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.

State Tax Knowledge Update (59 items) - February 7, 2018

The following are state tax and business developments I have curated since January 6th, 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. Online Travel Company Liable for Maryland Sales Tax

2. Corporate Close-Up: The Texas Comptroller Ruled that Wireless Voice and Data Services are Performed in Texas when a Customer Accesses Those Services in Texas--Is It Market-Based Sourcing?

3. Many State Tax Incentives Are Now Taxable Due to Federal Tax Reform

4. California Proposes Bill to Counter Federal Limit on SALT Deduction

5. Remote Retailers Must Notify Online Purchasers of Louisiana Use Tax

6. Pennsylvania Requires Addback for Federal Bonus Depreciation

7. Fourth quarter 2017 state and local tax developments

8. State implications of federal tax reform - international business

9. Twenty-Five States Face Revenue Shortfalls in 2018

10. FEDERAL TAX REFORM AND THE STATES - great resource from the National Conference of State Legislatures

11. 2017 State Policy Review: Taxation

12. THE SKINNY ON THE 2017 MTC SALES TAX AMNESTY PROGRAM AND HOW IT AFFECTS AMAZON FBA SELLERS - this is an interesting video to watch (even now).

13. Top Tax Strategies for California Businesses in 2018

14. U.S. Supreme Court to Review Bid to Collect Internet Sales Tax

15. New Hampshire Department of Revenue Administration Announces Business Tax Rate Reductions

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

17. Ohio Department of Taxation Launches Amnesty Program that Runs through February 15 and Permits Potential Waiver of 100 Percent Penalties and 50 Percent Interest

18. Pennsylvania DOR Announces that Non-Participation Penalty Assessments from 2017 Amnesty Program are Coming Soon

19. Alabama DOR Issues Proposed Amended Rules on NOL Carryforwards, Federal Conformity, and Revised Filing Due Dates

20. Florida DOR Issues Administrative Rule Changes Reflecting 2017 Law on Return Filing and Payment Due Dates

21. US Supreme Court Denies Taxpayer Request to Review Florida Supreme Court Holding

22. Louisiana DOR Reminds that Certain Remote Retailers Must Issue Annual Information Notices and File Statements

23. Washington DOR Issues CPI-Adjusted Substantial Nexus Bright Line Nexus Thresholds for Business and Occupation Tax Purposes

24. Remote Businesses Might Become Subject to Hawaii Tax

25. New Jersey Enacts Corporate HQ Credit

26. Illinois Proposes Tax on Investment Management Service Businesses

27. Federal Tax Act Affects Minnesota Taxpayers

28. Illinois Responds to SALT Deduction Limit

29. Alaska Governor Seeks Support For Payroll Tax

30. Missouri Governor’s Plan for Tax Reform

31. Tax Law Prompts S Corps to Examine Their Structures: A Primer

32. Idaho State Tax Commission Discusses How Recently Enacted Federal Tax Reforms May Affect State Income Taxation

33. Michigan Court of Appeals Holds that Receipts from Law Firm Services are Sourced on a Market-Based Methodology for City of Detroit Income Tax Purposes

34. Colorado DOR Issues Updated Compliance Guidance on Some Remote Seller Notice and Reporting Requirements

35. Texas Comptroller Revises Administrative Rule 3.308 Computers – Hardware, Software, Services, and Sales

36. Washington DOR Issues Proposed Expedited Regulatory Amendments Reflecting 2017 Legislation that Expands B&O Economic Nexus

37. Multistate Tax Considerations of the Federal Tax Reform International Tax Provisions

38. What the Tax Cuts and Jobs Act Means for States – A Guide to Impacts and Options

39. Key Lessons for States as They Determine Responses to the Federal Tax Bill

40. 2018 Tax policy outlook

41. NYC Receipts Allocation Reflects Employees and Consultants

42. State Tax Conformity: Revenue Effects

43. Tax Reform Moves to the States: State Revenue Implications and Reform Opportunities Following Federal Tax Reform

44. January Tax Retrospective: Congress Acts, States React

45. Tax reform provides federal and state credits and incentives opportunities

46. New York releases FY 18-19 budget proposal

47. California Competes tax credit program - More than $55 million in tax credits available

48. You’re Invited: COST, Bloomberg Tax and McDermott Will & Emery to Host Post-Oral Argument Roundtable Discussion

49. Oregon DOR Issues Final Market-Based Sourcing Rule

50. Pennsylvania DOR Discusses New Law that Imposes Information Reporting and Notice Requirements on Some Remote Sellers Including Marketplace Facilitators

51. South Carolina: ALJ Denies DOR Motion for Injunction – Holds that Online Marketplace Provider is Not Required to Collect Tax on Third-Party Sales During Pendency of Case

52. Pennsylvania DOR Announces Immediate Effectiveness of 2017 Legislative Amendments Involving NOL Limitations

53. Montana DOR Discusses How Recently Enacted Federal Tax Reforms May Affect Some State Income Taxation

54. Minnesota DOR Discusses How Recently Enacted Federal Tax Reforms May Affect Some State Income Taxation

55. South Dakota Updates IRC Conformity Date

56. New Hampshire Joins Internet Sales Tax Fight

57. Ohio Amnesty Program Ends February 15

58. Oklahoma Governor Proposes Budget with Numerous Tax Changes

59. Tax Reform Friday: From Coast to Coast, Federal Tax Reform Involves State Taxation Policy

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.

Federal Tax Reform Causing State Tax 'Stranger Things'

Potential state tax policy / law changes in response to federal tax reform are starting to look ridiculous. Some proposing a new payroll tax instead of income tax. Creating a charitable contribution fund instead of paying property taxes. Changing the definition of taxable income, etc., etc., etc. Simplicity and conformity at its best (NOT).

Whether it is the individual income tax or corporate income tax, most states use federal taxable income as the starting point to calculate state taxable income. Each state either conforms as of a specific date, or they are a 'rolling conformity' state which means they automatically conform to federal changes. The way a 'rolling conformity' state does not conform to federal changes is by passing legislation to 'decouple' from the federal law. Examples of areas where states have 'decoupled' historically include federal bonus depreciation, and the domestic production deduction.

Each state will be making tough decisions during their legislative and budgeting sessions this year - what federal provisions to conform to and which ones to decouple from. Just like corporations should be doing, the states will be doing a lot of 'modeling' or 'what-if' calculations to determine the tax or revenue impact.

Buckle your seat-belt. It's going to be a bumpy ride.

State Tax Knowledge Update (41 items) - January 6, 2018

Happy New Year! 

I hope you are off to a great start (despite the extreme cold and snow many of you have been experiencing).  Be safe out there.

As we start the new year with federal tax reform finally enacted, we will begin to have to deal with the details, and how states will respond. This year's state legislative season should be very interesting. The District of Columbia and Pennsylvania have already provided some responses (see #30 and #32 below).

The following are state tax and business developments I have curated since December 12, 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. Income-producing activity of cable company is as licensee

2. Seattle Income Tax Ruled Invalid

3. Connecticut Fresh Start Program Has Begun

4. Florida DOR Issues Guidance on Voluntary Disclosure Program

5. Amended Alabama Rule Reflects New Law that Includes Loans and Credit Card Receivables in Property Factor for FIET Purposes

6. New California FTB Policy Prohibits Certain Ex Parte Communications Involving Alternative Apportionment Petition Hearings

7. Arkansas Taxpayers Reminded that New Law Taxes Specified Digital Products and Digital Codes Beginning January 1

8. Ohio Supreme Court Holds that Preparation of Company Gift Sets for Retailers Qualifies as Exempt Assembly Under Manufacturing Exemption

9. Washington DOR Issues Amended Business and Occupation Tax Rules on Financial Institution Apportionment to Conform with MTC Changes

10. Corporate Close-Up: New Jersey Court Rules That State Cannot Impose Corporate Business Tax on Foreign-Source Income Not Subject to United States Federal Income Tax

11. Tennessee DOR Subjects Cloud-Based Employee Scheduling Services to Sales and Use Tax

12. City of Chicago Department of Finance has changed the terms of its voluntary disclosure program

13. Trends in State Tax Policy, 2018

14. How States May React to Federal Tax Reform

15. Illinois updates the Revised Uniform Unclaimed Property Act

16. California Tax Update 2017

17. California Office of Tax Appeals Releases Final Draft Emergency Regulations on Rules for Tax Appeals

18. The 2018 National Multistate Tax Symposium

19. California OTA Issues Amended Proposed Emergency Regulations on Administration and Procedures of Appeals and Petitions for Rehearing

20. Indiana DOR Explains Success of its New Protest Review System

21. New Michigan Law Permits Alternate Method of Dispute Settlement/Resolution for Certain Tax Liabilities

22. Texas Comptroller Announces that Recently Enacted Tax Amnesty Program will Run from May 1 to June 29 Providing for Potential Waiver of Penalties and Interest

23. California FTB Updated New Policy Prohibits Certain Ex Parte Communications Involving Alternative Apportionment Petition Hearings

24. Massachusetts DOR Issues Proposed Regulations on Corporate Excise Tax Nexus

25. New Ohio Law Imposes Preferential Tax Rate on Certain Wages and Guaranteed Payments Paid by PEOs to Certain Owners of Pass-Through Entities

26. Texas Supreme Court Affirms Rejection of Taxpayer Use of Multistate Tax Compact Evenly-Weighted

27. CDTFA Discusses Expanded Partial Sales and Use Tax Exemption

28. Minnesota DOR Discusses New Law Imposing Collection and Remittance Responsibilities on Marketplace Providers

29. Ohio Trade Association Files Suit Challenging Validity and Enforcement of New Remote Seller Economic Nexus Law as Interpreted by Department of Taxation

30. PA Department of Revenue Bulletin: Federal 100 Percent Expensing Deduction Disallowed

31. Texas Supreme Court - Multistate Tax Compact three-factor election denied

32. District of Columbia Takes First Step to Decouple from Federal Tax Reform

33. State Strategies to Preserve SALT Deductions for High-Income Taxpayers: Will They Work?

34. State Tax Changes That Took Effect on January 1, 2018

35. Texas Tax Amnesty Begins May 1, 2018

36. Texas Supreme Court Denies Three-Factor Apportionment in Graphic Packaging

37. Federal tax reform and the states: Conformity is key

38. New York City small businesses to receive Commercial Rent Tax benefits

39. Indiana-based online participant revenue properly sourced out of state

40. Ohio Supreme Court affirms decision on employment service exemption

41. Pennsylvania provides guidance on the corporate NOL limitation

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.

How States May React to Federal Tax Reform

I hope you had a great Christmas, and are looking forward to 2018.

Last week, the President signed tax reform (H.R. 1) into law making the most dramatic overhaul to our federal tax code since 1986. I normally focus on state taxes, but I have been analyzing the federal tax reform changes for specific clients and doing some ghost-writing. 

Here I want to provide you with some predictions as to how the states may respond to some of the main business federal tax changes.

1. New federal tax law allows 100% expensing of short-lived capital investments, such as machinery and equipment (for 5 years) - applies to qualified property placed in service after 9/27/17 and before 2023. States will most likely NOT conform to this provision and require businesses to add-back the federal deduction.
2. New federal tax law raises Section 179 small business expensing cap to $1 million with a phaseout starting at $2.5 million. States will most likely NOT conform to this provision and require businesses to add-back the federal deduction.
3. New federal tax law eliminates net operating loss (NOL) carrybacks while providing indefinite net operating loss carryforwards, limited to 80 percent of taxable income. Most states don't use the federal NOL and compute their own state NOL, and thus, will most likely not conform to this change. However, there are a handful of states that use the federal NOL and do not compute a separate state NOL. These states will have to make a decision as to whether to conform to the federal changes. I think these states will most likely conform. (For more info on state NOLs, see my previous post)
4. Under the new federal tax law, research expenses are required to be amortized and the domestic production deduction (Sec. 199) was repealed. States will most likely conform to these changes.
5. The new federal tax law creates a new 20% deduction for pass-through entities. The calculation for this new deduction is extremely complex and has several limitations. States that are impacted negatively (i.e., obtain less tax revenue) by this deduction will most likely NOT conform. (Here is a link to an article by the Tax Foundation - Pass-Through Deduction Won’t Flow Through to Most States)

Those are the top 5 business tax changes (other than the tax rate changes and tax changes for foreign income) that I believe the states will address specifically. 

Have a Happy New Year and remember - you can't keep doing the same things and expect a different result! Change can be good. Start now.

State Tax Knowledge Update (34 items ) - December 12, 2017

I hope you are having a great holiday season and are remaining calm and enjoying it. I know it isn't easy. So many things going on this month and then trying to get work done, and the constant tax reform talk providing uncertainty. BUT it will calm down at some point. Just remember, life is too short to stress about things that don't really matter. The key is knowing what matters and what doesn't - that is true for both work and in life. As they say, "don't major in minors." 

The following are state tax and business developments I have curated since November 18, 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. Weekly Round-Up: News from MTC’s National Conference

2. A presentation on Residence and Domicile -Principles and Practice

3. Pennsylvania Issues Guidance on NOL Deduction

4. Connecticut to Implement App and “Cookie” Nexus

5. New York Denied Deduction for Rental Losses

6. Small-Business Owners Allege Tax Plan Bias

7. Taxes Intercept Millions From NFL Players’ Salaries

8. Corporate Close-Up: Utah Clarifies Definition of Foreign Operating Companies and Rules on Inclusion of Proceeds from Buy-Sell Agreements in Receipts Factor

9. California Competes tax credit program - $100 million in tax credits available

10. Pennsylvania - Refund limitation period starts when liability fully paid-in

11. Practice and Procedure: California Tax Appeals Office Races to the Finish Line on Finalizing Procedure Rules

12. New Jersey – No addback for worldwide income; treaty protections respected

13. Illinois Franchise Tax Relief on the Horizon

14. Massachusetts Denies Sales Factor COP Determination

15. Sale of Business Excluded From Sales Factor on California Return

16. Global Talks on Taxing Digital Economy a Worry for U.S.

17. Pennsylvania Supreme Court holds statute of limitations for corporate tax refunds is three years from the original due date of a return

18. Rhode Island's tax amnesty program begins December 1, 2017

19. State Income Tax Implications of Base Broadening Components of House and Senate Tax Reform Bills

20. 2017 Interim Report on State Taxation

21. California FTB Chief Counsel Ruling Addresses Whether Sales from Certain Business Divestures Can be Excluded from Sales Factor

22. California FTB Issues Proposed Regulations on How Credits are Allocated Among Members of Combined Reporting Group when Defective Election Occurs

23. New Connecticut Law Postpones Start of Claimant Period for Combined Reporting-Related ASC 740 Deduction

24. Virginia Department of Taxation Ruling Holds that Online Marketplace Operator is Not a Dealer for Sales Tax Collection and Remittance Purposes

25. New York Appellate Court Holds that Purchased Competitor Pricing Reports are Information Services that Qualify for Exclusion

26. Illinois - right to tax refund cannot be assigned to third-party lenders

27. Indiana Tax Court rules on sourcing of online educational service

28. KEEP WATCH ON MTC Use Tax Information Reporting Work Group

29. Rhode Island Division of Taxation Issues Guidance on Amnesty Program that Began December 1

30. California FTB Explains Application of Throwback Rule to Taxpayer Filing Certain Gross Receipts-Type and Franchise Tax Returns

31. Colorado Appellate Court Affirms that Domestic Subsidiary Holding Company Owning Stock in Foreign Entity is Not Required to be Included on Combined Return

32. Indiana Tax Court Rejects DOR Attempt to Source Receipts from Online Revenue Based on Location of Market

33. Washington Adopts Business and Occupation Tax Rule for Apportioning Financial Institution Income

34. Federal Courts Determine OTCs’ Service Fees not Subject to Hotel Occupancy Taxes - Horwood Marcus & Berk

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.