State Tax Think Tankers

7 Questions Companies & State Governments Should Consider

  1. If alternative apportionment is wide open and anything goes, why have statutes?

  2. Are we moving from apportionment to allocation when we use single-sales factor apportionment and market-based sourcing?

  3. Is single-sales factor apportionment 'fair apportionment'? It moves income to customer states, not to states where the activities occurred that generated the income. Income is not based solely on sales.

  4. Are throwback and throwout rules unconstitutional because they look beyond the borders of the state?

  5. Should states be able to enact retroactive legislation to protect the state budget from financial loss?

  6. Should retroactive legislation be limited to a state's statute of limitations?

  7. Should judicial decisions only apply to the taxpayer involved in the litigation if it involves a refund?

What do you think are the top issues/topics in state taxation today?

  1. State income tax reform/response to federal tax reform (which covers a wide variety of issues - depreciation, foreign income, dividends, charitable contributions, NOLs, Domestic Production Deduction, Sec. 199A, M&E, interest expenses, Sec. 118, related party expenses, deemed repatriation, like-kind exchange repeal, Sec. 179 expense, R&E expenses amortization)
  2. Wayfair Supreme Court Case regarding sales tax nexus/collection obligations/possible overturn of Quill/physical presence
  3. State taxation of foreign income
  4. Market-based sourcing impact (continuing trend)
  5. Alternative apportionment (is it all alternative?)
  6. Management & utilization of NOLs / 382 NOL issues
  7. Combined reporting vs. separate reporting 
  8. Single-sales factor apportionment impacts (continuing trend)
  9. Whether to utilize Voluntary Disclosure Agreement/Amnesty programs
  10. Utilizing and negotiating credits and incentives
  11. State income taxation of pass-through entities (new pass-through entity audit rules)
  12. Related party expenses / transfer pricing
  13. Private letter ruling requests
  14. Other?????

Businesses Want to Do Business, NOT Taxes

Businesses are playing a game where the rules keep changing, in the middle of the game. 

Taxes keep changing. A constant battle for businesses to keep up when all businesses want to do is business, not taxes.

Businesses must be able to do business with certainty. State tax laws already lack uniformity and create so many opportunities for businesses to screw up. Now, they keep changing, year to year, day to day.

Over the past few months as state governments have been in session, they have passed numerous pieces of legislation to balance the budget including changes to tax rates, filing methodologies, sourcing rules, etc. along with how or if they will conform to all or parts of federal tax reform.

I have been monitoring state tax legislation and have submitted approximately 30 alerts to clients regarding the changes (and we aren't done yet). More to come. 

Let's work together to make state taxes less important, so businesses can thrive.

Will You Have Pie Leftover?

Scenario #1 - you start with a pie. You give some away. Then you give it all away. Then someone comes along and asks for some. They don't care that you gave it all away already. They want some. You scrape the pie pan and give them some. This continues to happen until it feels like you gave 2 pies away.

Scenario #2 - you start with a pie.  You give some away. Then you give what you think is all of it, but somehow you end up with 2 pieces left. No one comes calling. You have pie leftover.

Both scenarios can happen to a company when filing state income tax returns due to the lack of uniformity among states in filing methodologies, income sourcing, and apportionment methods. This year, states are passing legislation that is not only responding to federal tax reform, but also changing each of these areas for some states. 

Companies should monitor state tax legislation and model out the changes to determine how their income tax liability will shift from state to state. 

The question is - will you have pie leftover or will it feel like you have given 2 pies away when you only had one to begin with?


As I mention on my site, I have been interviewing state tax professionals across the country and posting them on this blog to help each of us build connections and get to know each other better.

To be interviewed, all you have to do is answer the 14 questions (found here) and send them to to be published on the blog.

I have received feedback from professionals that answering the questions is a great exercise. Looking back is a good way to help you move forward.

To read prior interviews, go here.

Today's guest is Rebecca Paulsen, Vice President | Senior State Tax Director at U.S. Bank in Minneapolis. 

  1. Birthplace: Johannesburg, South Africa

  2. Education: Bachelor's degree in accounting, Saint Mary’s College; Master’s degree in taxation, University of Notre Dame

  3. Career: 10 years in public accounting; 19 years in corporate tax in financial services companies; owned my own accounting firm for a couple years early on

  4. Best Career Move: joining the US Bank Corporate Tax Department

  5. Career Goals: to shape public policy in the SALT arena – if I can work myself out of a job by making state tax simple and reasonable for both taxpayers and collectors, then I will have succeeded.  I am a realist, though, so I will be happy if I can make it a little better in my sphere of influence. 

  6. Best advice ever received: was on the golf course:  “you are not good enough to be that p___ed off.”  Best work advice – from President Ronald Reagan (not in person) “Surround yourself with the best people you can find, delegate authority, and don’t interfere as long as the policy you’ve decided upon is being carried out.” I try to do this every day.

  7. Most difficult situation faced on the job: being told about a rumor, and simultaneously being told not to refute it.

  8. Career tip for students: Listen more than you talk.  Respect your elders – experience is more valuable than book smarts.  Spend a lot less than you earn.

  9. Role models: Aside from my parents, two female attorneys, with whom I still work – one in Missouri, and one in DC.  I won’t name them, because they will probably see this, and will not want to be outed.  They are who I wanted to be when I grew up – before life came along and changed my plans.  They are smart, articulate, organized, generous, principled, and fiercely loyal.  I love them dearly.

  10. Family: A husband, three teenagers, two cats, and apparently, a skunk that lives in my barn.

  11. Pastimes: Watching my kids play hockey, competing in random tests of physical endurance (I have run a marathon, competed in a triathlon, and finished several “mud runs”), refereeing soccer games (U12 – U19), reading, cooking, brewing beer, and trying mightily to grow edible things in my garden.

  12. Most memorable book: Atlas Shrugged.  Just read it.

  13. Favorite restaurant: Hell’s Kitchen – in Minneapolis.  Get the Juevos Rancheros.  With bacon.

  14. Ideal vacation: I honeymooned in Samoa and Tonga – if I ever get the chance to go back to Tonga, I might only get a one way ticket.  

I hope you enjoyed meeting Rebecca.

Thank you Rebecca for sharing.


As I mention on my site, I have started interviewing state tax professionals across the country and will be posting them on this blog to help each of us build connections and get to know each other better.

To be interviewed, all you have to do is answer the 14 questions (found here) and send them to to be published on the blog.

I have received feedback from professionals that answering the questions is a great exercise. Looking back is a good way to help you move forward.

To read prior interviews, go here.

Today's guest is Adam Krupp, the Commissioner of the Indiana Department of Revenue and former BigLaw attorney. Adam is a very active and forward-thinking Commissioner. His story and path is unique and I think you will find his interview very informative and insightful.

  1. Birthplace: Rockledge, Florida

  2. Hometown:  Plymouth, Indiana

  3. Education: Bachelor’s degree (Purdue University, 2000) – Majors: Speech Communication, Theatre Education; Minor: English; J.D. (Indiana University McKinney School of Law, 2004)

  4. Career: 18 years, starting as a high school English teacher and Speech/Debate coach in southern Indiana, followed by private law practice with two New York law firms, with multiple stops in Indiana state government employment along the way (including: clerking for the Indiana Court of Appeals, serving as in-house counsel for an social services agency, general counsel for the Bureau of Motor Vehicles, special counsel for then-Governor Mike Pence, and now commissioner of the Department of Revenue). I have been an adjunct professor for the IU law school, as well.

  5. Best Career Move: Without a doubt, my best career move was making the tough decision to leave teaching to head back to school. As much as I enjoy teaching, generally, I needed a few more years to mature – graduating from college in 3 years to start teaching high school at 21 was not ideal, in hindsight – and to find my role in this world. That change presented me with an opportunity to live and work in New York City, which was a dream growing up as a small-town kid in Indiana who wanted to be an actor. But instead of waiting tables or temping to leave time for auditions, I ended up wearing suits and walking into corporate boardrooms, buying tickets to stage productions as much as possible. I made great friends, career connections, and experienced a completely different and unique culture in another part of the country – the latter of which likely would not have occurred had I not left my teaching job to enter law school.

  6. Second Best Career Move: Leaving the private practice of law to commit myself to public service. The last few years have changed my life, and now I find myself doing something I truly love instead of worrying about how much money I can make by the time I’m 50. I’ve been blessed with the opportunity to impact millions of people through each stop in state government, and being a transformational change agent at my core, I believe I’ve had a positive impact each stop along the way – people have received Medicaid benefits much faster, had easier trips to the BMV, and are now experiencing better interactions with revenue agents who are here to assist and provide customer service as their primary objective (instead of collecting as much revenue as possible). When you’re put in a position to change the entire culture of an organization – in my case, multiple organizations – it is an incredibly rewarding, self-fulfilling experience.

  7. Career Goals: Leave each place in better shape than it was when I walked in the door; change the narrative that typically applies to state government employees and agencies; develop and inspire future organizational leaders; help Governor Holcomb put Indiana on the map.

  8. Best advice ever received: Stay true to yourself and good things will follow.

  9. Biggest challenge faced on the job: I gather the upcoming modernization project for the Department of Revenue will rank pretty high on the list, but we don’t actually start that 4-year implementation for another month or two, so I’ll point to the fact that on my third day as general counsel for Indiana’s BMV, I was essentially told by the administration that I needed to re-write Indiana’s motor vehicle code. At the time of my arrival, the agency had just been ripped to shreds publicly by an independent assessment performed by BKD, was sued in a multi-million dollar class action, and getting beat up in the press on a weekly basis. In addition to repairing the agency’s image and navigating through the problematic lawsuit, I somehow had to find time to re-write 1,000 pages of laws in 5 months … laws that I was reading for the first time. The only answer was to put in the time and get to work. 5 months later, after averaging 80 hours per week (at government pay!), I was lobbying for and testifying about a comprehensive re-write of the motor vehicle code in a 400+-page piece of legislation … plus, it was my first experience with Indiana’s General Assembly. Thankfully I had an experienced legislative director at my side to teach me the ropes of how that process works. I viewed that as the biggest challenge of my professional career. Today, I proudly display in my office a framed copy of the bill’s first page with the pen then-Governor Pence used to sign the bill into law.

  10. Career tip for students: Don’t stress out over what your immediate plan is for after graduation! I thought I had everything figured out, rushed to finish college in 3 years, and that career choice lasted one year. Then, I had it all figured out during law school and sure enough, life pulled me into multiple directions. Be open to opportunities that might not fit your 5-year plan. I’ve been the commissioner of the Department of Revenue for 13 months, and I can honestly say this job was nowhere on my radar 15 months ago … yet it’s been the most fun I’ve ever had, professionally. Truth be told, I purposely avoided all tax classes in law school because I *knew* I’d never have anything to do with tax other than once per year when I had to file mine. Oops?

  11. Role model: My sophomore speech/drama instructor, Dan Tyree. He went on to become assistant principal at my high school after I left and then superintendent of the community school system before retiring last year. He was a larger than life individual, Hall of Fame inductee in his field, and master motivator of kids like me. You wanted to mimic his confidence, excellence, and strive to meet his lofty expectations. He’s the reason I wanted to coach speech/debate, following in his footsteps, and even though teaching didn’t work out for me, we have remained close over the course of my 21 years since graduating high school. One of my proudest moments was being able to present him with the Sagamore of the Wabash last summer, an award from Indiana’s governor, recognizing his incredible career in public education (42 years), leaving a legacy that won’t be matched anytime soon.  

  12. Family: Wife (Rachel), Sons (Coleman - 4, Cassius - 5 months)

  13. Pastimes: Running, playing tennis, attending live sporting events (especially college basketball), and chasing my kids around the house. A prior chapter of my life would have included reading newly-published one-act plays and signing up for community theatre opportunities.

  14. Favorite movie: Rain Man. I could watch it every single day and not get tired of it; Dustin Hoffman’s character portrayal was legendary – at a time when nobody understood autism and many hadn’t even heard of it. It inspired me to want to become an actor, frankly. It has to be one of the top performances in film history!

  15. Favorite restaurant: Okay, this is going to sound ridiculous, but I really miss the Chirping Chicken on the Upper West Side in Manhattan. When I was a single guy, working insane hours, and lived near 72nd / Amsterdam, I probably grabbed late-night meals there 4-5 nights per week. The chicken sandwich was delicious, and they made special-order fries the way I liked them as soon as I walked in the door!  From time to time, they put a Gatorade with my order “on the house” because I looked so exhausted and the staff thought I needed a jolt. I loved that I could interact with the staff every time I walked in.  Customer service at its finest!

  16. Ideal vacation: I’m unaware of what a “vacation” is, since I haven’t really had one in several years, but I’m guessing it involves time away from work!  Ideally, the entire family is relaxing near an ocean, and I get to run on the beach to start each day. I have to be someplace warm to consider it a vacation – I become a more care-free, relaxed person when I can put flip-flops and shorts on and not feel pressure to check my email! That’s what my wife tells me, at least …

I hope you enjoyed meeting Adam.

Thank you Adam for sharing.