State and Local

Deftly Navigating an MTC Audit: Considerations for Taxpayers
Check out this stat: In the last three years, the MTC Audit Program has recommended state tax assessments in excess of $45 million annually

As recently recognized by Tax Analysts, the Multistate Tax Commission (MTC) has been gaining in prominence and, arguably, effectiveness.1 One of the MTC’s several activities is to administer audits on behalf of states. The MTC’s Joint Audit Program (Audit Program) is authorized by the Multistate Tax Compact and was initiated… Read more »

Life (and Litigation) After Wayfair
Did Wayfair establish South Dakota SB 106 as the new bright-line rule?

In the May/June 2018 edition of Tax Executive, TEI graciously published my article titled “Why Wayfair Won’t Matter.” Admittedly, the title was a bit deceiving, what millennials disparagingly refer to as “clickbait.” Contrary to the title’s suggestion, I did not argue that the palpable buzz around Wayfair was unwarranted. Instead,… Read more »

Looking Ahead: Predictions on Upcoming State Tax Legislation
Key drivers are state economy and gubernatorial election cycle

With the turn of the new year and a new decade, it is only natural to try to predict what state tax legislation may become law in 2020. Many factors can affect the nature and pace of state tax legislation, but perhaps the two leading drivers are the state economy… Read more »

Don’t Throw Out New Jersey Throwout Cases
Why? It’s really a national issue

The New Jersey throwout wins are more nationally relevant than ever, even though New Jersey repealed the throwout provision in its Corporation Business Tax Act nearly a decade ago. “Throwout” takes its name from the requirement that receipts be removed from (or “thrown out” of) a company’s sales factor denominator… Read more »

True, Correct, and Complete: On-time Filing of State and Local Tax Returns Without Clear, Consistent, or Practical Guidance
In a GILTI world, taxpayers need to make their way without a compass

While state and local tax is rife with uncertainty, the signature block of a state or local corporate income tax return is often deceptively simple and definitive. Typically, the signature certifies that the return is “true, correct, and complete.”1 From a practical standpoint, however, state and local corporate tax returns… Read more »

Nexus: Reports of Its Death Are Clearly Premature
Nexus must still be addressed before taxes can be imposed

In the wake of South Dakota v. Wayfair Inc.1 and the U.S. Supreme Court’s endorsement of economic nexus, a subject of wide discussion has been whether nexus issues are dead in the context of sales tax and corporate income tax. Two recent developments indicate that, while the framework for analyzing… Read more »

Technology and Automation: A Road Map for State and Local Tax Professionals
Challenges include spreadsheet-based calculations, manual tax software inputs and overrides, and cumbersome work papers

Tax functions today are under increased pressure to make processes more efficient and ensure proper compliance and reporting, while still taking time to analyze and synthesize growing volumes of raw data to provide more strategic insights. Predictably, the increased focus on analytics and strategic reporting drives the need for organizations… Read more »

Fair Is Fair—How to Assert For and Defend Against Alternative Apportionment
Alternative apportionment presents opportunities and challenges for taxpayers

The concept of apportionment in state taxation is an exception to the rule that life can be unfair. State apportionment must be fair. A wooden reading of a generally applicable apportionment law may not stand if that law yields an unfair result in a particular case. Alternative apportionment exists to… Read more »

Reforming SALT—Assessing the Impact of Tax Reform on States
Since each state has its own approach to corporate taxation, impacts are likely to vary

Unless you have very recently awakened from a lengthy hibernation (and if you have, we hope it was restful), you are no doubt familiar with the federal tax reform bill known as the Tax Cuts and Jobs Act (hereinafter called “federal tax reform”), the most comprehensive tax legislation passed since… Read more »

Nexus Is Crucial, Complex Connection for State Tax Professionals
After financial crisis, states enacted broader laws to increase revenues

Nexus is a wondrous word, replete with meanings. A quick search turns up all kinds of interesting uses. Nexus is a cell phone, it is a type of android from the movie Blade Runner, and it appears in the names of songs, bands, and albums. It is a superhero, the… Read more »

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