Articles Posted in States

Posted
by

(This article was originally published by Law360 on January 15, 2019.)

The growing tension between government promises of transparency and taxpayers’ right to confidentiality is likely to continue in 2019. Although the spirit of government transparency to enhance public access is well-meaning, this lofty goal often conflicts with taxpayer confidentiality and the associated expectation of privacy. Striking the appropriate balance between these two often conflicting positions can prove difficult, as highlighted by two recent developments, namely, the Pennsylvania Board of Finance and Revenue’s push to record and publish hearings on its website and the California Office of Tax Appeals’ attempts to address concerns regarding closed hearings and sealed records.

Continue Reading ›

Posted
by

(This article originally appeared in the Journal of Multistate Taxation and Incentives, Vol. 28, No. 9.)

The question of whether or not an individual is a resident of a particular state has always been an important issue in the area of state personal income taxation. California, because of its top marginal personal income tax rate of 13.3 percent1, and the large number of high-wealth individuals living in the state, always has been one of the most significant jurisdictions for this issue. Indeed, California, at 13.3 percent, currently has the highest personal income tax rate of any state.2 The significance of the high California rate, and the residency issue in general, recently has taken on added significance as a result of two federal tax law changes.

Continue Reading ›

Posted
by

In “California Office of Tax Appeals Rejects Franchise Tax Board’s Broad Interpretation of California’s “Doing Business” Standard,” the SALT team examines the board’s rejection of the California Franchise Tax Board’s (FTB) extremely narrow interpretation and application of Swart Enterprises, Inc. v. Franchise Tax Board, involving California’s “doing business” standard.

Posted
by and

(This article was originally published by Law360 on August 24, 2018.)

California is the latest to join a growing list of states to ban local taxes targeted at sweetened beverages or similar sugar taxes. California Assembly Bill 1838 signed into law on June 28, 2018, imposes a 13-year ban on any new local taxes on carbonated and noncarbonated beverages and other “groceries.”1 Arizona and Michigan have done the same and three more states, Oregon, Pennsylvania and Washington are considering similar bans. The public policy debates behind these recent legislative enactments are no different than the all too familiar “sin taxes” that harken of decades, if not centuries past.

Aside from the inherent differences between sugary groceries and the likes of tobacco, alcohol or gambling, sweetened beverage taxes imposed at local levels pose serious compliance issues for distributors and retailers. The recent popularity of these taxes at the local level not only has the beverage and retail industry fired up over the compliance issues, but citizens are beginning to recognize the paternalistic nature of these taxes and their regressive effects on the communities.

Continue Reading ›

Posted
by

(This article was originally published by Bloomberg’s Daily Tax Report: State.)

Recent developments in several key states, including Illinois, New York, Minnesota, and Oregon, will impact many captive insurance companies. These states are moving to include certain captives in corporate income tax combined returns with parents and affiliates. The effect of combination is to tax the captives’ investment income and to disallow the deductions for premiums paid to the captives. New York and Minnesota are also using the federal definitions of “insurance” to determine whether captive insurance companies are combinable and subject to corporate income tax.

Continue Reading ›

Posted
by and

(This article was originally published by Law360.)

California’s A.B. 2731 seeks to accomplish what the federal Tax Cuts and Jobs Act did not, namely, to close the carried interest “loophole.” Currently making its way through state assembly committees, AB 2731 would impose an additional 17 percent tax on interest income derived from investment management services on taxpayers subject to California’s personal income tax law.

Continue Reading ›