In an unanticipated response to taxpayer requests, the Puerto Rico Treasury Department (“PRTD”) has removed administrative hurdles to deduct 100 percent of expenses paid to related parties. Section 1033.17(a)(17) of the Puerto Rican Internal Revenue Code of 2011 (“PRIRC”) previously provided that taxpayers could deduct only 49 percent of the expenses paid to affiliates when computing net income for a Puerto Rican taxpayer.
Bennett Thrasher and Morris, Manning & Martin recently hosted their “New Tax Considerations for the Technology Industry” webinar. During the event, a variety of financial topics relevant to technology companies were discussed, including federal tax proposals, executive compensation tax proposals, international considerations and state and local tax considerations.
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.
As part of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Congress provided the Employee Retention Credit (“ERC”), which provides a refundable credit by means of reducing payroll tax liability for employers who retained payroll throughout the pandemic.
Financial reporting for gig workers (temporary, flexible workers such as independent contractors and freelancers instead of full-time employees) has always been complicated and recent legislation under The American Rescue Plan Act of 2021 (ARPA) will continue this complexity and have a significant impact on gig economy workers and the companies and platforms who host them.
Recent estimates by the Internal Revenue Service (IRS) indicate that nearly $1 trillion in legally owed taxes go uncollected each year, making addressing this gap a major focus for both the IRS and Biden administration. In fact, it has been proposed by the current administration to increase the IRS’s budget by $80 billion over the next 10 years.
More than seven weeks after the American Rescue Plan Act (ARPA) was signed into law authorizing the $28.6 billion Restaurant Revitalization Fund (RRF), access to this much-anticipated grant program is now within sight. The U.S. Small Business Administration’s (SBA) RRF Application Portal is set to open for account registration on Friday, April 30, 2021 at 9:00 AM EDT.
The IRS continues to increase their scrutiny of cryptocurrency and virtual currency activity in an effort to eliminate widespread noncompliance. The prioritization of virtual currency above other current tax issues reflects the scale of noncompliance and potential revenue collection opportunities. This is most evident in the annual revisions to 2020 Form 1040, where The Virtual Currency Question has been moved to the first page and is prominently featured—front & center.
On Tuesday, March 30, 2021, the Paycheck Protection Program (PPP) application deadline was officially extended from March 31, 2021 until May 31, 2021 via President Biden’s signing of the PPP Extension Act of 2021 (H.R. 1799).
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.