Forecasting this year’s SALT issues
The year 2018 was quite an important one in state and local tax law, dominated by the Tax Cuts and Jobs Act reforms and the U.S. Supreme Court’s South Dakota v. Wayfair, Inc. To help your business plan for another year of tax law changes, Grant Thornton offers 10 issues we believe will dominate SALT legislative actions in 2019 in Forecasting what lies ahead for 2019 in state and local tax news.
Look ahead to 2019’s trends here
SALT top stories of 2018
The impact of tax reform and Wayfair alone made 2018 a landmark year for state and local tax news. Yet there was so much more. Grant Thornton’s SALT top stories for 2018 reviews the events and developments that will have make a difference for your business.
Read our year-end wrap-up here
Keep up with the latest state and local tax developments by reading our SALT Alerts. They are labeled by state so that you can easily find the ones that apply to you. The following are the most recent alerts:
MTC OK’s statute on reporting audit adjustments
During a special meeting on Jan. 24, 2019, the Multistate Tax Commission (MTC) approved a model statute for reporting adjustments to federal taxable income and federal partnership audit adjustments.
California tax ruling clarifies income classification
The California Franchise Tax Board (“FTB”) recently issued a Chief Counsel Ruling determining that a taxpayer that predominantly engages in servicing mortgages is not a “financial corporation” because it does not derive more than 50% of its gross income from dealings in money or moneyed capital.
D.C. enacts remote seller sales tax provisions
On Dec. 31, 2018, the District of Columbia enacted legislation requiring certain remote sellers and marketplace facilitators to collect and remit sales taxes. This legislation was passed in response to the U.S. Supreme Court’s South Dakota v. Wayfair, Inc.
Mississippi ruling upholds statute of limitations for amended returns
The Mississippi Supreme Court affirmed a decision upholding the three-year statute of limitations period for filing amended Mississippi income tax returns. The statute prevented the taxpayers from filing an amended return to claim a credit for income taxes paid to another state, but the Court determined that any discrimination against interstate commerce alleged by the taxpayers was merely incidental to the state’s otherwise nondiscriminatory statute of limitations.
New Jersey tax director’s apportionment formula use ruled improper
On Dec. 5, 2018, the New Jersey Tax Court ruled to strike the revised Corporation Business Tax (“CBT”) assessment issued by the director of the New Jersey Division of Taxation that proposed to use a five-factor apportionment formula for the taxpayer’s 2004-2010 tax years.
New York declares remote seller economic nexus standard
On Jan. 15, 2019, the New York Department of Taxation and Finance issued Important Notice N-19-1, declaring that remote sellers without a physical presence in New York State but having more than $300,000 in sales of tangible personal property into the state and more than 100 transactions in the state are now required to register as a vendor and collect and remit sales tax.
Ohio Supreme Court: No ‘use tax’ for Reds on giveaways
On Nov. 21, 2018, the Ohio Supreme Court concluded that the Cincinnati Reds baseball team did not have to pay use tax on promotional giveaway items, such as bobbleheads. Reversing the decision of the Ohio Board of Tax Appeals (BTA), the Court treated the promotional giveaways as components of sales eligible for the resale exemption from use tax.
Ohio ruling: Employment services subject to sales and use tax
On Dec. 12, 2018, the Ohio Supreme Court revisited the taxability of employment services. The Court confirmed that for employment services to be subject to the Ohio sales and use tax, the personnel supplied by the service provider must perform work under the supervision or control of someone other than the provider of the personnel.
Tennessee: Apportionment allowed due to taxpayer’s out-of-state incorporation
On Dec. 20, 2018, the Tennessee Court of Appeals held that a taxpayer was entitled to apportion its income because it was incorporated in another state. The fact that the taxpayer was incorporated in Florida established substantial nexus in another state for purposes of the Commerce Clause of the U.S. Constitution.