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Avoiding State Income Tax Nexus and Apportionment Surprises

AVOIDING STATE INCOME TAX NEXUS AND APPORTIONMENT SURPRISES

Cost Free
Presentation Length 1.0 hour

Recorded DateMay 21, 2020
CPE:Not available
(archived webinars do not offer CPE credits)
Subject AreaTaxes (Sales Tax)
Course LevelBasic
Series: Taxes, Sales Tax
Course Description

As states scramble to increase revenues, out-of-state businesses are an easy target. States are being more aggressive in imposing nexus and in calculating how much of a business’s income is taxable. For years states have been trying to find ways to force businesses to collect sales tax as well as pay gross receipts, franchise, and income taxes. Because of the US Supreme Court’s position if South Dakota v. Wayfair, we have seen dramatic changes in how nexus is established for sales tax with the imposition of economic thresholds. Many states have been using similar thresholds for years in imposing income tax nexus and that number of states is increasing.

In addition to expanded income tax nexus, states are adjusting apportionment formulas to increase the portion of out-of-state business income that is taxable. Because various states use different formulas businesses can end up paying state tax on more than 100% of their income. Additionally, throwback and throw out rules can create unexpected tax burdens. Since states are expanding their taxing jurisdictions and power, it’s vital to advise your company or clients on the delicate issues of nexus. This seminar will help you to determine when a company must pay income taxes. This webinar will focus on making you aware of the current Income tax nexus and apportionment environment, how to avoid surprises, and what to expect in the future.


Learning Objectives:


  • Understand how to properly assign service sales using the market based or the cost-of-performance/income-producing-activity approachs.

  • Understand how throw out and throw back requirement impact your apportionment calculation.

  • Understand the processes used to identify income that would be allocated versus apportioned.

  • Understand the interplay between physical presence nexus and economic nexus.

  • Understand Public Law 86-272 nexus protections and the limits of that protection.

PLEASE NOTE: ARCHIVED WEBINARS DO NOT QUALIFY FOR CPE
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Jack provides only on state and local tax services. He uses his deep knowledge and broad experience to help taxpayers and other CPA firms.

I have worked exclusively in state and local taxation for 27 years, 18 in public accounting and nine with the Washington State Department of Revenue. I have very deep state tax knowledge and have assisted clients with issues in all 50 states and the District of Columbia. 

I have been able to consistently provide my clients with high quality, high value services by developing a deep understanding of their businesses.  Educating my clients is a key focus. My goal is to give clients the tools to identify state and local tax issues and opportunities as their business evolves.  Educating fellow accountants is also a passion. I am regularly asked to be a speaker at various tax seminars.

I am an avid runner and I am actively involved with the North Carolina Association of CPAs.

About Our Presenter

Schmolllogo
Schmoll CPA PLLC is the firm of Jack Schmoll, CPA. Jack uses his deep knowledge and broad experience to help taxpayers and other CPA firms.