Welcome to the July 2019 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) how some states do not conform to the favorable tax benefits provided to taxpayers that make investments in qualified opportunity zones; (ii) legislation in Florida and New York regarding each state’s tax treatment of GILTI; (iii) a South Carolina Private letter ruling applying the “true object” test to a transaction where SaaS is provided; and (iv) an opinion from the New York Court of Appeals holding that a price comparison service was a taxable information service and did not qualify for the “personal and individual” exclusion.

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

Not All States Are On Board with the Tax Benefits of Qualified Opportunity Zone Investments

By Jeff Glickman, SALT Partner

The Tax Cuts and Jobs Act provides very favorable tax benefits to taxpayers that make investments in Qualified Opportunity Zones, but not all states are on board with such tax benefits, and taxpayers should be aware before deciding on a particular investment.

States Continue to React to the Tax Cuts and Jobs Act’s New GILTI Provisions

By Betsy Tuck, SALT Manager

States continue to enact legislation on the treatment of GILTI over a year and a half after such provisions were enacted into the Internal Revenue Code.  New York’s legislation results in different tax treatment for GILTI in 2019 than for 2018, and Florida’s legislation adds an additional notification requirement for 2018 and 2019.

South Carolina Rules Data Collection and Analysis Services Using Online Reporting Software is Not a Taxable Communications Service

By Tina Chunn, SALT Senior Manager

Sometimes states and taxpayers jump to the conclusion that if SaaS is provided, then the transaction is automatically taxable if the state taxes SaaS, but if the SaaS is provided as part of package of products/services, then it may be necessary to examine the true object of the transactions to determine taxability, as explained in this South Carolina ruling.

New York Court Holds that Competitive Price Audits Constitute Taxable Information Services

By Jess Johannesen, SALT Manager

In applying the “personal and individual” exclusion to otherwise taxable information services, New York’s high court looked to the nature of the information as opposed to the manner in which the service was customized to the purchaser’s specifications.

About Aprio's State and Local Tax Practice

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.