46 State Tax & Business Developments You May Want to Know - July 21, 2017

This week I started curating state tax and business developments from a variety of sources into one spot, the LEVERAGE SALT LinkedIn group. Many people have contacted me and said they find it very useful. So I will continue to do so by posting a state tax update blog post every week. To clarify, I will post state tax and business developments daily to the LEVERAGE SALT LinkedIn group. Every week (maybe more than once a week) I will write a blog post summarizing those developments that I posted to the LEVERAGE SALT LinkedIn group with links to the posts. 

The following are state tax and business developments I have curated since July 18th, and posted in the LEVERAGE SALT LinkedIn group:

  1. Internet Access Exempt from Washington Sales Tax

  2. Washington B&O Tax Extends to Speculative Builders

  3. Do you owe TN sales tax on cloud-based software?

  4. Will federal tax reform make state tax nexus even more important?

  5. The ImpACT of the Tennessee IMPROVE Act

  6. Summary of Illinois Income Tax and Sales Tax Changes from P.A. 100-0022

  7. Illinois Withholding Tax Rate and Personal Exemption Amount Changes

  8. Illinois Income Tax Increase Guidance - Detailed Instructions For Filing Your 2016 Illinois Income Tax Return and 2017 Estimated Payments

  9. Incentives Watch: ‘Back to School, Back to School’ in Georgia—Scholarship Tax Credits Have Been Ruled Legal, Too

  10. Indiana – Gain from subsidiary sale is nonbusiness income; interest expense allowed for payments accrued but not paid

  11. FREE WEBINAR TODAY: Legislative and Taxation Updates in Communications and Cloud Industries

  12. Advancing Your Investment Opportunity through NMTC, HTC, and Traditional Incentives

  13. What Did the Washington State Legislature Do to Us This Time?

  14. Personal Property Tax Audits and Appeals – Coast to Coast

  15. 2017 Louisiana Legislative Session Recap

  16. Conferences: Not Lobbying Free-for-alls

  17. Hawaii Revises Government Ethics Laws

  18. State Rundown 7/19: Handful of States Still Have Their Hands Full with Tax and Budget Debates

  19. States in crisis: Embroiled in the worst budget battles since the Great Recession

  20. America's Top States for Business 2017: The full list

  21. On the move: Biggest winners and losers in states' battle to lure corporations, jobs

  22. Middle-Market Public Policy Roundup

  23. The National Center for the Middle Market’s Q2 ‘17 Middle Market Indicator

  24. Starbucks, Anthem Awarded Slice of $7M in Nevada Tax Relief

  25. Investment Entities Owning Property Purchased Outside the United States Face Double Taxation Under Amended New York Law

  26. DuPont Mostly Prevails in $800K Indiana Income Tax Case

  27. The Impact of Federal Tax Changes on States

  28. Unfair Apportionment: Consider the Alternatives | Tax Executive

  29. Kentucky:Amazon Delivers $1.5-Billion Package to Kentucky | Site Selection Magazine

  30. California: Innovation Works | Site Selection Magazine

  31. Indiana: Indiana Claims Factory Belt Title | Site Selection Magazine

  32. Iowa: How to Make $3 Billion | Site Selection Magazine

  33. Iowa: A Complete Business Cycle | Site Selection Magazine

  34. Manufacturing Innovation Center To Open in ’17 | Site Selection Magazine

  35. Minnesota: North Star Manufacturers ‘Optimistic’ | Site Selection Magazine

  36. New England: Punching Above Their Weight | Site Selection Magazine

  37. Tennessee Grants and Tax Credits

  38. Seattle City Council Passed Legislation Imposing a 2.25% Income Tax on Select Residents

  39. How High Are Individual Income Tax Collections in Your State?

  40. Potential state tax consequences of federal corporate tax reform | Deloitte US

  41. The DC qualified high-technology company program: Recent developments

  42. California Chief Counsel Ruling on the Application of Market-Based Sourcing Rules to Non-Marketing Services

  43. Michigan Department of Treasury Discusses Implications of Concluded Multistate Tax Compact Election Litigation

  44. Texas Comptroller Discusses Policy Changes Regarding Temporary Credit for Business Loss Carryforwards

  45. Connecticut Department of Revenue Services Apparently Enforcing Economic Nexus Standard on Some Remote Sellers

  46. Georgia Department of Revenue Amends Administrative Rule on Manufacturing Exemption

The above represents 'general curating' of state tax developments into one spot. If you still feel overwhelmed by the volume of state tax developments, please consider my 'custom curating' service. Meaning, clients hire LS to daily curate state tax developments relating to a specific industry, state(s), tax type and issue. You can make it as granular as you prefer. Clients hire LS to curate information for multiple specific items on a daily basis. This service is provided on a subscription basis.

Update: Nevada Commerce Tax

Nevada recently published a Commerce Tax Registration Process Informational Chart. It is a flow-chart that can help your corporation determine if they need to register.

If your corporation is organized or incorporated in Nevada, it will be registered automatically. All other corporations should make the determination based on answering a nexus questionnaire. 

At the end of March, beginning of April, corporations will receive a "Welcome to Commerce Tax" letter (how nice). The letter will have your corporation's Tax ID number on it. Go to the chart for additional details.

Also, check out Nevada's website or my previous posts on the Nevada Commerce Tax.

Nevada Commerce Tax Draft Regulations Released: Comment Now!

Nevada has released draft regulations for the new Commerce Tax. Taxpayers and tax practitioners have until October 10th to submit comments. 

As I previously mentioned, the new Commerce Tax is similar to the Ohio CAT tax or the Washington B&O tax with deviation. The Commerce Tax uses market-based sourcing to source receipts from services, so out-of-state service providers must look closely at the impact of this new tax on their operations.

PwC has released a nice summary of the draft regulations and takeaways. Check it out here.


Nevada enacts 'commerce tax'

Nevada has signed into law (SB 483) the imposition of a new 'commerce tax' on each business entity engaged in business in Nevada whose gross revenue in a fiscal year exceeds $4 million. 

The Nevada gross revenue is determined by taking gross revenue and making specific adjustments.

Note: there is no adjustment for cost of goods sold.

Revenue is sitused to Nevada differently depending on the source of revenue (i.e., tangible property, real property, services, etc.).

Note: Services are sitused using market-based sourcing methodology (i.e., where the purchaser receives the benefit of the service).

The tax rate will vary based on the industry of the taxpayer.

The tax year begins July 1, 2015 and the first report is due 45 days following June 30, 2016.

Bottom Line

Taxpayers are now subject to a new tax in Nevada, similar to Texas' gross receipts tax, Washington's Business & Occupation Tax or Ohio's Commercial Activity Tax, but with deviation.

Taxpayers must prepare to comply, budget and navigate this new tax (burden).

this week's top 10 developments include: nexus, alternative apportionment, amnesty, transfer pricing and more

Rulings, court cases, and proposed legislation change the landscape of multistate taxation every day. It is impossible to follow all of it. I attempt to keep you aware of the items that may have a significant impact on a broad range of taxpayers. If you are following a major issue in your state that isn't listed below, and would like me to highlight it on this blog, please contact me.

Here are my top 10 for the week:

  1. Tennessee is looking to establish click-through nexus for sales tax and economic nexus for income tax. Legislation moving to Governor (HB 644).
  2. South Carolina issued draft guidance on alternative apportionment methods. Open for public comments until May 14th. Conference to be held on May 21st.
  3. Maryland enacts favorable Amnesty? See McDermott Will & Emery's Inside SALT post for details.
  4. North Dakota enacts law to phase-in single sales factor and repeal some Multistate Tax Commission provisions (SB 2292).
  5. Louisiana proposes combined reporting (HB 775).
  6. Missouri General Assembly passes bill that would establish market-based sourcing for sales other than sales of tangible personal property (SB 19).  
  7. Nevada Senate approves bill to broaden definition of physical presence to cause remote sellers to collect sales tax, including a click-through nexus provision (SB 382).  
  8. New York enacts multiple tax law changes as part of 2015-2016 budget (AB 3009).
  9. New York enacted legislation makes numerous changes to New York City's taxation of corporations (SB 4610).
  10. District of Columbia's transfer pricing enforcement program and combined reporting regime - appropriate? - read McDermott Will & Emery's post for details.

If you would like assistance in determining how any of the above will impact your company or clients, please contact me. Also, please contact me if you would like LEVERAGE SALT, LLC to comment, on your behalf, on the South Carolina draft guidance on alternative apportionment methods.