On November 2, 2010, the midterm elections featured several ballot initiatives dealing with state tax matters. In most instances, voters rejected initiatives to the extent that they would raise taxes, implicitly requesting that their governments look for alternative means to solve their states’ budget deficits.
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State & Local Tax (SALT)
Click-Through Nexus and Information-Reporting Requirements
Affiliate nexus principles enable states to assert jurisdiction over out-of-state retailers that would not otherwise be required to collect and remit sales tax due to their lack of a physical presence. Not surprisingly, given the current budget shortfalls most states are facing, they have become increasingly aggressive in asserting affiliate nexus.
California’s Move to Single Sales Factor
Beginning January 1, 2011, multistate businesses may elect to use a single sales factor method of apportionment for purposes of their California corporate income tax return.
California S.B. 974’s Impact on California Enterprise Zones
Opponents of California’s Enterprise Zone (EZ) tax credit program have recently attacked its effectiveness, seeking to eliminate the use of targeted employment areas and retroactive vouchering, along with other modifications that would phase out the EZ in favor of a tax incentive program that focuses on improving California’s workforce development for future jobs.
The Challenges of State Transfer Pricing
Recently many states have been taking aggressive steps and becoming more sophisticated in challenging intercompany pricing.
Income Apportionment and Allocation after Mead
In MeadWestvaco Corp. v. Illinois Dep’t of Revenue, the Supreme Court held that the operational function test was not intended to modify the unitary business principle by adding a new ground for apportionment.
State and Federal NOL Rules Differ in Key Respects
State net operating loss (NOL) rules generally differ from federal NOL rules, and state NOL rules often differ from one another. This lack of consistency can lead to confusion about a taxpayer’s ability to utilize NOLs.
State Tax Considerations of Passthrough Entities
This column highlights areas of concern regarding state taxation of passthrough entities, including entity classification, conformity to federal tax conduit treatment, and tax reporting obligations.
Current Corporate Income Tax Developments (Part II)
During 2009, numerous state statutes were added, deleted, or modified; court cases were decided; regulations were proposed, issued, and modified; and bulletins and rulings were issued, released, and withdrawn. This article covers some of the more important developments in apportionment, unitary groups/filing methods, administration, flowthrough entities, and other significant corporate state tax issues.
State Discretionary Authority and Alternative Apportionment
Every state taxing authority has some measure of discretion to determine a taxpayer’s income under alternative methods if the taxing authority believes the taxpayer’s income, as determined under the state’s tax code, does not fairly represent the extent of the taxpayer’s activity in the state. Several recent cases highlight this trend.
Current Corporate Income Tax Developments (Part I)
During 2009, there were many changes in the area of state corporate income taxation. This article focuses on some of the more interesting items in the areas of nexus, tax base, allocable/apportionable income, and Sec. 338(h)(10) transactions.
The Recent Growth of Mandatory Unitary Combined Reporting
The use of mandatory unitary combined reporting has become increasingly popular among states in recent years, driven by state budgetary shortfalls and the perceived distortion of taxable income by multistate corporations filing separate company reports.
A Practitioner’s Guide to theTaxation of Telecommuting
This article discusses how state and local tax laws affect telecommuting and what the federal and state governments can do to prevent taxes from having a negative effect on the growth of the telecommuting movement.
An Overview of Major Property Tax Relief Measures
Every state employs some form of property tax relief program for the purpose of reducing the local property tax bill for taxpayers. A property tax relief program modifies the basic property tax model in an attempt to produce a smaller tax bill for at least some taxpayers. A relief program can target specific types of property or specific types of individuals for tax relief, or it may have a broad application.
Ohio’s CAT Upheld
The Supreme Court of Ohio has ruled that the state’s commercial activity tax (CAT) does not violate the Ohio constitution’s prohibition of excise or sales taxes upon food sales and purchases.
All Aboard: The Impact of the New York State MTA Payroll Tax on Alternative Investment Fund Managers
Assembly Bill A08180, establishing the Metropolitan Commuter Transportation Mobility Tax. The bill imposes a new tax on employers and self-employed individuals engaging in business within the 12 counties of the Metropolitan Commuter Transportation District.
Travel Sites Held to Owe Millions in Transaction Taxes to Various Jurisdictions
Online travel companies could be forced to pay millions in uncollected taxes, penalties, and interest under recent state court rulings in Georgia and California, with other jurisdictions to possibly follow.
New York Eliminates Temporary Stay Residency Exception
New York is very aggressive in making sure that those who work or live in the state pay their fair share of taxes. Because falling under the definition of a New York resident can be very expensive, it is extremely important to understand the rules.
Drop Shipments and Flash Title: Establishing Sales Tax Nexus in Complex Commercial Transactions
This column discusses substantial and attributional nexus and examines how nexus is asserted for sales and use tax purposes in drop shipment and flash title transactions.
Tax Amnesty Programs and Voluntary Compliance Initiatives: A Way to Mitigate Declining State Revenues
Since 2000, more than half of the states have offered tax amnesty programs one or more times.
PRACTICE MANAGEMENT
2026 tax software survey
CPAs rate their return preparation software’s performance during this year’s tax season.
