Welcome to the January 2020 Issue of the Aprio State & Local Tax (SALT) Newsletter
With dozens of different taxes imposed by the 50 states (and thousands of local jurisdictions), we recognize how challenging it is to keep up with current issues and developments. This newsletter is designed to provide insights on developments in state and local taxes including new legislation, regulations, rulings and cases addressing issues such as corporate and personal income taxes, sales and use taxes, nexus, franchise/net worth taxes, etc.
This issue of the newsletter contains articles addressing (i) a few of the complex sales tax compliance issues facing marketplace facilitators and marketplace sellers; (ii) a unique New York rule that forced a New York C-corporation to be treated as an S-corporation, resulting in a large tax assessment to the non-resident shareholders; (iii) a Massachusetts decision explaining the state’s multiple points of use exemption and how it applies to purchasers of software used concurrently in multiple jurisdictions; and (iv) an Alabama case denying a corporation a refund for composite taxes paid by partnerships in which it was a member because the corporation failed to claim the credit within the statute of limitations.
In case you missed prior issues of this newsletter, please click here.
If you have any comments, questions or suggestions regarding current or future topics, or if you would like to learn more about Aprio's SALT Practice, please email us at jeff.glickman@aprio.com. Thank you.
Jeff Glickman, J.D., LL.M.
Partner-in-Charge, State & Local Tax Practice
State Marketplace Facilitator Rules Adding Complexity to Sales Tax Compliance Landscape
By Jeff Glickman, SALT Partner
State marketplace facilitator rules have created added complexity to sales tax compliance, and marketplace facilitators and marketplace sellers need to pay attention to state guidance in order to understand their respective obligations.
Lorman Webinar: Software and Cloud Computing Sales Taxation with Aprio’s Jeff Glickman
By Jeff Glickman, SALT Partner
Technological innovation is all around us, providing us with the ability to purchase, receive, and consume products/services in ways we never imagined. Unfortunately, state tax legislatures are unable to keep up with the rapid pace of technological innovation, resulting in sales tax laws and regulations that do little to provide guidance to those responsible for sales tax compliance. This March 31 webinar looks beyond the sales tax statutes and regulations, and instead focuses on the rulings, policy statements, and sales tax decision to help taxpayers and their advisors identify and understand the potential sales tax issues that need to be addressed. Use the link below to register and receive a 50% discount on your registration fee (may only apply for a limited time).
New York: Mandatory S-Corporation Rules Applied Following 338(h)(10) Election
By Kristen Davis, SALT Associate
Pursuant to a unique New York provision, a federal S-corporation that did not make a separate New York S-election was treated as a New York S-corporation following a sale of the business in which the parties made a 338(h)(10) election, resulting in a large New York tax assessment against the S-corporation shareholders.
Massachusetts Explains Application of Multiple Points of Use Exemption for Software Transactions
By Jess Johannesen, SALT Manager
For businesses that purchase software that will be used concurrently by users in multiple states, sales tax rules may allow the purchaser to provide the seller documentation that certifies the percentage of usage in each state, which could minimize the purchaser’s sales and use tax liability.
Alabama Denies Refund of Composite Payments Not Claimed Within Statute of Limitations
By Tina M. Chunn, SALT Senior Manager
Owners of pass-through entities should pay close attention to the taxes that are paid on their behalf by the pass-through entity, because failure to take credit for those payments in a timely manner may prevent a future refund claim.
Aprio's State and Local Tax (SALT) practice advises clients on the state and local tax implications of their business operations, allowing clients to strategically minimize their liabilities and risks. Our team has over 50 years of combined SALT experience working in industry, state departments of revenue, public accounting and private law practice. We specialize in all areas of SALT, including matters related to state tax nexus, corporate and personal income taxes, sales/use tax, franchise/net worth taxes, credits and incentives, and mergers and acquisitions. In addition, we represent clients in administrative matters before state revenue departments around the country, including audit defense and settlement negotiations, pursuing voluntary disclosure agreements and obtaining letter rulings.
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