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State & Local Tax news

April 2019

In This Issue:

 

Welcome to the April 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) a recent IRS Revenue Ruling explaining how individual taxpayers should determine if their state and local tax refunds constitute gross income as a result of federal tax reform; (ii) an update on post-Wayfair activity consisting of an Indiana ruling addressing which sales count toward the state’s economic nexus revenue threshold and the City of Philadelphia’s new regulation adopting a Wayfair-like economic nexus rule for its city income tax; (iii) a New York Advisor Opinion concluding that a marketplace facilitator was engaged in enough aspects of a transaction to be classified as a “vendor” that is obligated to collect sales tax; and (iv) an Indiana Department of Revenue determination that a pharmacy benefit management provider was a seller of prescription medication and not a service provider, and was therefore required to source some of its sales to Indiana.

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 [email protected]. Thank you.

Jeff Glickman
Jeff Glickman, J.D., LL.M.
Partner-in-Charge, State & Local Tax Practice
 
SALT Tax filling

IRS Issues Guidance Explaining Inclusion in Federal Gross Income of State and Local Tax Refunds

By Jeff Glickman, SALT Partner

With new rules under federal tax reform, such as the $10,000 itemized deduction limitation for state and local taxes, the IRS responded to requests for guidance regarding the taxability of state and local tax refunds.

 
SALT Money and Gavel

Wayfair and Nexus: The Aftermath - Part 3

By Jess Johannesen, SALT Manager

Indiana issued much-needed guidance to address which sales are used to calculate the economic nexus revenue threshold (other states need to as well), and the City of Philadelphia has joined the party with an economic nexus rule for its local income tax.

 
SALT Sales Tax
 

New York Rules that Marketplace Facilitator is Required to Collect Sales Tax

By Tina Chunn, SALT Senior Manager

Despite not having a marketplace facilitator statute at the time of the ruling, the state ruled that a marketplace facilitator’s participation in the transaction was enough for the state to classify it as a “vendor” that is obligated to collect sales tax.

Indiana DOR: Out-of-State Pharmacy Benefit Management Company’s Revenue is Sourced to Indiana

By Jeff Glickman, SALT Partner

Whether a taxpayer is a service provider or a seller of goods has significant state tax consequences, and taxpayers that want their state tax position upheld should make sure that their documentation and transaction reporting methods are consistent with that position.

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.