Are You "Looking Too Closely"?

When I work, I like to listen to a song called, "Looking Too Closely" by Fink. I originally heard the song in a "Suits" episode (which is my favorite show). This morning, as I sat in front of my computer reading all of the articles on federal tax reform for a client, analyzing state IRC. 382 NOL limitations and calculations, I thought about the words to this song and how they relate to state taxes. 

Sometimes you have to look closely at the facts, the law and do deep analysis to help clients and find answers that are beyond the surface. Other times, after going deep, you need to come back out of the hole you dug, and see the issue and situation from the bigger picture. Perhaps the answer is easier to see, and most likely easier to explain with a broader view. "Looking closely" may be required to fully understand the issue and flush out the parameters of a solution, but sometimes "looking too closely" can be what's keeping you from finding or explaining real solutions. Step back. Keep it simple.

"Do for one, what you wish you could do for everyone"

I published a state tax update yesterday, but to be honest - I didn't feel like it. The events in Las Vegas have made me feel 'heavy.' I felt it all day yesterday and again today. Can't shake it. It really puts everything in perspective. Makes you want to stop complaining. Take risks. Go for your dreams. Stop worrying about things that don't matter. Hug those you love hard. Life is short. Life is valuable. We must spread love and hope to everyone we meet. We must do for one, what we wish we could do for everyone. We must not live in fear, but live fearlessly. None of us know when our time is up, so let's make the best use of our time. 

Note: I got the quote, "do for one, what you wish you could do for everyone," from Andy Stanley.

9/11 & Hurricanes - Hold Onto What Matters

Good morning. 9/11. Hurricanes. Monday. The news is uplifting and encouraging (NOT!). I was going to write about state taxes like I always do, but I couldn't do it today. Too many more important things to talk about, to think about, to discuss.

Tragedies unfortunately are a part of life. Wish they weren't. But like they say, we can't choose what happens to us, we can only choose how we respond. Life is what we make it, or how we remake it. We always have to turn lemons into lemonade. Find the good in the bad. 

Well, if we are trying to find the good in the bad from the hurricanes, it could be that it should force us to work together. To not argue about petty stuff. To find commonality. To respect the human in all of us. To realize what is really important in life. Not things, but people. Not money, but people. 

The other thing it should teach us is what to hold onto and what to let go of. All of our material possessions are things that are temporary. They could go at any moment. They are things that can give us joy, give us pleasure, and help us accomplish objectives. But they are replaceable. People - friends, family and pets. They are what is important. 

So today, I just want to say - regardless of where you are, if you are in the middle of the storm, or simply watching it from afar - I hope you pause to focus today on the things that matter. I hope you give those you love a little extra attention today (and every day). Don't lose focus. Let's not lose ourselves and the things that are irreplaceable while pursuing what is.

What Type of Evidence Do You Need?

If you are not a lawyer and you work in the state tax field, over time, after reading court case after court case, you begin to learn what different legal terms mean. If you have read any articles or statutes and regulations regarding the burden of proof taxpayers or departments of revenue must meet when proposing alternative apportionment, you have probably read the terms:

• Preponderance of Evidence
• Clear and Convincing (or Cogent) Evidence

But what do these terms mean?

Preponderance of Evidence

The preponderance of evidence standard is met if the proposition is more likely to be true than not true. Effectively, the standard is satisfied if there is greater than 50 percent chance that the proposition is true.

For example, in Mississippi, starting January 1, 2015, the commissioner may require a taxable corporation that is affiliated with one or more corporations that are not taxable to file a combined return with the affiliated corporation or corporations if he establishes by preponderance of the evidence that the intercompany transactions of the taxable corporation have resulted in the shifting of taxable income from itself to another member or members of its affiliated group not subject to tax. The commissioner may also require a taxable group of affiliated corporations to file a combined return if he establishes by preponderance of the evidence that the intercompany transactions of the corporations have resulted in the shifting of taxable income between members of the affiliated group (Miss Code Ann Sec. 27-7-37(2)(a)(ii)).

Clear and Convincing Evidence

Clear and convincing evidence is a higher level of burden of persuasion than "preponderance of the evidence."

Clear and convincing proof means that the evidence presented by a party during the trial must be highly and substantially more probable to be true than not and the trier of fact must have a firm belief or conviction in its factuality. In this standard, a greater degree of believability must be met than the common standard of proof in civil actions, which only requires that the facts as a threshold be more likely than not to prove the issue for which they are asserted.

This standard is also known as "clear, convincing, and satisfactory evidence"; "clear, cognizant, and convincing evidence"; and "clear, unequivocal, satisfactory, and convincing evidence"; and is applied in cases or situations involving an equitable remedy or where a presumptive civil liberty interest exists.

For your reference, the following is a sample list of cases that have discussed the level of evidence necessary to meet the burden of proof:

1. Equifax, Inc. v. Mississippi Dep’t of Revenue, No. 2010-CT-01857-SCT (Miss. 2013) 
2. CarMax Auto Superstores West Coast, Inc. v. South Carolina Department of Revenue, Docket No. 4953 (S.C. Ct. App. 2012) 
3. Microsoft v. Franchise Tax Board, 139 P.3d 1169 (Cal. 2006)
4. British Land (Maryland) Inc. v. N.Y. Tax App. Trib., 85 N.Y.2d 139, 147-48 (N.Y. Ct. App. 1995)

Note: the definitions above were obtained from "legal burden of proof" - Wikipedia. Other sources provide similar definitions.

30 State Tax & Business Developments You May Want to Know - August 26, 2017

The following are state tax and business developments I have curated since August 21st, and posted in the LEVERAGE SALT LinkedIn group:

1. KPMG TWIST Podcasts for week of August 21, 2017

2. Texas Amnesty Program Beginning September 1, 2017

3. Texas: Time to file a petition or request a hearing extended starting September 1, 2017

4. Texas Involvement in MTC Online Marketplace Seller VDI

5. The Impact of New Use Tax Reporting Laws for the Future of State and Local Taxes

6. Can You Pay Me Now? Verizon Refunding Taxes in New York

7. States Should Adopt a Version of Colorado’s Remote Sales Tax Law

8. The Many Reasons for the Seattle Income Tax

9. Budget and Tax Center: Costly Tax Cuts in New State Budget Continue Precarious Road Ahead for North Carolina

10. Expect the Unexpected: Nuances of Unclaimed Property Oil and Gas Reporting

11. Ohio enacts several economic development changes

12. State Rundown 8/23: Few Lingering Budget Debates Cannot Linger Much Longer

13. Illinois Proposes Trade-Show Sales Tax Nexus Law

14. Illinois amended regulations provide market-based sourcing guidance and other changes

15. Virginia Circuit Court Rules BPOL Tax in Violation of Import-Export Clause

16. MultiState's Local Policy Digest explores the top legislative developments from municipalities across the U.S.

17. Oklahoma Tax Commission Reminds that Amnesty Program Begins September 1

18. New Texas Law Requires Comptroller to Establish a Tax Amnesty Program Providing for Waiver of penalty or interest, or both

19. Illinois Department of Revenue Publishes Amended Apportionment Rules

20. A Closer Look at New York Draft Proposed Regulations under Article 9-A Business Corporation Franchise Tax Under Subpart 3-9

21. Software Company Royalties Received from Out-of-State OEMs Are Excluded from Sales Factor Numerator in Wisconsin

22. BLOOMBERG BNA Q&A WITH ALSTON & BIRD’S ZACH GLADNEY: PASS-THROUGH ENTITIES NEXT IN LINE FOR NEXUS ISSUES

23. SALES TAX SLICE: 5 THINGS AMAZON FULFILLMENT SELLERS SHOULD KNOW ABOUT THE MTC’S NEW VOLUNTARY DISCLOSURE INITIATIVE

24. CORPORATE CLOSE-UP: OREGON FOLLOWS MTC IN ADOPTING MARKET-BASED SOURCING AND APPORTIONABLE INCOME DEFINITION

25. SALES TAX SLICE: ‘INTERNET TAXES’ EXPLAINED

26. 2017 mid-year sales tax changes

27. The 3 secrets for managing your Amazon inventory

28. The FBA sales tax amnesty program explained

29. The importance of learning what does NOT need to be done, and other things.

30. Don’t Be Lazy: The Billable Hour Has Survived For A Reason Probably the biggest mistake most new lawyers make is that they don’t put in the work.

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 LS 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.

CALLING ALL STATE TAX PROS: Share Your Thoughts Anonymously

State tax professionals are generally reluctant to share thoughts, ideas, opinions or question state tax policy publicly on the Internet or in LinkedIn groups. Consequently, the leverage salt blog provides the state tax profession with an independent and real voice. 

State tax professionals may contact LS with their thoughts and viewpoints to be shared anonymously on the blog. This allows tax professionals to ask questions or invoke conversation around an issue without having to put themselves, their firm or corporation in the public domain. 

The leverage salt blog has been published since 2009 and contains 900+ posts.

You may send your thoughts to Brian at strahle@leveragesalt.com.