIn group:

Some of the items may be on the same state/issue/topic, but they are from different sources which may give you a broader perspective to help your company or client.

1. Legislative Session Review: Idaho

2. Legislative Session Review: Arkansas

3. Maryland Legislature Sends Single-Sales Factor Bill to Governor

4. Oklahoma Enacts Marketplace Sales Legislation

5. Oregon Updates IRC Conformity, Repeals Tax Haven Law

6. Oregon Extends Interstate Broadcaster Apportionment Provisions

7. Maine Amends Headquarters Credit, Other Provisions

8. Enacted Oklahoma Marketplace Sales Legislation Detailed

9. Virginia Allows Modified Apportionment Factors for Certain Companies

10. New York Enacts Budget With IRC Conformity, Other Changes

11. Nebraska Updates IRC Conformity

12. Tennessee Allows Financial Asset Managers to Elect Single Receipts Factor Apportionment

13. New Arizona Law Updates State Conformity to Some Provisions of IRC

14. Texas Comptroller Reminds that Tax Amnesty Program will Run from May 1 to June 29 and Provides for Potential Waiver of Penalties and Interest

15. Connecticut Administrative Guidance Discusses Treatment of IRC Sec 965 Federal Repatriation Transition Tax

16. New York 2018-2019 State Budget Bill Addresses Treatment of Some Provisions of the 2017 Federal Tax Reform Act

17. New Oregon Law Updates State Conformity to IRC for Specific Provisions and Extends Sunset Date of Modified Apportionment Regime for Interstate Broadcasters

18. New Alabama Law Requires Certain Marketplace Facilitators to Collect and Remit Tax or Else Adhere to Information Reporting Requirements

19. Oregon Enacts Qualified Business Income Addition

20. Kentucky Enacts Apportionment Formula, Rate, Other Changes

21. Kentucky Broadens Sales Tax Base, Hikes Cigarette Tax, Makes Other Changes

22. Digital Tax Arguments Focus on Role of Congress, Compliance Costs

23. Insight: ‘Wayfair: Covering the Waterfront—Amicus Briefs Supporting Respondents

24. A Brief History of the Biggest State Tax Case in a Generation

25. Rhode Island Discusses Treatment of IRC Sec. 965 Income

26. South Dakota v. Wayfair - TTR Explains What Tax Technology Options Really are Available

27. No Simple Story About Tax Bill’s Impact on States

28. Cap on the State and Local Tax Deduction Likely to Affect States Beyond New York and California

29. State & Local Tax Advisory: The Supreme Court Weighs a New State Tax Nexus Standard, Again | Alston & Bird LLP

30. New Mexico Administrative Hearings Office Issues Timely Opinion Regarding State Taxation of Subpart F Income and Dividends from Foreign Affiliates

31. Oregon Taxpayers Denied Use of MTC’s Apportionment Formula

32. Kentucky Might Require Combined Reporting, Many Tax Changes

33. Virginia Enacts Subtraction for REIT Income

34. The Tax-Savvy Company Restructuring

35. Adopt or adapt? New IRS partnership audit rules affect states

36. Legislative Session Review: Florida

37. New Jersey Permits Dedicated Prepayment of Anticipated Taxes

38. Maryland Phases in Single-Sales Factor Apportionment Formula

39. Legislative Session Review: Nebraska

40. New Arizona Law Allows Some Taxpayers to Bypass OAH Process and Appeal Tax Dispute Directly to Board of Tax Appeals

41. Arizona DOR Issues Notice Regarding Certain Fiduciary Return Filers with IRC Sec 965 Repatriation Income for 2017 Tax Year

42. California FTB Issues Fourth and Final Report to Legislature on Recently Enacted Federal Tax Reforms

43. New Maryland Law Phases in Single-Sales Factor Apportionment for Corporate Income Tax Purposes

44. New Nebraska Law Provides Adjusted Basis Computation for Certain IRC Sec 179 Depreciable Property

45. New Hampshire DOR Administration Issues Report on How 2017 Federal Tax Reforms May Affect State Income Taxation – New Law Revises Effective Dates of Tax Rate Changes Enacted in 2017

46. New York City Memo Explains Deemed Repatriation Income under GTC, BTX, and UBT

47. Pennsylvania DOR Discusses Application of IRC Sec 965 RTT to State CNIT

48. Rhode Island Division of Taxation Provides Guidance on Treatment of IRC Sec 965 Income for Individuals and Pass-through Entities

49. MTC Approves Hearing Officer Report on Apportionment Regulation Amendments

50. Ohio Supreme Court Overturns Reduced NOL Credit

51. THE BEST AND WORST OF SALES TAX ADMINISTRATION

52. Conformity with federal tax reform will result in an estimated state corporate tax base increase of about 12% for the first ten years

53. FY 2019 STATE BUDGET STATUS

54. NCSL: REMOTE SALES TAX COLLECTION ANALYSIS & OPINION

55. Years of work to simplify the collection of remote state sales taxes may soon pay off.

56. Kentucky legislature overrides Governor's veto of tax plan

57. Florida Explains Treatment of Repatriation Income

58. Kentucky Requires Combined Reporting in Tax Reform Bill

59. Pennsylvania Explains Treatment of Repatriation Income

60. Alabama Provides Guidance on IRC Sec. 965 Repatriation Income

61. Kentucky Clarifies Definition of Prewritten Computer Software

62. Kentucky Enacts Combined Reporting

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LEVERAGE SALT to daily curate state tax developments relating to a specific industry, state(s), tax type and issue. You can make it as granular as you prefer. This allows you to reduce information overload, and only get the information you need to help your clients or company. This service is provided on a fixed-fee or subscription basis. Contact me at strahle@leveragesalt.com.

Wayfair v. South Dakota - What is the Practical Issue?

I just finished reading the transcripts for the Oral Arguments in the Wayfair v. South Dakota (U.S. Supreme Court case). Despite all of the arguments, discussion and debate, one practical, simple matter came into focus - this whole thing is about whether a business (small or large) will have to complete sales tax compliance in 45 states (plus D.C.) or simply the one state it has a physical presence in. Obviously, the facts differ by company as some have a physical presence in several states or all states. But I am talking about those companies who have a physical presence in 1 or a handful of states. If South Dakota wins this case, that company's sales tax compliance burden goes from 1 state to 45 states (plus D.C.). And since most businesses (yes, even brick and mortar businesses) have a website, the sales tax compliance burden will increase on ALL businesses. Does that meet constitutional muster? Does that NOT increase burdens on interstate commerce?

As some of the Justices said - this is not a physical presence problem, this is the state's inability to collect use tax problem. I urge the Court to not transfer the state's problem, and burden Internet commerce. If states can't collect the tax, maybe they should impose a different tax they can collect.

P.S. - I have been reading lots of articles, posts about the case and the Oral Arguments. I have also read all of the briefs. If you would like more resources regarding this issue, check out the LEVERAGE SALT Linkedin group for several resources. 

STATE TAX KNOWLEDGE UPDATE (54 ITEMS) - APRIL 11, 2018

The following are state tax and business developments I have curated since March 13th, and posted in the LEVERAGE SALT LinkedIn group:

Some of the items may be on the same state/issue/topic, but they are from different sources which may give you a broader perspective to help your company or client.

1. Idaho Enacts Tax Reform Legislation

2. Washington Revises Nexus Rules

3. California Issues Notice Regarding Processing Docketed Protests

4. Vermont Gives Income Tax Nexus Examples

5. Wyoming Exempts Cryptocurrencies

6. New Idaho Law Generally Updates State Conformity to IRC and Selectively Updates Conformity to Some Federal Tax Code Provisions and Decouples from Others

7. Idaho State Tax Commission Grants Taxpayer Request for Use of Alternative Apportionment Method on Gain from Sale of LLC Interest

8. North Carolina DOR Explains Classification as a Holding Company for Franchise Tax Purposes and Qualifying for 150K USD Tax Liability Cap

9. Receipts from Service Contracts Must be Sourced In-State for CAT Purposes Because Underlying Property Tied to Services is Located in Ohio

10. Vermont Department of Taxes Issues Nexus Bulletin Including List of Nexus-Creating Activities

11. Case Challenging Economic Presence Administrative Rule is On Hold Pending the Outcome of US Supreme Court Litigation Involving Quill Physical Presence Standard in Tennessee

12. Washington DOR Issues Regulatory Amendments Reflecting 2017 Legislation that Expands Business and Occupation Tax Economic Nexus Provisions

13. State Tax Reform Opportunities and Challenges: The STAR Partnership

14. Business Income Tax Collections FF(3.19.2018)

15. Emergency Regulations Adopted for Appeals From CDTFA

16. Preliminary CA Report on IRC Conformity Revised

17. New York Allows Withdrawal of Group Election in Some Cases

18. California Releases Summary of 2017 Federal Legislation

19. Utah Enacts Tax Rate Cuts, Single Sales Factor Apportionment

20. Florida Enacts IRC Conformity, Rate Reduction

21. Virginia Court Confirms “Subject to Tax” Exception Decision

22. Individual Income Insights: Highlights of the ABA and IPT Advanced Income Tax Conference in New Orleans

23. Extras on Excise: U.S. Supreme Court to Decide Whether to Review Loudoun County BPOL Case, Possibly Adding a Second Major State Tax Case to its Docket

24. New York allows withdrawal of certain combined elections by June 1

25. Florida updates conformity to IRC; rate reduction possible

26. New Florida Law Updates State Conformity to IRC, Extends Bonus Depreciation Decoupling, and Includes Contingent Corporate Income Tax Rate Reductions

27. New Georgia Law Decouples from 2017 Tax Reform Act’s GILTI Provisions

28. New Idaho Law Generally Updates State Conformity to Federal Bipartisan Budget Act of 2018

29. Illinois DOR Discusses Recently Enacted Federal Tax Reforms - Specifically State Reporting Requirements Involving the New Foreign Income Deemed Repatriation Transition Tax

30. New Jersey Tax Court Reaffirms that Tech Company Foreign Source Income that is Not Taxable for Federal Purposes is Not Taxable under CBT

31. Memo Explains Limited-Time Withdrawal Procedure from Some Commonly Owned Group Elections in New York

32. Utah New Law Permits Corporations to Pay Tax on IRC Sec 965 Deferred Foreign Income in Installments, Lowers Corporate Tax Rate, and Expands Mandated Single Sales Factor Apportionment

33. Virginia Supreme Court Holds that Intercompany Royalty Payments Must be Taxed in Another State to Qualify for Subject-to-Tax Addback Exception Once More

34. New Idaho Law Imposes Remote Seller Click-Through Nexus Provisions

35. Indiana New Law Provides that Remote Access Software is Not Subject to Tax

36. Louisiana Trial Court Holds that Online Marketplace Facilitator Must Collect Local Sales and Use Taxes on Third-Party Retailer Online Sales

37. Arizona Changes Multistate Service Provider Apportionment Rules

38. Illinois Proposes Addition Adjustment for FDII and GILTI

39. Alabama Changes Income Tax Filing Thresholds

40. Oklahoma Caps Personal Itemized Deductions

41. Florida Enacts Tax Rate Reductions and Modifications

42. COST: Tennessee Testimony on Federal Tax Reform Conformity

43. New Hampshire’s Internet Sales Tax Fight Continues

44. New Wisconsin Law Updates State Conformity to IRC and Couples and Decouples from Various Provisions of the 2017 Federal Tax Reform Act

45. New Utah Law Revises Certain Single Sales Factor Apportionment Method Provisions

46. New Ohio Law Updates State Conformity to IRC

47. New York City Memo Explains Limited-Time Withdrawal Procedure from Some Commonly Owned Group Elections

48. New Arizona Law Includes Sales from Intangibles in Defining Multistate Service Providers that May Elect Use of Special Sales Factor Sourcing Provisions

49. Louisiana: Online marketplace provider required to collect sales tax

50. Legislative Session Review: Wisconsin

51. Wisconsin Tackles IRC Conformity

52. Arizona Updates IRC Conformity

53. Kentucky Governor Vetoes Major Tax Legislation

54. Corporate Close-Up: Alabama Pass-Through Entity Owners, Rejoice! Why You May be Entitled to a Refund for The 2013 Through 2017 Tax Years

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LEVERAGE SALT to daily curate state tax developments relating to a specific industry, state(s), tax type and issue. You can make it as granular as you prefer. This allows you to reduce information overload, and only get the information you need to help your clients or company. This service is provided on a fixed-fee or subscription basis. Contact me at strahle@leveragesalt.com.

STATE TAX KNOWLEDGE UPDATE (70 ITEMS) - MARCH 13, 2018

The following are state tax and business developments I have curated since February 7th, and posted in the LEVERAGE SALT LinkedIn group:

Some of the items may be on the same state/issue/topic, but they are from different sources which may give you a broader perspective to help your company or client.

1. Sweeping New Iowa Tax Policy Unveiled

2. Idaho Enacts New IRC Conformity Date

3. Georgia Introduce IRC Conformity Bill

4. West Virginia Passes Federal Conformity Bill

5. Sales Subject to Indiana Throwback Rule

6. Idaho Sends IRC Conformity Legislation to Governor

7. Kansas Might Repeal Multistate Tax Compact Provisions

8. Corporate Close Up: D.C. Denies Big Oil Summary Judgment on Multimillion-dollar Chainbridge Transfer Pricing Case

9. Tax Reform Friday: High Income Tax States Strike Back Against Limitation of State Tax Deduction

10. Individual Income Insights: Many States Mulling Conformity to “Fit In”

11. Extras on Excise: States are Smitten for Fuel Tax Revenue

12. Sales Tax Slice: Sourcing Online Purchases from Physical Stores

13. Effective NOL Planning in Light of Tax Reform | Tax Executive

14. Pennsylvania DOR Issues Non-Participation Penalty Assessments to Delinquent Taxpayers that Failed to Partake in 2017 Tax Amnesty Program

15. The Empire State is Open for Business – Overview of Select New York Credits and Incentives

16. Nexus Considerations: Navigating the "Kill Quill" Revolt

17. District of Columbia Confounds Opposition to Its Transfer Pricing Strategy

18. Implications to Illinois Repeal and Replacement of Its Unclaimed Property Act

19. Louisiana Governor Calls Special Session to Address Fiscal Cliff

20. COST: State-by-State Scorecard Summaries and State Legislative Targets

21. 2018 State Tax Amnesty Programs

22. 2017 State Tax Amnesty Programs (in case you missed it)

23. COST’s Opposition to House Bill 2489, Retroactive Repeal of Multistate Tax Compact Provisions

24. COST’s Opposition to Senate Bill 227, Mandatory Unitary Combined Reporting

25. California Issues Out-of-State Voluntary Disclosure Application

26. Idaho Enacts New IRC Conformity Date

27. Tax Reform Friday: Idaho and West Virginia Take Differing Approaches to I.R.C. Conformity Post-Pub. L. No. 115-97

28. West Virginia IRC Conformity Date Updated

29. Virginia Enacts IRC Conformity Legislation

30. Corporate Close-Up: California Holds LLC Member Responsible for Entitys Tax Liabilities

31. Extras on Excise: By Taxing Uber and Other TNCs, Alabama Joins the Club

32. Corporate Close-Up: New York City Tribunal Rules on Sourcing of Services from Subscription-Based Consulting

33. Property Tax Post: Payment in Lieu of Tax Already a Success?

34. Individual Income Insights: Many States Mulling Conformity to “Fit In”

35. Court or Congress? State Online Sales Tax Power Set for Change

36. Update: Companies Face Setback in Challenge to District of Columbia’s Use of Chainbridge Transfer Pricing Method

37. Congress Extends Tax Incentives for Energy Production and Conservation

38. 2018 STATE LEGISLATIVE SESSION CALENDAR

39. MTC Files Brief in Support of South Dakota’s Petition in Wayfair Case

40. Could States Fix The SALT Deduction Cap By Taxing Pass-Throughs and Giving Their Owners A Credit?

41. Ohio Department of Taxation Reissues Release on Nexus Standards and Filing Safe Harbors for Pass-Through Entities

42. Partnership Not Liable for Nonresident Partner’s NJ Tax

43. Michigan Explains Apportionment of Industrial Processing Exemption

44. Federal Tax Reform—Multistate Tax Considerations and Conformity

45. Colorado DOR Holds that Alternative Apportionment is Warranted Under Taxpayer Provided Facts

46. District of Columbia CFO Addresses How Recently Enacted Federal Tax Reforms May Affect Some Taxation in the District

47. New Idaho Law Specifies 120-Day Timeframe to Report Federal Tax Audit Adjustments

48. New Virginia Law Updates State Conformity to IRC and Decouples from Some Provisions of the 2017 Federal Tax Reform Act

49. New West Virginia Law Updates State Conformity to IRC

50. US Supreme Court Schedules Oral Arguments in Case Challenging the Constitutionality of Remote Seller Economic Nexus Law for April 17

51. Colorado DOR Issues General Information Letter Addressing Certain Remote Seller Notice and Reporting Requirements

52. South Carolina DOR Announces Acceptance of Retail Sales Tax Applications from Third-Party Suppliers of Products Sold via Online Marketplace Provider Website to In-State Purchaser

53. Could Colorado actually simplify its sales tax system? Let's hope so.

54. Tax Reform Friday: More Tax Reform Bills and Proposals; Texas v. ACA–Round 2

55. Corporate Close-Up: ‘Kill Quill’—What the End of Quill Would Mean for Corporate Income Taxpayers

56. Georgia Enacts IRC Conformity Update, Rate Cut

57. Michigan Keeps Personal Exemptions

58. Oregon Tax Bill Includes IRC Conformity

59. Illinois Introduces Marketplace Fairness Act

60. Alabama Tax Amnesty Program Enacted

61. New Alabama Law Requires 2018 Amnesty Program Providing for Potential Waiver of Interest and Penalties

62. Michigan Department of Treasury Explains New Law Permitting Alternate Method of Dispute Settlement and Resolution for Certain Tax Liabilities

63. California FTB Explains Refund Claim Procedures Pursuant to 2017 Appellate Court Ruling

64. New Georgia Law Updates State Conformity to IRC

65. Illinois DOR Addresses How Recently Enacted Federal Tax Reforms May Affect Some State Income Taxation

66. New Michigan Law Generally Updates State Conformity to IRC and Permits Taxpayer Election to Conform to IRC in Effect for Tax Year

67. Partnership Not Liable for Out-of-State Limited Partner CBT in New Jersey

68. Connecticut DOR Services Sends Use Tax Notices to Online Customers Based on Information Provided by Online Retailers

69. Chart of States with and without State Tax Tribunals (as of 2/3/16)

70. Florida Reaches Agreement on IRC Conformity, Other Tax Issues

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LEVERAGE SALT to daily curate state tax developments relating to a specific industry, state(s), tax type and issue. You can make it as granular as you prefer. This allows you to reduce information overload, and only get the information you need to help your clients or company. This service is provided on a fixed-fee or subscription basis. Contact me at strahle@leveragesalt.com.