Summer’s Over: Back to Tax-Update-School Time

Summer is coming to an end. Time to shop for school supplies, exchange your flip-flops for boots, and make sure you’re on top of the latest tax rules and regulations.

CPE Link instructor Annette Nellen is a CPA, attorney, and a professor in — and director of — the Masters of Science in Taxation program at San Jose State University. Nellen says quarterly updates are crucial to keep practitioners up to date about the latest developments that affect their practice and their clients.

Nellen’s focus is on key guidance from legislatures, tax agencies and the courts. She teaches graduate-level tax courses on tax research, property transactions, tax considerations for high-tech companies, tax policy and tax accounting methods.

“The world is changing, yet tax systems have been slow to change,” Nellen says. “This can hinder economic progress, lead to a loss in tax revenue and frustrate taxpayers.”

For example, she pointed out in a recent op-ed piece in the San Jose Mercury News, that even with a sales tax rate that dropped July 1 in California the state’s sales tax remains the highest in the nation. She calls it “a relic of the early 20th century.”

Nellen advocates for the base being changed to reflect purchases that are made today, rather than ones made when the tax was created in 1933. Back then, she points out, primarily tangible personal property was consumed. Today consumption of services, digital goods and entertainment outweigh personal property.

Second, she says, business exemptions should reflect the “reality of greater interstate competition” that is part of today’s society.

Nellen in a recent blog post says that applying principles of good tax policy to the overall system would likely “lead to reform or even elimination of some tax expenditures (of which there are about 250 in the tax law). Tax system modernization would consider how we live and do business today and what are appropriate tax rules for taxing income and consumption AND how administrative processes can be modernized to make better use of today’s technology.”

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by Sue Anderson - Based on 30 years of experience in continuing education for accountants. Currently program director for online CPE provider, CPE Link. Formerly with the California CPA Education Foundation managing key operational areas including marketing, program development, and distance learning.

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