State Tax Provision Time - Who Cares? | AccountingWEB

State Tax Provision Time - Who Cares?

It's that time of year again - Tax Provision Time. Yeah!!!

Is your company currently calculating it's 2011 tax provision?  If so, how is your state income tax provision going?  Did you calculate your effective state tax rate?  Did you take into account your company's significant state tax addback and deductions?  How about changes in apportionment?  Law changes?  Rate changes?

How about everyone's favorite - state uncertain tax positions or UTPs.  Is your company taking those into consideration correctly?  Is your reserve growing year after year?  Did your company conduct the appropriate level of analysis (a thorough one) to determine what, if any reserve needs to be recorded for FIN 48 purposes? 

What items could you possibly need to set-up a reserve for?

  1. Nexus
  2. Intercompany transactions
  3. Combined reporting vs. Separate company return filing
  4. Apportionment factor  issues (measurement and sourcing)
  5. Restructuring challenges (forced combination, etc.)
  6. Business vs. Nonbusiness income characterization


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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:

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Because state and local taxes are deceptively simple and endlessly complicated.

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