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State and Local Thinking -- May 2016

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State and local Thinking - May 2016SALT Alerts

Mississippi reduces income tax rate and phases out corporate franchise tax
Mississippi Gov. Phil Bryant on May 13 signed the Taxpayer Pay Raise Act of 2016, a bill that will reduce the income tax rate for corporate and individual taxpayers, create a deduction for self-employed individuals and phase out the corporate franchise tax. Read the SALT Alert.

Florida legislation provides significant broad-based tax relief  
Florida enacted budget legislation providing significant broad-based tax relief by permanently adopting the sales tax exemption for certain industrial machinery and equipment purchased by eligible manufacturing businesses and creating a three-day back-to-school sales tax holiday. Read the SALT Alert.

Illinois Department of Revenue amends sales tax regulations on transportation and delivery charges  
The Illinois Department of Revenue amended the retailers’ occupation tax (sales tax) regulation concerning the treatment of transportation and delivery charges to reflect the Illinois Supreme Court’s decision in Kean v. Wal-Mart Stores, Inc. Read the SALT Alert.

Indiana income, sales and property tax legislation enacted
Indiana Gov. Mike Pence signed several bills that change important elements of Indiana income, sales and property tax laws. Changes to the corporation income tax include an updated Internal Revenue Code conformity date, modifications to the intercompany interest addback rules and enactment of a study to determine the potential impact of mandatory unitary combined reporting. Read the SALT Alert.

Alabama Department of Revenue updates regulation on Simplified Sellers Use Tax Remittance Program
The Alabama Department of Revenue has issued amendments to its regulation on the Simplified Sellers Use Tax Remittance Program. The amendments provide additional details on collection, remittance and filing under the program. Read the SALT Alert.

U.S. District Court finds Puerto Rico corporate alternative minimum tax scheme unconstitutional
The U.S. District Court for the District of Puerto Rico recently found subsections of Puerto Rico’s alternative minimum tax statute unconstitutional. Specifically, the court declared subsections of the tax that imposed a tangible-property tax and expenses tax, as well as the related list of exemptions, invalid under both federal constitutional and statutory law. Read the SALT Alert.

Michigan Court of Appeals holds indirect ownership for unitary determinations excludes constructive ownership
The Michigan Court of Appeals held that the language in the “unitary business group” statutory definition requiring that a member “owns or controls, directly or indirectly” more than a 50% interest in the other members refers to ownership through an intermediary and does not include constructive ownership. Read the SALT Alert.

Tennessee letter rulings address application of sales and use tax to services and remotely accessed software
The Tennessee Department of Revenue recently issued two letter rulings on the sales and use tax treatment of services and remotely accessed software. Read the SALT Alert.

Texas enterprise fund changes application and review process
Texas recently revised the application and review process of the Texas enterprise fund to improve transparency. This fund, established in 2003, is a cash grant created to help attract new jobs and investments to the state. Read the SALT Alert.

Louisiana enacts broad range of tax increases during recent special session
In an effort to cure an estimated $2 billion deficit in the FY 2017 budget, the Louisiana legislature passed a number of tax increases during a special session that concluded on March 6, 2016.
Read the SALT Alert.

Virginia Circuit Court denies use of alternative apportionment method for Virginia-based service provider
The Circuit Court of Arlington County, Va., recently denied a taxpayer’s appeal for an income tax refund and the use of an alternative apportionment formula. The taxpayer, a service provider headquartered in Virginia, claimed that a single-sales factor apportionment formula, based on a market-based sales sourcing methodology, more accurately reflected its revenue from Virginia sources than the statutory method. Read the SALT Alert.

Tax webcasts and events

Recent changes in IRS organization and exam practices: How do they affect you? webcast
June 1, 3 p.m. ET
This webcast will discuss 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.

Tax accounting quarterly update: June 2016 webcast
June 16, 3 p.m. ET
Learn about tax developments and issues that can affect your financial statements, including accounting for income and nonincome taxes. We will focus on the financial reporting implications of these developments.

Qualified retirement plan corrections: Basics and new opportunities webcast
June 30, 3 p.m. ET
The webcast will cover the key elements of the IRS’s Employee Plans Compliance Resolution System (EPCRS), including how the EPCRS offers opportunities to reduce correction costs and mitigate risk in the event of an IRS or Department of Labor audit. Sign up now.

Designing long-term incentive plans: best fit and common mistakes webcast
July 14, 3 p.m. ET
This webcast will dive deeply into the design of longer-term incentive plans. Hear our perspective based on our work with public and private companies in the Russell 2000. We will cover best-fit strategies versus market practice, discuss common mistakes in plan design and provide guidance on how to model the impact of various designs for both the corporation and plan participants.

State and local tax midyear update webcast
Aug. 10, 3 p.m. ET
Numerous SALT developments have occurred during the first half of 2016, including the adoption of landmark tax legislation in Delaware, Louisiana and South Dakota. State courts have addressed a wide variety of SALT disputes, including the availability of alternative apportionment, the existence of unitary groups and the legality of sales tax notice and reporting requirements. State tax authorities and the Multistate Tax Commission have been busy promulgating regulations and other guidance interpreting recent corporate and sales tax enactments. Members of Grant Thornton LLP’s SALT practice will discuss these developments, with a view into how they may affect taxpayers’ current and prospective tax filings.

Replay past tax webcasts
The following webcasts are available for replay:

Practical implications of BEPS in the Americas — The base erosion and profit shifting (BEPS) framework developed by the  Organisation for Economic Cooperation and Development 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 discusses the practical implications of BEPS in key jurisdictions in the Americas, including how they are implementing Action 13 (country-by-country reporting).

Tax basis step-up transactions — In most taxable transactions, it's 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 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.

How will global immigration and tax trends affect you?  — Grant Thornton LLP and Fragomen Worldwide, global immigration services leader, have partnered to provide an overview of current trends regarding immigration and tax in key countries that affect companies like yours. We dive into how these recent trends and changes may influence future moves for your organization and global employees.

Indirect tax trends in a digital world — 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 provides an update on how states are evolving in taxing digital goods and services, including a discussion on transactions involving digital currency. In addition, it addresses how the states are applying nexus to these digital service providers.

Global tax attribute tracking: issues and opportunities — Learn about hot topics, recent developments and possible opportunities affecting multinational companies’ global tax attributes. We address topics such as earnings and profits, foreign currency considerations, foreign tax credits and the impact 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 nonincome taxes. We focus on the financial reporting implications of these developments. This is part of our series of quarterly webcasts sponsored by Grant Thornton’s Tax Accounting Risk Advisory Services business line.  

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 services 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 Accounting Risk Advisory Services 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
  • May 5, Bloomberg BNA Weekly State Tax Report, "Businesses Chasing Many ‘Markets' Under State Sourcing Rules," Jamie  Yesnowitz, SALT principal, quoted.
  • May 5, State Tax Today, "Hamer Recommends Tweaking MTC's Draft Market-Based Sourcing Rules," Jamie Yesnowitz quoted.
  • May 3, Bloomberg BNA Daily Tax Report, "Hearing Officer Recommends Revisions to MTC Sourcing Rules," Jamie  Yesnowitz quoted.

Tax professionals

Meet Raymond Melone, Northeast Sales and Use Tax practice leader in the New York office
Raymond Melone is a SALT practice partner based in New York and leader of the Northeast region Sales and Use Tax services. He has extensive sales and use tax experience in Connecticut, Massachusetts, New Jersey, New York and Pennsylvania as well as in many other states.

Raymond has more than 19 years of sales and use and personal property tax experience. He has served clients in many industries including manufacturing, retail, financial services (with a heavy insurance focus), health care, telecommunication, energy and construction. Among his many areas of experience are refund studies, audit representation, managed compliance agreements, sales tax compliance (outsourcing), process improvement reviews, procurement entities, state taxability studies, nexus reviews and voluntary disclosures.

Raymond earned a master’s of accountancy in taxation from Rutgers University and  a BS in business administration from Montclair State University.





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