Potential State and Local Tax Issues and Opportunities in 2010!
I would like to thank everyone who has visited my blog over this past year. I would also like to thank those who contacted me, asked questions, sought advice, provided commentary, etc. I have really enjoyed making new connections and building relationships with interesting people all over the country and world.I was given the opportunity to write this blog on AccountingWeb.com in the summer of 2009. I really enjoy writing and communicating state and local tax developments in the hope that I am helping others keep up to date and/or providing a forum for interaction and commentary.
I will be taking the next two weeks off for the holidays (Christmas and New Year's), but will be back in 2010 ready to see where next year will take us, and this blog.Here is a brief list of some of the issues or opportunities I am looking at for 2010:
- States will continue to have budget problems and will either be forced to raise taxes by enlarging the tax base, or by increasing enforcement efforts.
- Amnesty programs will continue to rise-up.
- California will enact some additional type of tax reform (business net receipts tax? maybe.)
- New York will enact some type of tax reform (probably).
- Rhode Island is considering a net receipts tax; will it be enacted????
- State treatment of COD income will be important; is it included in apportionment?
- More states will move to "market based sourcing" for apportioning Service Income.
- State NOL carryback rules will come into play.
- States will continue to decouple from Federal taxpayer favorable legislation.
- Sales taxation of digital goods, software as a service (SaaS), application service provider (ASP), cloud-computing, e-commerce, will continue to grow in importance.
- States will continue to increase the frequency with which nexus questionnaires are sent to taxpayers.
- Taxpayers will be forced to review whether they have a taxable presence in states (nexus) due to FIN 48 requirements and states' increased enforcement efforts. Taxpayers should consider Voluntary Disclosure Agreements to limit the look-back period and obtain relief from interest and penalties.
- Third-party warranty repair services (agency nexus) will become more of a factor.
- Economic nexus will spread like wild-fire.
- Washington's new reseller-permit requirements come into effect.
- California's new Use Tax registration requirement is in effect; will you comply?
- Apportionment issues and opportunities abound.
- Transfer-Pricing for related-party transactions will increase in importance.
- When apportioning service income, what really is your "income-producing activity"?
- The state requirements related to Federal Revenue Agent Report (RAR) adjustments will be demanding.
- Combined reporting will continue to spread.
- Credits and incentives will arise in places you least expect.
And last but not least, I will continue to strive to be your state and local tax partner, providing cost-effective state and local tax services saving you time, money and mitigating risk.
I will seek to help you meet your compliance requirements, prevent problems, take advantage of opportunities, and represent you when emergencies arise (audits, notices, appeals, etc.).
Again, thank you for visiting and contacting me this year. I look forward to 2010! Merry Christmas and a Happy New Year!
Remember: No Pressure, No Diamonds. Keep moving forward. Finish Strong!
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at firstname.lastname@example.org.
Because state and local taxes are deceptively simple and endlessly complicated.