2020 State Tax Compliance The Only Thing That Hasn’t Changed is the Names of the States_

2020 State Tax Compliance – The Only Thing That Hasn’t Changed is the Names of the States!

I have always been a “state guy” so when I worked in the corporate world, I used to tease our federal tax folks about how easy their job was…one code…one set of rules and regulations…”easy peasy.” They knew I was kidding as I fully understood how difficult their job was. But to my point, let’s look back to the 2017 Federal Tax Cuts and Jobs Act (“TCJA”). From a federal perspective, although there was much uncertainty,...

Foreign Entities Doing Business in the U.S. and Domestic Start-ups: Are you “Wayfair-aware?”

Foreign Entities Doing Business in the U.S. and Domestic Start-ups: Are you “Wayfair-aware?”

Setting the Stage Foreign Direct Investment benefits the United States as foreign companies build new manufacturing and research facilities, creating employment opportunities across the country.  Foreign companies are drawn to the U.S. by its large trading markets, educated workforce and stable political and business environments.  However, a trap for the unwary exists in the form of a disjointed and mostly-unaffiliated U.S. state and local tax regime; over 10,000 distinct tax jurisdictions exist within the U.S., each...

This Little Piggy Goes To Market

This Little Piggy Goes To Market

For three generations (rock and roll, disco and new wave) the sourcing of services for state income tax apportionment didn’t get a whole lot of attention.  Sure, there were rules included in UDITPA (Uniform Division of Income for Tax Purposes Act) that applied to services, but that was just catch-all language for anything “other than tangible personnel property.”  And heck, Congress didn’t even address services when it passed P.L. 86-272, maybe the only law they...

Some U.S. SaaS Companies now Subject to new Canadian “Economic Nexus” Sales Tax Compliance

Some U.S. SaaS Companies now Subject to new Canadian “Economic Nexus” Sales Tax Compliance

A cooling wind from the North Country may have been the fervent wish of many as relief from the heat waves blasting much of the U.S. this summer. Alas, only the cold, hard fact of yet another sales tax compliance burden has blown in to chill the bones of certain U.S. software companies selling to our neighbors in the north.This change comes just as companies are beginning to recover from the effects of U.S. sales...

Wayfair and Factor-Based Nexus for Income Tax: The New Two-Step

Wayfair and Factor-Based Nexus for Income Tax: The New Two-Step

You’ve likely heard the expression “waiting for the other shoe to drop.”  By some accounts, the origin of this phrase can be traced to early 20th century tenement buildings where bedrooms on one story were located directly atop those on the lower story.  You knew when your upstairs neighbor came home because you could hear her shoe drop.  This left you waiting for the sound from the drop of the other shoe.    So it is...

The Global Minimum Tax: Will US Multistate Tax Conventions Apply?

A quick Google search for “Global Minimum Tax” brings up a host of news articles passionately advocating either for or against the proposal.  In fact, a casual consumer of news could be forgiven for thinking that the global minimum tax is synonymous with the Biden Administration’s Made in America tax plan. The goal of a global minimum tax provision is to make American companies and workers more competitive by eliminating incentives to offshore investment and profit...

Massachusetts Accelerated Sales Tax Payments

Massachusetts Governor Baker signed HB 5164 into law in December 2020 with critical process and timing changes for certain monthly sales and use, room occupancy and meals tax filers which take effect on April 1, 2021.Specifically, filers of these monthly returns whose tax liabilities in the prior calendar year (i.e. 2020) exceed $150,000 must now remit such taxes on a “split” schedule: Tax collected on sales made in the first 21 days of the month to...

Increasing Cash Reserves During Coronavirus Crisis

ALERT: Although much of the focus has been on the effect of the COVID-19 crisis on families and small businesses, many provisions of the Coronavirus Aid, Relief, and Economic Security (CARES) Act are directed towards large corporate taxpayers. A combination of these provisions and age-old tax strategy could result in significantly increased cash flow, something desperately needed as the crisis quickly depletes corporate reserves. Download our summary for more details.Download ...

I Have a (Tax) Plan for That: The Imminent Return of Multistate Tax Planning

The days of naked Delaware holding companies and royalties paid for giraffes named Geoffrey may be long gone but, thanks to the Tax Cuts and Jobs Act of 2017, multistate tax planning is back on the minds of corporate CFOs.  During the 1990s, variations in the tax laws and policies among states imposing corporate income taxes inspired practitioners to present a smorgasbord of plans to restructure multistate organizations with the intent of exploiting these differences...

GAGNONtax Super Bowl and 2019 Tax Predictions

Bill Gagnon, President: Tax Reform will result in a second year of guidance and law changes (or lack thereof), creating even more complexity and uncertainty in the determination of state taxable income; and where there is uncertainty, there is a need for additional reserves. Further, expect a trend toward changes in entity form once individuals and small businesses have the advantage of seeing the “with and without” Tax Reform calculations associated with their 2018 earnings. ...