TEI’s State and Local Tax (SALT) Committee has held several liaison meetings with state revenue departments and intergovernmental tax agencies over the past six months. These meetings have provided TEI members the opportunity to begin a dialogue with state tax administrators and discuss issues of concern to TEI members, including the Committee’s recently issued policy statements on state tax administration.
The SALT Committee held its first liaison meeting with the Board of Trustees of the Federation of Tax Administrators (FTA) in November 2015. The FTA’s board includes twenty commissioners of revenue for various states. The FTA meeting focused on TEI’s “Reporting Federal Income Tax Changes” and “Audit Procedures” (see the May/June 2016 issue of Tax Executive for copies of these statements). TEI discussed the need to standardize the timing, triggers, and format for reporting federal revenue changes to state governments and proposed best practices for audit procedures.
South Carolina DOR Responds
Following the FTA liaison meeting, Rick Reames, the director of South Carolina’s Department of Revenue, contacted the SALT Committee. Director Reames informed TEI that South Carolina was changing its information systems and that, following the change, South Carolina will allow taxpayers to report federal changes using a spreadsheet similar to the one TEI presented at the FTA liaison meeting. Director Reames noted that the streamlined report provided benefits to the state and taxpayers alike.
Illinois DOR to Discuss TEI Policy Statement
The SALT Committee also met with Connie Beard, the director of the Illinois Department of Revenue, in April. TEI shared its “Reporting Federal Income Tax Changes” policy statement with Director Beard and discussed the benefits of filing a streamlined report. Director Beard appreciated the difficulties taxpayers face when reporting federal changes to state governments and agreed to discuss TEI’s proposed reporting format with members of her staff, including whether changes must be reported when the federal change is only partially agreed to.
SALT Committee Meets With the MTC
Most recently, the SALT Committee discussed both policy statements at the Multistate Tax Commission’s (MTC) Executive Committee meeting in May. TEI noted that the MTC adopted a model statute for reporting federal changes in 2003. However, few states have adopted that model, and the model does not permit filing shortened reports. TEI and the MTC discussed limitations on state information systems that could affect the reporting of federal changes for many of the states. TEI offered to identify specific areas of the model statute on federal reporting that could be clarified to better facilitate timely taxpayer compliance.
TEI’s SALT Committee Chair, Jamie Fenwick; Committee Vice Chair, Marji Gordon-Brown; Committee members Cathleen Stevens and Rick O’Connor; and TEI Tax Counsel, Pilar Mata, have participated in the various liaison meetings.