25th Anniversary, 22 Year Career, High School Senior, 4 Year Old Firm, Building Something New

My wife and I are celebrating our 25th wedding anniversary tomorrow (August 8th). We celebrated it over the weekend with a little get away in downtown Nashville. I set up the whole weekend to surprise my wife. We stayed in a fancy hotel and had a nice dinner. I had 25 long-stem red roses delivered to the room. It was a great weekend. 

In addition to being married for 25 years, I have been doing state taxes for 22 years. That sounds crazy. I used to look at people who had been in their career long and be like, "wow," you must really know your stuff. Now I am one of those. Crazy how time flies. Speaking of time, my oldest daughter will be a senior in high school which starts this week. We are busy talking about college options and whether college is still a good investment. I have lots of opinions on this, but will hold that for another day. 

As far as LEVERAGE SALT, LLC goes. If you have been following along, I started the LEVERAGE SALT blog in 2009. I started the LEVERAGE SALT LinkedIn group in 2012 and LEVERAGE SALT, LLC in 2013. Consequently, I have been on my own for 4 years. That even sounds like a long time to me. Needless to say, I have been more successful than I could have thought when I started LS, LLC. I have made more money and had more freedom than ever before. During that time, my family and I moved ourselves from Richmond, Virginia to Nashville, Tennessee and totally renovated a house on 16 acres. We built my wife's dream home. Crazy stuff. I don't say this stuff to brag. I say this stuff to tell you my story and let you know that life is too short to not go for what you want. What are you waiting for? Permission? 

Running your own firm, especially by yourself, can be lonely at times. I find myself wanting to work at a firm again just to have more interaction. However, once you have the money, the freedom is something you can't put a price on. 

One of the things I love about having my own firm is that I can implement ideas quickly. Perhaps sometimes too quickly. Regardless, I am continually thinking of new ideas, opportunities, ways to help state tax professionals do more, get more done, etc. without the bureaucracy of large firms. 

At my core, I love analyzing court cases, rulings, daily developments and writing about them. I also love handling controversy - I call it, "research with a purpose." You may have noticed that I am attempting to build a state tax controversy innovation center. The goal of the Center is to serve and promote state tax controversy professionals across the country by building a mastermind network, knowledge sharing publication, CPE, and various tools. 

I want to thank you for reading my blog. Following along on my crazy story. I hope you find my blog useful and my story helpful. 

Please connect with me on LinkedIn. Send me an e-mail. Subscribe to the blog. Join the LinkedIn group. I would love to hear your story. I may start promoting and sharing stories of other tax professionals on my blog in the near future. Lots of ideas. Lots of plans. 

Have a great week!

13 Books You Should Read & Saturday Musings (INNOVATION)

Good morning. It's Saturday. I have multiple 'land chores' on the schedule for today. If you don't know, we bought 16 acres near Nashville last year. Totally gutted the house and completed a 6 month renovation last December. It's awesome having no one around us. First time I have lived in the country. The only challenge is the land. Getting it and keeping it the way you want it. 12 acres are trees, so I have approximately 4 acres or so of mowing, weed killing, tree cutting, etc., etc., etc. 

In any case, back to state taxes.

If you have noticed, over the past couple of weeks I have started to curate state tax AND business developments into the LEVERAGE SALT LinkedIn group. I think this is a good way to put multiple pieces of important information into one place. I hope you are liking the format. 

In regards to my practice, I am constantly looking for new ways, new services, changing my website, changing my marketing, contacting new people, developing new relationships - trying to change the state tax world for the better. I don't want to just do what everyone else is doing. I want to create and innovate. Do something new. Develop a new angle. A fresh approach. A better way.

Contact me with your ideas. Your passions.

How would you change the state tax profession?

How can you better serve your clients?

What does your tax department really need from your state tax consultant and why aren't you getting it?

I am a state tax partner and writer. In addition to the 40+ articles with my name on it, I have ghost-written several articles for firms. Let me know if you are interested in learning more to help your firm grow its practice.

Some of my favorite books I have read are:

1. Tribes by Seth Godin
2. 10X Rule by Grant Cardone
3. Be Obsessed or Be Average by Grant Cardone
4. Essentialism by Greg McKeown
5. One Thing by Gary Keller
6. Crush IT! by Gary Vaynerchuk
7. Start with Why by Simon Sinek
8. REWORK by Jason Fried
9. The Compound Effect by Darren Hardy
10. Make Ideas Happen by Scott Belsky
11. Deep Work by Cal Newport
12. So Good They Can't Ignore You by Cal Newport
13. The Freaks Shall Inherit the Earth by Chris Brogan 

Have a great weekend!

Tax Legislation: Are We Asking The Right Questions?

State tax developments are everywhere. They happen daily. The question is - are we just reporting them or are we challenging them?

This legislative season has seen crazy proposals to raise revenue, balance budgets - all influenced by political pressures and confusion. We have policy organizations submitting reports and studies asserting that certain proposals are ridiculous or would either be unfair or detrimental to the state and specific taxpayers. This complexity not only applies to state tax legislatures, but also the federal government - as we know. The problem is that states generally have to balance their budgets every year to operate (although apparently that doesn't apply to Illinois).

One thing I noticed is that state legislative sessions are focused on raising revenue. Always asking what can or should be taxed? What new forms of business do we need to tax? What tax revenue are we missing out on?

I think those are the wrong questions. The questions we should be asking are:

• What services should the state or federal government provide?
• To what extent ($$) should the government provide those services?
• How do we prioritize those services?
• What is the cost/benefit of providing those services?
• At what point does the provision of those services cause detriment to citizens and our economy? 
• What oversight will each service have to avoid waste and efficient use of taxpayer dollars?

We don't always need more revenue. We need to rethink and revamp the purpose of government. Our governments should be lean and efficient. They should provide us with what we need most - not more or less. It's not about tax revenue, it's about efficient government. It's about the health and wealth of our country - financially, physically and spiritually. 

If we never ask the right questions, we won't get the right answers.

DON'T BE A ROBOT. PROVIDE LEVERAGE.

With all the talk of innovation, robotics and artificial intelligence changing the landscape of how tax departments function, it is imperative that tax professionals position themselves as something more than data movers.

Certain areas of accounting and tax have been commodities for years. Now, with technology, it will become even more so. As I have been saying for years, the real value of a tax consultant is providing leverage - knowledge, judgment and advocacy. In other words, it isn't the data that helps a company win an audit, determine a position on a return, or plan to minimize tax on a merger or acquisition. It is the knowledge, judgment and advocacy (expertise) of the tax professional and his or her ability to interpret and apply the law to specific data. The experience and connections of a tax professional cannot be mimicked by a computer or robot.

Position yourself to be valuable. Position yourself to provide leverage.

That's my objective.

Why Corporations Don't File State Tax Private Letter Rulings

• Taxpayers must disclose their identify before obtaining an answer from the state.
• Facts may not be accurate, or disputed later, making the answer invalid.
• Ruling may be revoked at any time.
• Timing of the proposed and prospective transaction with obtaining an answer from the state.
• Rulings are binding unless the facts are not accurate.
• Unsure as to how deep of an analysis of the law the corporation is required to provide.
• The length of time to obtain a ruling.

Why would you request a private letter ruling?

• To avoid receiving an assessment for additional tax, interest and penalties in the future

How do you file a private letter ruling?

• get your facts straight
• do it timely

Any questions?

Middle Market Companies Fight State Tax Surprises

As a CFO, controller or finance executive in a middle market company, you have a wide range of responsibilities to manage.  State and local tax matters can pop up when you least expect it and cause compliance and financial burdens.

Some of those state tax surprises could be (regardless of industry):

1. State tax registration requirements - when should you register?  If you register, will that create tax filing obligations?  When can you withdraw your registration?
2. State income tax apportionment - when can your company allocate income instead of apportion income?
3. Sales taxability of digital goods, licenses, subscriptions, computer hardware, software, cloud computing, etc.
4. Sales tax audits and appeals
5. Choosing sales tax codes for your sales and purchases to correctly utilize your sales tax compliance/decision software with your ERP system
6. Knowing when your company has a filing obligation in a state
7. Filing Voluntary Disclosure Agreements to mitigate prior year tax exposure
8. Determining sales tax consequences of "bundled transactions" or "mixed transactions" (transactions that include taxable items with non-taxable items)
9. Determining sales and use tax consequences for entities that conduct transactions with governmental entities.  When does the exemption apply?  What does the exemption apply to? 
10. If my company is a service provider, is my company paying use tax on purchases?

Several of my clients have had these issues recently.  Do any of the above items sound familiar to you?