In the early stages of the pandemic, state revenue forecasts anticipated losses of approximately $370 million (a decrease of over 40%). Amidst these changes, states looked to evolve their existing tax laws to bridge the anticipated budgetary shortfalls.
Governor Kemp ended Georgia Small Business Week by signing HB 1058, which permits affiliated corporations in Georgia to elect filing a consolidated income tax return for tax years beginning on or after January 1, 2023.
One of the more controversial provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) is the $10,000 cap on individual taxpayers’ federal deduction for state and local taxes paid, often referred to as the SALT cap. In the aftermath of this legislation, states began crafting workarounds to assist certain individual taxpayers – those who are owners of a “pass-through entity” (PTE) – in bypassing the SALT cap on their federal return.
After the economic difficulties of the COVID-19 pandemic, it is no wonder that governments are trying to find new options to stimulate economies, get people back to work and keep businesses open. This process is creating pressure for more tax revenue, specifically state and local taxes (SALT). To address these issues, states are revising their rules and policies for taxpayer compliance and considering new tax options.
DiAndria Green, a Senior Manager in Bennett Thrasher’s State & Local Tax practice, was recently interviewed by the Sales Tax Institute and featured on its Women to Watch in Sales Tax video series. During the interview, DiAndria had the opportunity to speak to the sales tax work she does at Bennett Thrasher and highlight the innovative solutions the firm’s practitioners offer our clients related to sales and use tax.
On April 19, 2021, Governor Cuomo signed into lawS2509C/A3009C, the New York FY 2021-2022 State Budget Bill (“Bill”), which includes provisions for tax rate changes for individuals and corporations, a new elective Pass-through Entity Tax, and clarity on credits with a remote workforce during the COVID-19 pandemic.
It has been nearly three years since the landmark decision of South Dakota v. Wayfair, Inc. (“Wayfair”), which upheld states’ adoption of sales tax economic nexus laws. Notably, the Court partially hinged its ruling on South Dakota’s small seller safe harbor thresholds, which limited the state’s ability to assert sales tax nexus for remote sellers that had more than $100,000 in South Dakota-sourced receipts or 200 or more transactions with South Dakota-based customers.
Sales tax laws are constantly evolving and typically vary by state, making it difficult to stay on top of their complexities and ensure compliance. The construction industry in particular must have a strong grasp on these rules though, as it’s common for contractors to be managing projects and materials across state lines.
Bennett Thrasher recently collaborated with Sovos, a tax software solution provider, on a webinar discussing what software and digital goods suppliers need to know about the sales tax.
The global pandemic has catalyzed the use of remote workforces. As previously discussed in this article, there are challenges and intricacies for employer nexus and employee withholding, and many states have continued to expand and extend relief granted to companies with employees working remotely due to the COVID-19 pandemic.