Latest COST Conscious

ISSUE 19-07; April 5, 2019

Benchmarking: Electronic Signatures – How Does Your Company Handle Signatures in a Paperless World? More companies are going digital and discouraging the accumulation of paper traditionally associated with tax preparation, and many states are encouraging electronic filing. But going digital does not mean you can forgo the signature. Which answer best describes how your company handles signatures o

Latest Practitioner Connection

ISSUE 19-08; April 12, 2019

Should States Embrace GILTI? – Congress inserted several provisions into the Tax Cuts and Jobs Act, arguably intended to address corporate arrangements when federal taxable income on which the states rely is disconnected from profitability, perhaps most significantly a tax on global intangible low-taxed income. In this installment of Board Briefs, the author asked State Tax Notes board members to


NFL’s Carolina Panthers Say Stadium Overvalued by Almost $500M


The NFL’s Carolina Panthers think county assessors are way off in their valuation of its stadium in Charlotte, N.C.

Colorado Nears $1B in Pot Revenue Since Retail Sales Began


Sales of recreational and medical marijuana generated about $266.5 million in tax, license, and fee revenue in Colorado in 2018, with the state now approaching $1 billion in revenue since legal recreational pot sales began in 2014.

States Approving Legal Marijuana Must Avoid Tax Revenue Potholes


Michigan and Missouri are the latest states that will collect tax on marijuana sales, but legalization may not be a sure-fire path to revenue.

MGM, NHL Strike Data Deal With Possible State Gambling Law Impact


The casino industry is cheering the second professional sports data deal signed by MGM Resorts International as proof that states shouldn’t force casinos to pay “integrity fees” or buy league data as sports betting legislation sweeps across the country.

Mega Millions Winner Faces Massive Tax Bill


The winner of last night’s Mega Millions jackpot just became an instant billionaire. Well, before taxes.

State of Wayfair: California Targets Early 2019 for Collections


California’s tax department is leaning toward following South Dakota’s law in a forthcoming notice directing online retailers to begin collecting and remitting sales tax on out-of-state sales as soon as next year.

Ohio Tax Lawsuit Keeps Major League Soccer Team in Columbus


Heavy pressure from the Ohio Attorney General enforcing a unique state tax law kept a Major League Soccer team from moving to Austin, Texas, despite the owner’s wishes.

No Online Sales Tax Collection Until States Simplify: E-Retailers


Membership in an agreement designed to make it easier for companies to remit sales and use taxes to other states should be a pre-condition of states’ ability to require the collection of such taxes, representatives of the e-commerce industry said.

Taxation of Amazon-Like Marketplaces Tricky for States


A Multistate Tax Commission work group examining state marketplace facilitator laws in the wake of the groundbreaking Wayfair decision homed in on a difficult conflict in such laws.

Sports Betting Bill Debuts in Nation’s Capital


The nation’s capital could become the next jurisdiction to legalize sports betting.

New Federal Remote Sales Tax Bill Would Delay State Collections


Congress isn’t giving up on trying to regulate online sales tax collections.

How Vulnerable Is Your State to Post-'Wayfair’ Lawsuits?


In a post-Wayfair world, a state that disobeys the recommendations of U.S. Supreme Court Justice Anthony Kennedy could find itself in the crosshairs of future litigation, according to several state tax lawyers.

‘Dark-Store’ Tax Challenges From Big-Box Stores Rise in Wisconsin


Property tax appeals by big-box retailers like Target and Kohl’s featuring the “dark-store loophole” are ramping up across Wisconsin, a survey of municipal assessment officials revealed.

Leaving New York to Get Tax Relief? Prepare to Be Audited


Wealthy New Yorkers who plan to flee to more tax-friendly states like Florida should expect to be audited, tax practitioners told Bloomberg Tax.

State Tax Bogeyman Real or Overhyped After Online Tax Ruling?


Collection deadlines are too soon. States are coming for back taxes. Congress should still intervene.

Oct. 1 Online Sales Tax Deadline Unrealistic: E-Commerce Rep


States should simplify and be reasonable in changing online sales tax requirements after a pivotal U.S. Supreme Court victory. Otherwise, they risk congressional intervention, an e-commerce industry representative told Bloomberg Tax.

Foreign Sellers Likely Safe From State Online Tax Frenzy Post-Wayfair


Serious repercussions to international commerce are possible, but unlikely from the recent U.S. Supreme Court ruling that eased the ability of states to tax online sales, state tax lawyers told...

After ‘Wayfair’, Which States Are Ready to Tax Online Purchases? (1)


The dust is beginning to settle after the U.S. Supreme Court threw out a major obstacle to states’ ability to tax online sales.

Online Sales Tax Rule Dead, But Afterlife Murky (2)


“The Internet revolution has made Quill’s original error all the more egregious and harmful.” These are the words the U.S. Supreme Court used today in rejecting its 26-year-old standard that barred states from collecting sales tax from out-of-state vendors.

Are High Court Tax Precedents Set in Stone After 25 Years?


The U.S. Supreme Court is dealing with a monumental online sales tax case based on a decades-old precedent. Does this standard’s tenure make it more difficult to reverse?

Has Latest New York ‘Tax Flight’ Begun?


The “tax flight” that New York feared would result from the new federal tax law may have begun.

Business Taxpayers Look for Guidance From States, IRS


Practitioners representing businesses are urging states to help their clients with guidance on the increasing complexities resulting from federal tax law changes.

Amazon Not Happy with Seattle’s New Compromise Head Tax


Seattle’s City Council unanimously passed an employee head count tax it revised to placate the business community and hometown company Inc.

Sen. Enzi Sees Strong Pressure on Congress If ‘Quill’ Upheld


Sen. Michael B. Enzi (R-Wyo.) said he believes there will be an unprecedented amount of pressure on Congress if the U.S. Supreme Court maintains a law banning states from levying sales tax collection...

Wayfair Case Not ‘Slam-Dunk’ States Hoped For: Tax Group Official


The pending digital sales tax case before the U.S. Supreme Court may turn out to be an example of being careful what you hope for, a Multistate Tax Commission attorney said.

Digital Tax Arguments Focus on Role of Congress, Compliance Costs


U.S. Supreme Court Justices focused on the role of Congress and real compliance burdens for small businesses during oral arguments in a case concerning the constitutionality of digital...

Multistate Tax Amnesty Program Revenue to Surpass $50 Million


The Multistate Tax Commission’s Online Voluntary Disclosure Program is estimated to bring in an additional $51.1 million in annual sales and use tax revenue to participating states, according to a...

Senator Ted Cruz Leaps Into Digital Sales Tax Fray


A U.S. Supreme Court decision overturning its 26-year-old rule restricting states’ taxing authority over out-of-state sellers would “thwart ongoing congressional efforts to find a workable solution...

No Grounds for High Court to Undo Sales Tax Rule: E-Retailers


The U.S. Supreme Court shouldn’t upend a 26-year-old restriction on states’ taxing authority over remote retailers because state sales tax systems “remain inordinately complex and burdensome during...

Backers of Federal Digital Tax Provision Come Up Empty-Handed


It appears a digital sales tax provision will be absent from an omnibus spending bill despite a push from lawmakers to enact legislation before a pivotal U.S. online tax ruling can be handed down in...

Amazon Sellers Armed With New Tax Compliance Information


A tax software company will offer a new tool to assist Fulfillment by Amazon sellers with remote sales tax compliance.

State Taxes Could Save Executives’ Performance Pay


States could help preserve an approach to executive compensation popular with corporate shareholders after the new federal tax law eliminated its deductibility.

Court or Congress? State Online Sales Tax Power Set for Change


South Dakota’s latest filing with the U.S. Supreme Court reiterated the state’s call for the justices to annul a much-maligned constraint on states’ taxing authority over online retailers.

High Court Digital Tax Ruling Could Spur More Amazon-Based Laws


The future of marketplace-provider laws requiring Amazon-type platforms to collect tax on its third-party sales hinges on a monumental U.S. Supreme Court case, according to tax professionals.

Duke, FirstEnergy Fight Rate Reductions From Federal Tax Savings


Duke Energy Corp., American Electric Power Co. Inc., FirstEnergy Corp., and the Dayton Power and Light Co. are putting up a legal fight to rate reductions based on their decreased tax liabilities...

New Alabama Tax Break Tops Off $700M Toyota-Mazda Incentives


Alabama created another local property tax break for economic development as Gov. Kay Ivey (R) signed legislation Feb. 6 to help secure a recently announced Toyota/Mazda manufacturing plant.

States in Pickle Over Deductions for Federal Taxes


Six states that provide a deduction for federal taxes will look for ways to reduce an increased burden on taxpayers or to spend the extra loot stemming from the new federal tax law.

States Eager to Act Must Wait for Model Law on Partnership Audits


Most states seeking to address the new federal partnership audit regime are in a holding pattern as they look for a model statute to provide guidance.

Amazon’s HQ2 Finalists Bait With Tax Breaks


Twenty cities across the U.S. and Canada remain contenders in the largest corporate jobs contest in modern times after an Amazon announcement cleared more than 200 cities from the list of potential sites for its second headquarters.

Lawmakers Push IRS to Allow Prepaid 2018 Property Taxes


State residents who rushed to prepay their 2018 property taxes before the end of the year deserve a deduction from the federal government, New York and New Jersey lawmakers told the IRS Jan. 9.

Lawsuits, New Charities? States Eye Ways Around Federal Tax Law


Several states are already pushing plans to mitigate the negative impact taxpayers may feel from the federal tax law’s new limit on the deductibility of state and local taxes on federal returns.

Wayfair, Overstock Urge High Court to Deny Digital Tax Case


South Dakota has “manufactured an entirely inappropriate vehicle” for the U.S. Supreme Court to reconsider its 25-year-old decision restricting states’ ability to tax remote retailers, according to...

Expedia Wins Lodging Tax Dispute With Illinois Towns


Online travel companies (OTCs) won a major victory against Illinois municipalities seeking millions of dollars in unpaid lodging taxes after a federal appeals court found their local ordinances...

Will Goodlatte’s Retirement Lead to Federal Digital Tax Solution?


It’s not certain that Rep. Bob Goodlatte’s (R-Va.) retirement will open the door to long-awaited federal legislation addressing states’ taxing authority over remote retailers.

Will Multiple Briefs Sway Supreme Court to Take Digital Tax Case?


The U.S. Supreme Court has dozens of state attorneys general and interest groups knocking on its door to take up the issue of states’ taxing authority over remote retailers.

House GOP Tax Plan Draws Protests Over State Impact


Federal lawmakers and groups representing state and local governments are pushing back against a key deduction contained in the House Republican tax reform plan released Nov. 2.

Wave of Amazon HQ2 Bids Unlike Anything Experts Have Seen


Is the nationwide tidal wave of proposals for Amazon’s second headquarters an unprecedented incentive bonanza, a game-changer, or a PR-stunt precipitating a dozen more PR stunts?

Reworking Intercompany Loan Rules a Mixed Blessing for States


Treasury Department recommendations to simplify Obama-administration documentation requirements on intercompany lending may be good news and bad news for states deciding whether to conform.

First Digital Sales Tax Dispute Reaches U.S. Supreme Court


South Dakota’s Attorney General has filed the first of an expected wave of state petitions asking the U.S. Supreme Court to reconsider a 25-year-old opinion restricting states’ ability to tax remote retailers.

State Groups Vow Fight for Tax Deduction Despite Trump, Big Six


Groups representing state and local officials will lobby hard to persuade members of Congress not to go along with calls from President Donald Trump and GOP leaders to end the federal deduction for...

States Won’t Sweat Conformity to Retroactive Tax Reform


States that want to follow retroactive provisions of whatever tax reform package comes from Congress this year probably wouldn’t worry about legal challenges.

Federal Partnership Rules May Be Tricky for States: ABA Group


State and local governments may find themselves in a pickle when a new federal partnership audit regime goes into effect, according to a Sept. 11 letter addressed to Internal Revenue Service...

First U.S. Prosecution Over ‘Zapper’ Software Nets Guilty Plea


A Seattle-area restaurant owner accused of using software to hide receipts and steal sales tax revenue pleaded guilty Aug. 30 in the first such prosecution in the U.S., the Washington Attorney...

IRS Asked to Help States by Clarifying Partnership Audit Regime


An influential tax group is asking the IRS to clarify how proposed regulations will implement certain aspects of the new federal partnership audit regime.

Michigan’s Value-Added Tax: A Cautionary Tale for Feds, States


The U.S. has been among a small number of developed countries for most of the last century in resisting an academically revered economic policy—the value-added tax. Michigan’s failed VAT may help...

‘Looking at You, Kid': Tax Credits for Movies, TV in Focus


The stiff competition among states to lure the multibillion-dollar film and television industry with lucrative tax credits may be going through a Darwinian period where only the strongest survive.

State Deduction Needed for Tax Reform After Health Care Failure


Republicans’ failure to repeal the taxes underlying the Affordable Care Act makes eliminating the deduction for state and local taxes even more important to their tax reform plans.

Federal Tax Reform Driving States to Digital Sales Taxes


Federal lawmakers’ efforts to control states’ taxing authority over remote retailers is adding pressure as potential federal tax reform threatens to further deplete states’ coffers.

Federal Bills Fighting to Modernize Interstate Taxes


A House-passed bill standardizing rules for taxing nonresident workers will face stiff opposition from large states that stand to lose millions in revenue, an original co-sponsor of the Senate...

Businesses Face a Patchwork of Trade Show Tax Rules


Businesses that use trade shows to promote and sell their products would be well-advised to research the hosting state’s nexus rules if they hope to avoid long-term sales and use tax duties in that jurisdiction, tax practitioners told Bloomberg BNA.

Prolific Tax Whistle-Blower Must Rethink Strategy


A Chicago lawyer regarded as the most prolific tax whistle-blower in the U.S. will have to reconsider his relentless litigation strategy in light of a state appeals court finding him ineligible for...

IRS Releases Proposed Partnership Audit Rules After Delay


The IRS proposed rules to implement the new partnership audit regime after a regulatory freeze delayed release of the guidance for five months.

Parties Unveil Model State Statute for Partnership Audit Law


Practitioners have rolled out draft model legislation that many hope will serve as the starting point for uniform state statutes addressing the new federal partnership audit regime.

States No Longer Fretting Over Federal Tax Reform This Year


The pressure to go into special session or take immediate action this year in response to federal tax reform no longer exists for state lawmakers and governors

Gray Areas in State Tax Policies: Bloomberg BNA Survey


Lawmakers’ strategy to strike a decades-old, state-border restriction on taxing sales may prove fruitful before the U.S. Supreme Court, according to a leading state and local tax practitioner.

States Eye New York Whistle-Blower Law as Tax Fraud Tool


State lawmakers and tax administrators are taking a closer look at enacting whistle-blower statutes as a strategy for prosecuting big-ticket incidents of tax fraud and scooping revenue into state coffers.

Tax Reform Would Send States Back to ‘Drawing Board’


Most modifications materializing from a potential federal tax reform package would throw states’ personal and corporate income tax structures up in the air, according to a leading tax professional.

States to Battle White House for Tax Deduction, Muni Exemption


States and cities are fighting to preserve a deduction for taxes paid to local governments after the White House’s tax plan said it would jettison the popular tool.

States, Tax Groups Furiously Planning for Partnership Audit Law


States and taxpayers aren’t waiting for a fix to the new federal partnership audit regime as they wade further into it to assess how the law will shape state tax systems.

Carried-Interest Bill Gets Attention in Connecticut


A subcommittee in the Connecticut Legislature heard testimony April 11 from the group called Patriotic Millionaires on a bill that would end the carried-interest tax advantage that benefits...

Digital Sales Tax: Hit and Miss in States


States’ collective agenda to rope in lost revenue from remote sales has yielded mixed results so far in 2017.

Most States Sick Over GOP Health Bill, Impact on Budgets


Rick Noonan said he wanted to cry when he heard the American Health Care Act was getting closer to becoming law.

Rise of Machines to Spark Rise of San Francisco Taxes?


Whether San Francisco should adopt an automation tax to replace taxes lost to automated jobs is the subject of a hearing proposed by a supervisor backing CEO pay surcharges.

Online Sales Tax Marching Toward South Dakota High Court


The South Dakota Supreme Court could soon take up the state’s online sales tax that a lower court ruled unconstitutional.

End of An Era: State Tax Legend Paul Frankel Dies


A light has gone out in the state and local tax world with the passing of one of its most preeminent and beloved practitioners.

Kansas Passthrough Exemption on Life Support


A controversial income tax break came back from the dead in the Kansas Legislature Feb. 22, but it appears to have little chance of ultimately surviving the current legislative session.

Business Tax Burdens Possibly on States’ Chopping Block


State efforts to carve out business personal property from taxation are gaining steam amid continuing calls for states to remove business inputs from the sales tax base.

Import-Export Tax Idea Presents State Constitutional Pitfalls


States could run afoul of the Constitution by following a federal border-adjustments plan advocated by House Speaker Paul Ryan (R-Wisc.) to tax imports and exempt exports.

Trump’s High Court Pick May Shadow Scalia in State Tax Cases


Justice Antonin Scalia’s potential successor may be cut from a similar judicial cloth—but it remains to be seen how the Supreme Court nominee could shape state tax issues.

“High” Taxes—States Continue to Look to Marijuana to Generate Revenue


As Colorado and Washington continue to experiment with legalized marijuana, state lawmakers’ attention has turned to preserving the new revenues and tweaking tax provisions. Meanwhile, at least nine...

Taxation of LPs and LLCs: Variances Among States Pose Traps for the Unwary


Two of the most popular business structures for small business owners are limited liability companies (LLCs) and limited partnerships (LPs). These business entities offer a host of practical...

Corporate Close-Up: Five Things to Watch for in State Corporate Income Taxes in 2017


In Chinese astrology, 2016 is the year of the monkey, a symbol of mobility and action, apt for a year setting the stage for potentially massive tax overhauls. The coming year will be symbolized by...

Three Prominent State and Local Tax Practitioners' Outlook on What's Ahead in 2017


Bloomberg BNA recently asked three prominent state and local tax thought leaders about changes they see on the horizon for 2017. Below are the responses from EY's Joe Huddleston, KPMG's Harley Duncan...

Alabama to Push Online Tax Bill After High Court Clears Way


Alabama’s tax commissioner said she will ask the state Legislature to consider a Colorado-style reporting and notice requirement for out-of-state retailers that don’t collect and remit the state’s...

Comcast Scores Partial Win in California Tax Dispute


A California appellate court panel affirmed a trial court ruling that was a partial win for both Comcast and the Franchise Tax Board in a dispute about Comcast’s unitary ties with another company and...

Tax Notes

Lowe’s Entitled to Washington Bad Debt Deductions, COST Says


Home improvement retailer Lowe's is allowed sales tax credits and business and occupation tax deductions for bad debts from defaulted store credit card accounts, the Council On State Taxation has argued to the Washington Supreme Court.

New Jersey Economic Development Authority Board Chair Resigns


The chair of the board of the New Jersey Economic Development Authority has resigned amid scrutiny of the board’s management and oversight of the state’s tax incentive programs.

Colorado Seeks Software for Sales Tax Simplification


Under recently passed legislation, Colorado will seek bids for software to simplify its complicated sales and use tax system.

Pennsylvania House Passes Bill Eliminating Estate Tax on Minors


The Pennsylvania House has approved legislation to eliminate the inheritance tax for children 21 years old or younger.

Gov. Brown Signs Bill Reducing Oregonians' 2020 Tax Rebate


Oregon’s governor has approved a controversial bill that reduces the size of a pending 2020 tax rebate for taxpayers.

Missouri’s Fix for Withholding Woes Stalls in House on Tax Day


Missouri legislation barring penalties on late income tax payments stemming from alleged errors in withholding tables has become bogged down in the House of Representatives.

Massachusetts Millionaire’s Tax Proposal Gains Support


A Massachusetts millionaire’s tax proposal resurrected by two state lawmakers received overwhelming support at a recent public hearing, according to copies of written testimonies obtained by Tax Notes.

California Bill Would Increase Corporate Tax Based on Pay Inequality


A California bill would increase taxes on large corporations based on the wage disparity between executives and employees.

New Jersey Allows 163(j) Deduction at Partnership Level


New Jersey will allow partnerships to deduct disallowed interest under IRC section 163(j) and add back the carried forward amount, under new guidance issued by the state Division of Taxation.

Massachusetts Conforming to TCJA’s Overall Method of Accounting


The Massachusetts Department of Revenue is seeking input from businesses and tax practitioners on its proposed conformity to the 2017 federal tax law’s overall method of accounting for some corporations.

Select State Tax News

Ask the Expert: Does New York State tax Roth IRA withdrawals?


I've had a Roth individual retirement account since 2009, and I'm in my 70s. I took a distribution for the full amount last month. I know there's no federal tax on the interest income, but what about...

Asheville man planning dream vacation for grandmother with $250,000 NC Education Lottery prize


RALEIGH, NC (FOX Carolina) - Daniel Roberts of Asheville just brought home six figures in the NC Education Lottery, and now he's planning a dream vacation for his 92-year-old grandmother and family...

Research & Commentary: Minnesota Should Not Increase Gas Tax Rates


Over the past five years, 26 states have increased their gas tax rates. Even worse, many more are considering similar hikes. In Minnesota, state legislators are considering several proposals that...

Capital gains eyed by state rep. as way to boost revenue


BOSTON -- A state representative from Cambridge wants to raise the state's capital gains tax in order to generate more than $1 billion in new revenue for the state each year, but at least one fiscal...

TIF approval lends a hand to affordable housing project


Nearly $1.6 million in tax-increment financing benefits were committed this week with the hope of building 204 apartments deemed affordable. The added housing is set to bring the county closer to the estimated 2,567 units a 2014 study suggested be built...

California is reviewing 23,500 state tax refunds it paid too soon


California erroneously sent refunds to 23,500 taxpayers last month, according to an announcement Tuesday from the state’s Franchise Tax Board. ...

US Supreme Court hears trust nexus oral arguments


, the US Supreme Court heard oral arguments for North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Family Trust , which asks whether the Due Process Clause prohibits states from taxing trusts based on a discretionary beneficiary’s...

Former Hawkins County Businessman Arrested for Tax Evasion and Theft


Nashville: The State of Tennessee has issued the following news release: The Special Investigations Section of the Tennessee Department of Revenue conducted the investigation that led to the indictment and arrest of Philip Keith Henard, former manager...

S Corporation Allocations Upon Transfer of Stock


Elliot Pisem and David E. Kahen More When a shareholder of a corporation that has elected under Internal Revenue Code §1362 to be an S corporation is planning to sell the shareholder’s stock, the...

Apartment complexes to see refurbishing


Apartment complexes in Pembroke and Elkton are among 15 across the state that will receive improvements through a project being carried out under the oversight of Winterwood Inc., a Lexington...

California's gas prices hit a 5-year high, but how much of that is actually the gas tax?


Criticism of the gas tax's impact on the price of gas is not necessarily misplaced; California has the second highest gas tax in the country. Author: Eric Escalante Updated: 5:35 PM PDT April...

Why Iowa Tax Refunds Take Longer to Receive


DES MOINES, Iowa -- Many Iowans say they haven’t received their state tax refund even though they filed weeks ago. An Iowa Department of Revenue Spokesperson said as of April 12, they have...

LA 2028 Olympics officials hope new sponsorship strategy results in ...


‹ › × LOS ANGELES -- Facing pressure to deliver the 2028 Los Angeles Olympics on budget, local organizers have signed an unusual deal they hope will guarantee crucial revenue. LA 2028 announced...

LA 2028 Olympics officials hope new sponsorship strategy results in revenue boost


LOS ANGELES - Facing pressure to deliver the 2028 Los Angeles Olympics on budget, local organizers have signed an unusual deal they hope will guarantee crucial revenue. LA 2028 announced Wednesday...