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State and Local Thinking -- April 2016

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State and local Thinking - April 2016SALT Alerts

Washington amends financial institution apportionment rules to conform to MTC regulations
The Washington Department of Revenue has issued emergency amendments to its administrative rule addressing how financial institutions engaged in multistate business must apportion certain gross income for business and occupation (B&O) tax purposes that is taxable under the service and other B&O tax classification. Read the SALT Alert.

Tennessee Supreme Court upholds commissioner-imposed variance requiring use of market-based sourcing
The Tennessee Supreme Court recently upheld the authority of the Tennessee Commissioner of Revenue to require an alternative method of apportionment when the statutory cost-of-performance method did not fairly represent the extent of a taxpayer’s business activity in the state. Read the SALT Alert.

Washington Supreme Court upholds retroactive application of amendment to B&O tax exemption
The Washington Supreme Court held that the retroactive application of the legislature’s amendment to a business and occupation tax exemption revising the definition of “direct seller’s representative” to conform to the Washington Department of Revenue’s interpretation of the exemption didn't violate a taxpayer’s rights under due process, collateral estoppel or separation of powers principles. Read the SALT Alert.

Illinois adopts new regulation for apportioning business income of transportation companies  
The Illinois Department of Revenue has adopted a regulation to provide guidance on how to apportion the business income of transportation companies. The regulation clarifies the major statutory changes for apportioning transportation company income that apply to taxable years ending on or after Dec. 31, 2008. Read the SALT Alert.

West Virginia imposes sales tax on service provider due to presence of in-state independent contractors
The chief administrative law judge of the West Virginia Office of Tax Appeals recently ruled that independent contractors performing work within the state on behalf of a company with no physical presence in West Virginia created substantial nexus for the company. Read the SALT Alert.

South Dakota enacts legislation challenging Quill’s physical presence requirement  
South Dakota Gov. Dennis Daugaard on March 22 signed legislation, S.B. 106, requiring certain remote sellers that don't have a physical presence in South Dakota to collect sales tax on sales made in the state. Read the SALT Alert.

New Jersey Tax Court holds hospital unable to claim exemption from property tax
The New Jersey Tax Court recently held that a nonprofit hospital wasn't entitled to an exemption from property tax assessed by the town of Morristown for the 2006-2008 tax years because the hospital failed to provide evidence that the operation and use of its property was entirely conducted under a nonprofit motive.  Read the SALT Alert.

Michigan Court of Appeals finds SBTA did not imply the repeal of the Compact apportionment election provision
The Michigan Court of Appeals on Feb. 25 held that the Single Business Tax Act (SBTA) didn't imply the repeal of the apportionment election provision contained in the Multistate Tax Compact. As a result, the court of appeals held that the more heavily weighted sales factor apportionment formula under the SBTA for the 2005, 2006 and 2007 tax years was not mandatory, allowing taxpayers to elect to apportion their tax base to Michigan using the Compact’s equally weighted three-factor apportionment formula. Read the SALT Alert.

Tax webcasts and events

Indirect tax trends in a digital world webcast
April 28, 3 p.m. ET
Indirect tax continues to metamorphose. What was originally considered a tax on the transfer of tangible personal property continues to evolve into a tax on the provision of services. This is especially evident in the increasing number of digital goods and services. This program will provide an update on how states are evolving in taxing digital goods and services, including a discussion on transactions involving digital currency. In addition, it will address how the states are applying nexus to these digital service providers.  Sign up now.

Tax basis step-up transactions webcast
May 12, 3 p.m. ET
In most taxable transactions, it is possible to structure the deal to achieve a tax basis step-up for the buyer. But is it always desirable, and what’s the best structure to accomplish this? We will summarize the pros and cons of basis step-up transactions and outline the options available to the buyer to achieve a basis step-up. Topics include asset purchases, Section 338(h) (10) and Section 336 elections, partnership transactions with Section 754 elections, Rev. Rul. 99-5 transactions, and other mechanisms to achieve basis step-ups.

Practical implications of BEPS in the Americas
May 24, 3 p.m. ET
The base erosion and profit shifting (BEPS) framework developed by the Organisation for Economic Cooperation and Development (OECD) has affected multiple jurisdictions in the Americas region. From Canada to Chile, countries in the Americas have endorsed, criticized and, in some cases, adopted the BEPS action steps, leading to tax reforms in multiple jurisdictions. This webcast will discuss the practical implications of BEPS in key jurisdictions in the Americas, including how they are implementing Action 13 (country-by-country reporting).

Recent changes in IRS organization and exam practices: How do they affect you?
June 1, 3 p.m. ET
This webcast discusses the recent reorganization of the IRS Large Business and International Division, as well as legislative and procedural changes affecting IRS examinations, including partnership audit procedures. Learn about how these changes may influence your business.

Global tax attribute tracking: issues and opportunities  
Tune in to our webcast to learn about hot topics, recent developments and possible opportunities affecting multinational companies’ global tax attributes. We will address topics such as earnings and profits, foreign currency considerations, foreign tax credits, and the impact that a company’s global tax attributes will have on financial statements (for example, unremitted earnings). 

Family office operations — cybersecurity  
Cybersecurity is a critical issue for family offices, for good reason. Family offices are responsible for large amounts of money, making them a target. In addition, many family offices would admit they’re unprepared to protect the rich and sensitive information they house.  

Tax accounting quarterly update: March 2016
Learn about developments and significant issues that can affect your financial statements, including accounting for income and non-income taxes. We will focus on the financial reporting implications of these developments. This is part of our series of quarterly webcasts sponsored by Grant Thornton’s Tax and Risk Advisory Services practice.   

Understanding India’s budget for 2016–17
While there have been hiccups in getting certain key bills passed by the upper house of the parliament, the business community is still upbeat about the upcoming union budget for 2016-17. In this webcast, tax professionals from Grant Thornton India and Grant Thornton US address highlights of the 2016-17 budget, along with major policy initiatives and an overview of the long-awaited goods and service tax.  

Executive compensation — proxy insights, 2016 regulatory updates and not-for-profits
This webcast covers insights gained from assisting our executive compensation clients during proxy season. Topics include updates on institutional advisory firms (proxy advisory firms) and key institutional investors, trends in equity incentive plan design and share requests, regulatory updates, and not-for-profit executive compensation issues and disclosures.   

Transforming your tax function — trends, leading practices and CFOs’ perspective
Tax changes and changing viewpoints about tax around the globe continue to challenge the most effective tax functions in meeting their regulatory requirements, effectively managing risk and adding value to their organizations. Members of Grant Thornton LLP’s national Tax and Risk Advisory Services tax business line and Technology Solutions practice discuss how CFOs view the value of a tax function, how legislative and regulatory changes continue to affect the risk profile of many multinationals, and how to transform a tax function to effectively manage the change.   

Thought leadership from our State and Local Tax professionals

Publications
  • April 4, Bloomberg BNA Daily Tax Report, "Amazon Affiliate Program Ends with Louisiana Sales Tax Law," Jamie Yesnowitz, SALT principal, quoted.

Tax professionals   

Meet Matthew DiDonato, SALT partner in the New York office
Matthew DiDonato is a SALT partner in the New York office and leads the Metro New York SALT practice. He has more than 18 years of public accounting, private industry and legal SALT experience.

Matthew’s skills span the full range of state and local taxation, including income, and franchise and sales/use taxation research and planning for diverse business organizations and transactions. He has worked with various types of business entities, including corporate, partnership and trust entities; and engaged in industries including finance, banking, insurance and broker/dealer. Matthew negotiates and resolves state tax disputes, and facilitates requests for advisory opinions, opinions of counsel, voluntary disclosures and audit defense.

Before joining Grant Thornton, Matthew worked at Ernst and Young LLP’s financial services organization state and local tax practice in New York. He was previously tax transactions and consulting counsel at Mayer Brown LLP in New York.

Matthew earned an LLM degree from the Georgetown University Law Center, a JD from Saint John’s University School of Law and a BA from Pace University.





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