United States: State And Local Thinking - February 2016

Tax professionals

California clarifies post-apportioned excluded cancellation-of-debt income used to reduce tax attributes
The California Franchise Tax Board has issued a technical advice memorandum addressing the reduction of certain tax attributes in instances when cancellation-of-debt-income (CODI) is excluded from gross income for California purposes. The guidance clarifies that post-apportioned, rather than pre-apportioned, excluded CODI should be used to reduce the tax attributes. Read the SALT Alert.

Oregon Tax Court finds taxpayer properly treated gain from stock sale and income from holding company as nonbusiness income
The Oregon Tax Court recently ruled that gain realized from the sale of a subsidiary's stock and income from a subsidiary holding company were properly characterized as nonbusiness income not subject to apportionment. Read the SALT Alert.

Pennsylvania Commonwealth Court rules Internet provider's outsourced services not subject to sales and use tax
The Commonwealth Court of Pennsylvania ruled that outsourced dial-up services provided by an Internet service provider weren't subject to sales and use tax because they were considered nontaxable Internet access services under Pennsylvania sales and use tax law. The court distinguished this service from taxable telecommunications services because the taxpayer's facility was a point of presence where the end-user's Internet connection began. Read the SALT Alert.

Delaware enacts legislation adopting single sales factor apportionment
Delaware Gov. Jack Markell on Jan. 27 signed legislation, the Delaware Competes Act, which will phase in single sales factor apportionment. The sales factor will become more heavily weighted than the payroll and property factors for taxable periods beginning after Dec. 31, 2016. Read the SALT Alert.

New Jersey enacts legislation allowing conversion of Business Employment Incentive Program grants to tax credits
New Jersey Gov. Chris Christie on Jan. 11 signed bipartisan legislation that allows businesses previously approved for the Business Employment Incentive Program to voluntarily convert grant commitments into tax credits that may be taken against corporation business tax and insurance premiums tax liabilities. Read the SALT Alert.

North Carolina mandates informational reporting of market-based sourcing apportionment calculation
North Carolina Gov. Pat McCrory approved legislation on Sept. 18, 2015, enacting significant changes to the taxation of corporations. One such change requires certain corporate taxpayers to file an additional informational report to provide the state with information to study the impact that market-based sourcing of sales of items other than tangible personal property might have on corporate income tax collections. Read the SALT Alert.

Michigan enacts data center sales and use tax incentives
Michigan Gov. Rick Snyder signed legislation on Dec. 23, 2015, that allows for broad state sales and use tax exemptions for data centers. This new incentive legislation, originally designed to encourage one company to open a data center within the state, has been expanded to include all existing data centers within the state of Michigan, as well as the construction of new data centers. Read the SALT Alert.

SALT outlook, trends and predictions for 2016 
This alert focuses on how Grant Thornton thought 2015 would unfold from a SALT perspective and how these predictions aligned with what actually happened, and includes 10 new predictions on critical SALT issues for the coming year. Read the SALT Alert.

Michigan Department of Treasury issues guidance on claiming use tax refunds for certain cloud computing services
The Michigan Department of Treasury released guidance on Jan. 6 regarding claiming refunds for use tax paid on certain cloud computing services based on Auto-Owners Insurance Co. v. Department of Treasury. Read the SALT Alert.

Michigan manufacturing personal property tax exemption must be filed by Feb. 20
Michigan is providing a personal property tax exemption for eligible manufacturing personal property (EMPP) beginning Dec. 31, 2015. Because Michigan defines EMPP broadly, taxpayers should consider applying for this exemption. Read the SALT Alert.

Tax webcasts and events

Transforming your tax function -- trends, leading practices and CFOs' perspective
Tuesday, March 1, 3 p.m. ET
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 tax business line and Technology Solutions practice will 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. Sign up now.

Executive compensation -- Proxy insights, 2016 regulatory updates and not-for-profits webcast
Thursday, March 3, 3 p.m. ET
This webcast will cover 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. Sign up now.

Understanding India's budget for 2016–17
Wednesday, March 9, 11 a.m. ET
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 will address highlights of the 2016-17 budget, along with major policy initiatives and an overview of the long-awaited goods and service tax. Sign up now.

Tax accounting quarterly update: March 2016 
Thursday, March 17, 3 p.m. ET
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 Accounting and Risk Advisory Services practice. Sign up now.

Replay past tax webcasts

The following webcasts are available for replay:
Understanding the United States' response to OECD-BEPS documentation actions The IRS recently proposed regulations for country-by-country reporting. The regulations don't break new ground, because they largely mirror the OECD's previously published model template. However, under the surface are numerous complex procedural, policy and practical considerations that must be carefully analyzed. Learn about the IRS's proposed requirements, related issues and the possible impact on multinational enterprises. Listen to a non-U.S. viewpoint regarding the proposals and hear about opportunities, strategies and practical considerations. Replay the webcast.

Partnership creation and care with no regretsJoin an important review of economic and tax provisions in partnership and LLC operating agreementsincluding their administration from the perspectives of both the drafting attorney and the accountants who apply and administer those provisions. This presentation identifies and discusses commonly encountered mistakes, oversights and constraints, and their potential consequences, and tips on how to avoid them. Replay the webcast. Replay the webcast.

Significant SALT developments for 2015 and predictions for 2016 webcast  — Efforts to reform SALT regimes and to interpret recently adopted SALT changes through regulatory action have rapidly continued throughout 2015. Taxpayers are focusing on new rules that affect longstanding income and indirect tax filing requirements and sourcing provisions. The impact of the U.S. Supreme Court's decision in Wynne also continues to resonate. Members of Grant Thornton's SALT – National Tax Office discuss significant SALT developments from 2015 and SALT trends expected in 2016. Replay the webcast.

Retail and restaurants: Should you buy into the new repairs safe harbor?  — The remodel/refresh repairs safe harbor for retail stores and restaurants provided in Rev. Proc. 2015-56 offers an approach that may reduce disputes regarding the deductibility or capitalization of remodel and refresh projects. Listen to a discussion of the safe harbor and potential opportunities and issues for retailers, restaurants and their lessors during implementation. Replay the webcast. 

Understanding what the $680 billion tax deal means to your business  — Lawmakers enacted a groundbreaking tax and spending bill in December that makes more than $680 billion in tax changes. Twenty-two popular tax provisions are now permanent, and the bill made important changes to the R&D credit, REIT rules, bonus depreciation, alternative fuel credits, health care reform excise taxes and many other provisions. Replay the webcast to learn what's been made permanent, what's been enhanced and what's next for the tax provisions that are still temporary. Replay the webcast.

Thought leadership from our State and Local Tax professionals

Publications

  • Feb. 19,Daily Tax Report, "What Will Future of State Tax Law Look Like Without Scalia?" SALT Principal Jamie Yesnowitz quoted.
  • State Tax Today, "Practitioners Critique FASB's Government Assistance Disclosure Proposal," Jamie Yesnowitz quoted.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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