The National Multistate Tax Symposium West

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State tax policy Recent,developments in multistate taxation. Mark Chao Deloitte Tax LLP,Scott Schiefelbein Deloitte Tax LLP. May 2 2018, General review of corporate taxes beyond corporate income franchise and sales use. Recent proposals for finding a new way to tax businesses. Federal tax reform A stimulus for states to find A new way. What s surprised us in 2017 Judicial developments, What s surprised us in 2017 Legislation and policy. o Rate and apportionment changes, What s surprised us in 2017 Regulations and administration.
Copyright 2018 Deloitte Development LLC All rights reserved. General review of corporate taxes,beyond corporate income franchise. and sales use,Overview of non traditional state business taxes. Washington Business and Occupation B O tax, Widely imposed on most business activities in Washington specific narrow exemptions provided. Tax rates vary based on nature of what is sold 0 13 to 1 5 plus local rates. Filing thresholds extremely low 28 000 of gross sales for most businesses. No consolidated combined filing,Ohio Commercial Activity Tax CAT. Widely imposed on most business activities in Ohio specific narrow exceptions provided. Single tax rate of 0 26 minimum tax on first 1 million of annual taxable gross receipts varies. from 150 to 2 600 depending on total gross receipts no local CAT. Taxpayers with gross receipts of 150 000 or less exempt from CAT. Consolidated returns allowed,New Mexico gross receipts tax.
Essentially a broad based sales and use tax including services. State rate generally 5 125 plus city county rates, No filing thresholds retail sales subject to sales use taxes. Separate filing tax Copyright 2018 Deloitte Development LLC All rights reserved. Overview of non traditional state business taxes,Nevada commerce tax. First return was due on August 15 2016,Tax period of July 1 through June 30. Applies to each business entity engaged in business in Nevada with Nevada sitused gross receipts. Nevada gross revenue exceeding 4M in the taxable year. Business entity includes most businesses except, Entities exempt from tax under the U S or Nevada Constitutions government entities 501 c. nonprofits etc, Grantor trusts estates and REITs that meet certain requirements.
Passive entities and entities limited to owning maintaining or managing intangible investments. No combined consolidated filing, Taxpayers doing business in Nevada but with less than 4M of annual gross receipts must file an. information report, Rates vary from 0 051 to 0 331 depending on industry. Doing business broadly defined but regulations appear to require a physical presence. Nevada gross revenue is broadly defined but excludes. Pass through income, Amounts received from the sale exchange disposition or other grants of the right to use. intellectual property,Dividends and distributions from corporations. Copyright 2018 Deloitte Development LLC All rights reserved. Recent efforts to expand current,state tax regimes to new future.
Recent efforts to expand current state tax regimes to new future state. Oregon initiative proposal 28, Proposal sent to Oregon voters for approval on November 8 2016. Would have imposed minimum tax on C corporations doing business in Oregon on all Oregon sales. exceeding 25 million, Estimated that new minimum tax would have generated 94 of Oregon income tax revenues from. C corporations, Governor proposed plan for implementing tax changes if passed. Oregon commercial activities tax proposal,Considered by Oregon legislature in 2017 session. Repealed corporate income and excise taxes reduced personal income tax rates by 0 5. Broadly imposed gross receipts tax at various rates depending on industry. No P L 86 272 protection,Single return filed by unitary taxpayers.
Copyright 2018 Deloitte Development LLC All rights reserved. Recent efforts to expand current state tax regimes to new future state. City of Portland CEO compensation surtax, Applies to publicly traded companies subject to U S Securities and Exchange Commission SEC pay ratio. reporting requirements starting with the 2017 tax year. There shall be added to the 2 2 tax imposed by the city a surtax of. 10 of base tax liability if company subject to surtax reports a pay ratio of at least 100 1 but less than 250 1. on SEC disclosures or, 25 of base tax liability if company subject to surtax reports a pay ratio of 250 1 or greater on SEC disclosures. Pay ratio required to be reported as follows,Annual total compensation of CEO to. The median of the annual total compensation of all company employees. Taxpayers may petition director of revenue division to permit exceptions to surtax. Other jurisdictions that have recently considered similar proposals include. Connecticut,Massachusetts,Rhode island,California,San Francisco California. Copyright 2018 Deloitte Development LLC All rights reserved. Recent efforts to expand current state tax regimes to new future state. California sales tax on services Proposed SB 1445 2016. SB 1445 includes legislative findings, California highly dependent on personal income taxes paid by high income earners leading to dramatic revenue.
Revenue instability leads to cuts in essential services. California s economy has shifted away from manufacturing and agriculture to services. In 1950 the california sales tax generated 61 of general fund revenues down to about 30 in 2016. In 1950 the california personal income tax generated 12 of general fund revenues up to almost 70 in. SB 1445 would have imposed a modest state only sales tax no local taxes allowed on services. SB 1445 would have also included personal income tax relief to make SB 1445 revenue neutral. SB 1445 would have exempted,Health care services,Education services. Child care,Services represented by very small businesses. Copyright 2018 Deloitte Development LLC All rights reserved. Federal tax reform changes that may,lead states to consider a new. future state, State corporate tax code conf to IRC as of April 13 2018 Rolling conformity to IRC currently in effect. State conformity to IRC references specific and or. decouples from specific Tax Reform provisions Conforms to IRC as of a specific date as. Specific Date Selective, ID 12 21 17 2017 TY or 12 31 17 2018 TY noted for each affected state.
Conformity Conformity,VA 2017 tax year conformity only. AZ 1 1 17 AL Current,GA 2 9 2018 Selective nonconformity. FL 1 1 18 AR Varies by Selectively conforms as noted for each. FL 1 1 2018 Nonconformity to 100 bonus affected state to IRC currently in effect or. GA 2 9 18 IRC section, WI 12 31 2017 Selective nonconformity to IRC as of a specific date. HI 12 31 16 CA 1 1 15,AZ 2017 tax year conformity only. ID 12 21 17 or MS Current, OR Selective nonconformity Not applicable b c state does not levy an.
Contact a tax advisor for more information entity level tax with an IRC reference point. KY 12 31 17,ME 12 31 16,MI Current or,MN 12 16 16,NH 12 31 16 MN VT. NC 1 1 17 NH,SC 12 31 16 SD WI MA,TX 1 1 07 MI CT,VA 2 9 2018. VT 12 31 16 IA PA,WI 12 31 17 NV NE NJ,WV 12 31 17 IL IN. AZ NM AR SC, Copyright 2018 Deloitte Development LLC All rights reserved. Disclaimer Slide to be used for illustrative purposes only Not to be used as a substitute for research into application of rules. Federal tax reform changes that may lead states to consider a new future state. Federal corporate rate reduction, New 20 deduction for qualified business income for pass through entities.
New tax on Global Intangible Low Taxed Income GILTI and related deduction under new IRC. Section 250, New Base Erosion Anti Abuse Tax BEAT on taxable income in excess of deductible payments to. related foreign parties,Immediate federal expensing. Net operating loss limitations,Limitations on interest expense deduction. Modification elimination of federal deductions credits. Copyright 2018 Deloitte Development LLC All rights reserved. What s surprised us in 2017,Judicial developments,What s surprised us in 2017 Cases and Litigation. Cert granted South Dakota v Wayfair What will become of Quill. Cert denied Washington retroactivity case and Michigan compact cases Carlton remains. State court alternative apportionment cases, Tennessee court upholds Department s determination that taxpayer must use market based sourcing.
rather than statutory COP, South Carolina court rejects Department s imposition of alternative apportionment on taxpayer. Minnesota court rejects Commissioner s imposition of alternative apportionment on taxpayer but MN. Supreme Court has agreed to hear Commissioner s appeal. Virginia court rejects taxpayer s bid to use market based sourcing over statutory COP. Colorado court held Department was justified in invoking alternative apportionment on taxpayer IP. subsidiary but that the Department s formula was unreasonable. Some other Miscellaneous items of note, Copyright 2018 Deloitte Development LLC All rights reserved. April 30 May 2 2018 The National Multistate Tax Symposium West Move forward with confidence State implications of tax reform

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