24 July 2018 State and Local Tax Weekly for July 13 Ernst & Young's State and Local Tax Weekly newsletter for July 13 is now available. Prepared by Ernst & Young's State and Local Taxation group, this weekly update summarizes important news, cases, and other developments in U.S. state and local taxation. New Jersey completely overhauls its Corporation Business Tax Act, modifies its Gross Income Tax, enacts an amnesty program On July 1, 2018, New Jersey Governor Phil Murphy signed into law AB 4202 / SB 2746 which makes sweeping changes to the state's Corporation Business Tax (CBT) Act and results in possibly the most significant overhaul of the CBT since its first enactment in 1945. One of the most significant changes is that New Jersey no longer is a separate return state; starting in 2019 New Jersey mandates water's edge combined reporting (with a taxpayer option for either a worldwide or an affiliated group election). In addition to combined reporting, the new law does the following: — Overhauls the state's net operating loss (NOL) carryforward rules to include a conversion of pre-Law unapportioned NOLs to the new combined reporting regime and a post-apportioned NOL — Imposes a temporary "surtax" (actually a special supplemental tax rate) that for taxpayers with more than $1 million of income results in a state corporate tax rate of 11.5%, the second highest corporate tax rate in the US at 11.5% — Imposes limitations on the deductibility of dividends (affecting the state's dividend received deduction rules), some of which are retroactive to the 2017 tax year — Decouples the CBT from many of the provisions of the federal Tax Cuts and Jobs Act but retroactively couples to those that will result in increased state tax revenues The changes have various effective dates, some of which will have retroactive effect. Thus, due to the law changes, the 2017 CBT-100 forms are obsolete and any 2017 CBT-100 filings already submitted will likely require amendment to conform to the law's many changes to the CBT Act. See Tax Alert 2018-1342 for an in-depth discussion of the changes made to the CBT Act. On the same day, Governor Murphy also signed into law AB 3088/SB 64, 1515 and 2407, which modifies the New Jersey Gross Income Tax (GIT) Act (i.e., New Jersey's personal income tax) by increasing the top marginal GIT rate to 10.75% (on those reporting $5 million or more of income) together with corresponding increases in the employer withholding rates and imposing a contingent 17% tax on income from carried interest, provided certain other states in the Northeastern US enact a similar state tax. The ostensible purposes of the tax on carried interests is to complete the tax policy argument that such income should be taxable at the same rate as ordinary income for federal income tax purposes (that is, such income is taxable as capital gains at a rate of 20% instead of the highest marginal federal tax rate of 37%). For more on these developments, see Tax Alert 2018-1410. AB 3438/SB 1841, also enacted on July 1, 2018, authorizes the New Jersey Director of the Division of Taxation (DOT) to initiate a tax amnesty program for all state taxes for up to 90 days, concluding no later than Jan. 15, 2019. The terms of the amnesty program require taxpayers with delinquent taxes attributable to returns due from Feb. 1, 2009 through Sept. 1, 2017, to pay the delinquent tax, plus one-half of interest calculated through Nov. 1, 2018. The amnesty relieves participants of penalties, penalty collection costs, recovery fees and one-half of interest upon full payment, but taxpayers will still be required to pay any civil fraud or criminal penalties, if assessed. Amnesty is NOT open to taxpayers under criminal investigation or charge for any state tax matter, as certified by a county prosecutor or the Attorney General to the Director of the DOT. For more information on this development, see Tax Alert 2018-1390. On Thursday, Aug. 2, 2018 from 1:00 - 2:00 p.m. EDT (10:00 - 11.00 a.m. PDT), Ernst & Young LLP will host a webcast to discuss these changes. Click here to register for this webcast. Multistate: A summary of the significant legislative, administrative and judicial actions that affected state and local income/franchise taxes during the second quarter of 2018 is provided in Tax Alert 2018-1382. Alabama: The Alabama Department of Revenue (Department) issued additional guidance for taxpayers subject to the Transition Tax under IRC §965, including examples of when the taxpayers do and do not file as part of a federal consolidated group. To assist taxpayers subject to this tax, the Department created a worksheet, which must be attached to the return, to assist taxpayers is computing the deductible portion of the Transition Tax paid or accrued on IRC §965 income. Ala. Dept. of Rev., NOTICE: Additional Guidance for Corporate Taxpayers subject to the IRC § 965 (June 22, 2018). Georgia: The Georgia Department of Revenue (Department) issued guidance on the exclusion for dividends from sources outside the US under Ga. Code §48-7-21. The Department determined that only federal C corporations are allowed the exclusion for dividends from sources outside the US as determined by O.C.G.A. §48-7-21(b)(8)(A). An S corporation that is considered a C corporation for Georgia purposes is not allowed the exclusion as the income is separately stated and is combined to pay the tax at the entity level. The Department further advised that there are no deferral payment options similar to those available under IRC §965(h) or (i) and that Georgia does not recognize the IRC §962 individual taxpayer election to pay tax on the income as if the income is received by a C corporation. While Georgia adopts the federal starting point for computing income, there are no comparable provisions in Georgia for how tax is paid. The guidance includes a chart on the taxability of income from IRC §965, (c), (h) and (i) and IRC §962. Ga. Dept. of Rev., Policy Bulletin IT 2018-01 (June 26, 2018). Louisiana: New law (Act 4) clarifies the applicability of limits on corporate income tax exclusions and deductions enacted in 2015 (Act 123, Laws 2015). Effective July 1, 2015 through June 30, 2018, Act 123 limits the amount of certain deductions and exclusions corporate income taxpayers can exclude or deduct to 72% of their taxable income (from 100%), including deductions for dividends received, among other items. Effective July 1, 2018, these limitations expire and the full 100% exclusion and deduction for all of these items is reinstated. Act 4 makes clear that this limit applies to taxable years beginning during calendar years 2015, 2016 and 2017, regardless of the date on which the original or any amended return for these periods is filed. Act 4 further provides that any portion of an exclusion or deduction disallowed under the Act 123 exclusion or deduction limitations on a return filed on or after July 1, 2015 cannot be claimed or allowed as an exclusion or deduction under the law that will be in effect on and after July 1, 2018, on an amended return for the same taxable period filed on or after July 1, 2018. Based on Act 4, it is clear that the Louisiana dividends received deduction limitation of 72% will apply to amounts deemed received under the commonly known "transition tax" applicable to post-1986 earnings and profits of foreign subsidiaries enacted under the Tax Cuts and Jobs Act (P.L. 115-97) (TCJA) and codified at IRC §965(a) (including the corresponding deduction set forth in IRC §965(c)) for returns filed for the 2017 year regardless of when those returns are filed. La. Laws 2018 (Second Extraordinary Session), Act 4 (HB 13), signed by the governor on June 12, 2018. For more on this development, see Tax Alert 2018-1361. Missouri: New law (HB 2540) decreases the individual income tax rate, eliminates personal and dependent exemptions, and phases out of the federal income tax deduction. As announced by Missouri State Treasurer Eric Schmitt, the maximum individual income tax rate was scheduled to decrease to 5.8% for calendar year 2019. HB 2540 reduces the scheduled maximum income tax rate by 0.4% for calendar year 2019, reducing the highest rate to 5.4%. HB 2540 also will eliminate the personal and dependent deductions as these deductions were eliminated from the Internal Revenue Code. In addition, HB 2540 allows the business income deduction to increase in 5% increments each year the revenue trigger is achieved until it reaches a maximum of 20% (formerly 25%); however, the offsetting rate reductions are expected to mitigate the impact of lowering the maximum deduction allowed. Lastly, HB 2540 phases out the federal income tax deduction for individuals. The percentage of federal income tax that continues to be deductible for tax years beginning on or after Jan. 1, 2019 is based on the amount of Missouri adjusted gross income: (1) $25,000 or less - 35%; (2) $25,001 to $50,000 - 25%; (3) $50,001 to $100,000 - 15%; (4) $100,001 to $125,000 - 5%; and (5) $125,001 or more - no deduction is allowed. The federal income tax deduction may not exceed $5,000 for single taxpayer returns and $10,000 for joint returns consistent with current law but for the new phase-outs described above. Mo. Laws 2018, HB 2540, signed by the governor on July 12, 2018. Montana: Proposed "New Rule 1" would provide that the deduction allowed under IRC §199A is not allowed in determining Montana net income. A public hearing will be held on July 23, 2018. Mont. Dept. of Rev., Proposed "New Rule 1" (MAR Notice No. 42-2-995 June 22, 2018). New Jersey: In Kraft Foods Global, Inc. II, 1 the New Jersey Superior Court, Appellate Division (the appellate division), affirmed the New Jersey Tax Court's decision in Kraft Foods Global, Inc. I, 2 disallowing a taxpayer's deduction for related-party interest expense for New Jersey Corporation Business Tax (CBT) purposes. The New Jersey courts have now issued four decisions on interest expense addback cases: Two constituted taxpayer victories and two were taxpayer losses.3 A reading of each decision demonstrates that each respective ruling was heavily dependent on the taxpayer's particular facts and circumstances. If a taxpayer can distinguish itself from the facts and circumstances described in the Kraft rulings, it may be still be entitled to claim an exception to the interest expense addback rule. For more on this development, see Tax Alert 2018-1366. North Carolina: The North Carolina Supreme Court recently ruled in Kaestner 1992 Family Trust that it was unconstitutional for the state to tax a trust whose only connection to the state was the residence of the beneficiary. Kaestner 1992 Family Trust v. N.C. Dept. of Rev., No. 307PA15-2 (N.C. S.Ct. June 8, 2018). For more on this development, see Tax Alert 2018-1376. North Carolina: New law (SB 99) (the Bill) updates North Carolina's conformity date reference to the IRC to Feb. 9, 2018. This change means that North Carolina's tax laws conform to the changes made to the IRC by the Tax Cuts and Jobs Act (P.L. 115-97) (TCJA) and the Bipartisan Budget Act of 2018 (P.L. 115-123) to the extent the state follows federal tax provisions. Under the Bill, North Carolina's tax laws will specifically decouple from the following TCJA provisions: (1) transition tax — N.C.G.S. §105-130.5 is amended to include a subtraction modification for any amount included in federal taxable income under IRC §965 and an addition modification for the amount deducted under IRC §965(c); (2) Global intangible low-taxed income (GILTI) — N.C.G.S. §105-130.5 is amended to include a subtraction modification for any amount included in federal taxable income under IRC Section 951A, applicable to tax years beginning on or after Jan. 1, 2018; (3) foreign derived intangible income (FDII) — N.C.G.S. §105-130.5 is amended to include an addition modification for the amount deducted under IRC §250, applicable to tax years beginning on or after Jan. 1, 2018; and (4) opportunity zones — N.C.G.S. §105-130.5 is amended to decouple from the federal provisions that defer and exclude gains from the sale of assets invested in Opportunity Funds, applicable to tax years beginning on or after Jan. 1, 2018. Provisions of SB 99 also repeals the addback for the domestic production activities deduction under IRC §199, which was repealed by the TCJA, and decouples North Carolina's individual income tax filing requirement from the federal filing requirement. The provision repealing the addback for the IRC §199 domestic production activities deduction applies to tax years beginning on or after Jan. 1, 2018. N.C. Laws 2018, SB 99, enacted over governor's veto on June 12, 2018. For addition tax changes in SB 99, see Tax Alert 2018-1429. Oregon: New rule (Rule 150-317-0651) prescribes the method for taxpayers to compute the repatriation tax credit. The credit is allowed for tax years beginning on or after Jan. 1, 2017 and before Jan. 1, 2018, and it equals the lesser of the amount of Oregon tax for the 2017 tax year attributable to the 965 mandatory repatriation or the total amount of Oregon tax for the 2014, 2015 and 2016 tax years attributable to the addition required under the then applicable tax haven laws. The new rule includes examples. Ore. Dept. of Rev., Rule 150-317-0651 (filed June 26, 2018). Hawaii: New law (SB 2514) expands the "engaging in business in the state" provision for General Excise Tax (GET) purposes to include an economic nexus standard. Under the revised provisions, a person is engaging in business in Hawaii if in the current or immediately preceding calendar year (1) has more than $100,000 in gross income from sales to Hawaii customers or (2) engages in 200 or more separate transactions, involving the sale of tangible personal property delivered in the state, services used or consumed in the state, or intangible property used in the state. The new provision took effect July 1, 2018. Further, in revised Announcement 2018-10 (July 10, 2018), the Hawaii Department of Revenue (HI DOR) made clear that even though SB 2514 provides that the economic nexus provisions apply to taxable years beginning after Dec. 31, 2017, it will not retroactively administer these provisions. The HI DOR further advised taxpayers who meet the $100,000 or 200-transaction threshold in 2017 or 2018 are not required to remit GET for the period Jan. 1, 2018 through June 30, 2018. Haw. Laws 2018, Act 41 (SB 2514), signed by the governor June 12, 2018. Louisiana: New law (HB 17) expands the state's sales and use tax nexus provisions to include an economic and transaction doing business threshold. The definition of dealer is amended to include any non-physically present person who sells for delivery in Louisiana tangible personal property, electronically transferred products, or services (collectively "goods"), if during the previous or current calendar year either (1) has gross revenue from sales of such goods in excess of $100,000 or (2) sold such goods in 200 or more separate transactions. Nevertheless, a person that does not have a physical presence in the state can voluntarily register for and collect state and local sales and use tax as a dealer, even if it does not meet the new thresholds. HB 17 took effect June 12, 2018, but the taxable period for which these provisions will begin to apply has not yet been set. The Louisiana Sales and Use Tax Commission for Remote Sellers will provide additional information on this development. La. Laws 2018 (2nd Extraordinary Session), Act 5 (HB 17), signed by the governor June 12, 2018. New Jersey: New law (AB 4061) starting Oct. 1, 2018 imposes transportation-related fees for customers ordering rides that begin and end in the state through "transportation network companies" (TNC). A TNC is defined as a corporation, partnership, sole proprietorship, or other entity that is registered as a business in New Jersey or operates in the state and uses a digital network to connect a TNC rider to a TNC driver to provide a prearranged ride. Entities arranging non-emergency medical transportation in which Medicare or Medicaid funding is involved are excluded from the definition of TNC. The fee for a single rider will be $0.50 for every ride originating and terminating within the state, while the fee for a shared ride will be $0.25 for each rider. Rides beginning and ending in counties with fewer than 200,000 residents are exempt. N.J. Laws 2018, P.L. 2018, c. 47 (AB 4061), signed by the governor on July 1, 2018. For more on this development, see Tax Alert 2018-1424. New Jersey: New law (AB 1753) starting Oct. 1, 2018 imposes a total combined hotel fee of 5%, plus New Jersey sales and use tax, and any other local hotel or similar taxes, on the rent for every occupancy of a transient accommodation in the state. AB 1753 defines "transient accommodations" a room, group of rooms, or other living or other sleeping space for the lodging of occupants, including residences or buildings used as residences. Transient accommodations do not include: hotel or hotel rooms, a room or group of rooms used as a place of assembly, a dormitory or similar residential facility of a school, hospital, nursing home, campsite, cabin, etc. Furnished and unfurnished private residential property are not considered to be transient accommodations where no maid service, room service, linen changing service, or other common hotel services are made available by the lessor and where the keys to the residential property, whether physical key, access to a keyless locking mechanism, or other means of physical ingress to the property, are provided to the lessee at the location of an offsite real estate broker licensed by the New Jersey Real Estate Commission, or the lease of real property is for a term of at least 90 days. Further, AB 1753 defines a "transient space marketplace" as an online marketplace in which a person may offer transient accommodations or hotel rooms to individuals (e.g., home sharing). The marketplace allows transient accommodations or hotel rooms to be advertised or listed in exchange for consideration or provides a means for a customer to arrange for the occupancy of the transient accommodation or hotel room in exchange for consideration. N.J. Laws 2018, P.L. 2018, c. 49 (AB 1753), signed by the governor on July 1, 2018. For more on this development, see Tax Alert 2018-1424. North Carolina: A retailer's sales of assisted wound care and closure system to medical facilities for use with prescription-bearing patients are subject to North Carolina sales and use tax because such sales are not considered to be sales of durable medical equipment and durable medical supplies on a prescription. Rather, the facilities are deemed to be the consumers of the product, which they purchases without prescription to provide medical services to the patients. The retailer's sales, however, will qualify for the exemption when the assisted wound care and closure system are sold or leased directly to prescription-bearing patients. N.C. Dept. of Rev., Private Letter Ruling SUPLR 2018–0012 (May 29, 2018). Delaware: New law (HB 170) establishes the Angel Investor Job Creation and Innovation Act refundable income tax credit. Under the credit terms, a qualified investor or qualified fund is eligible for a credit equal to 25% of a qualified investment in a qualified small business (up to $250,000 for joint filing couples or $125,000 for individual filers), for any calendar year. A qualified investor or qualified fund must maintain the investment for up to 180 days before claiming the credit, and then must keep the investment for at least three years or otherwise must repay the credit (subject to several exceptions). The maximum credit amount that can be approved for any one qualified small business is $500,000, or $5 million in the aggregate for each calendar year beginning after Dec. 31, 2018 and before Jan. 1, 2024. Credits will be allocated in the order that applications are received. A credit expires if it is not reflected on a timely filed tax return within three years of the date on which the final tax credit certificate was issued. Credits may be revoked if the state determines that a qualified investor or qualified fund did not meet the three-year holding period requirement. HB 170 takes effect for qualified investments made in calendar years beginning after Dec. 31, 2018 and claimed on returns filed after Dec. 31, 2019. It expires for tax years beginning on or after Jan. 1, 2022. Del. Laws 2018, HB 170, signed by the governor on May 24, 2018. Texas: The Texas Supreme Court (Court) affirmed the appellate court's ruling that an appraisal district's separate appraisal of saltwater disposal wells from the real property on which they are located for ad valorem tax purposes is permissible when the record does not indicate that the wells and the real property have been subject to double taxation. The Court noted that although tracts of land and improvements on them generally are appraised together and assigned a single value, appraisal districts may divide a tract of land and its improvements into separate tax components and appraise them individually.4 Bosque Disposal Systems, LLC v. Parker Cnty. Appraisal Dist., No. 17-0146 (Tex. S. Ct. May 25, 2018). Connecticut: The Connecticut Department of Revenue Services (Department) issued guidance on the treatment of bonus depreciation for Connecticut income tax purposes, following the state's decoupling from the bonus depreciation provisions, as amended by the federal Tax Cuts and Jobs Act (P.L. 115-97), for individuals, disregarded entities, partnerships and S corporations. Taxpayers are required to addback the bonus depreciation starting with the 2017 tax year return; taxpayers are allowed to deduct 25% of the disallowed deduction in each of the four succeeding taxable years. Affected taxpayers who already filed their 2017 Connecticut income tax return and claimed a bonus depreciation deduction for assets placed in service after Sept. 27, 2017 will have to file an amended return. Taxpayers who underpaid tax as a result of this change should contact the Department to explore penalty and interest relief options. Conn. Dept. of Rev. Serv., OCG-5 (June 14, 2018). North Carolina: New law (SB 99) provides an automatic extension to file a North Carolina income and franchise tax return to taxpayers that are granted an automatic extension to file a federal income tax return. This provision applies to tax years beginning on or after Jan. 1, 2019. N.C. Laws 2018, SB 99, enacted over governor's veto on June 12, 2018. For addition tax changes in SB 99, see Tax Alert 2018-1429. Puerto Rico: The Puerto Rico Treasury Department (PRTD) has clarified (Informative Bulletin 18-14) the due dates for taxpayers that filed automatic extension requests for filing 2017 income tax returns. Calendar year-end taxpayers that submitted an automatic extension request on or before April 25, 2018, have until Oct. 25, 2018, a six-month extension, to file their 2017 income tax returns. Regular corporations that filed an automatic extension request on or before April 25, 2018, and chose to file the return on paper are only entitled to a three-month extension. Therefore, such regular corporations must file their 2017 income tax returns by July 26, 2018. Conduit entities with a tax year that closed on Dec. 31, 2017, that submitted an automatic extension request on or before March 15, 2018, have until Sept. 17, 2018, to file their 2017 income tax returns. North Carolina: New law (SB 99) enacts new corporate and individual income tax provisions to clarify when a taxpayer must notify the North Carolina Department of Revenue (Department) of an amended federal return, whether the result of a federal determination or voluntarily filed. Under current law, taxpayers must file an amended return with the Department within six months of being notified of a correction or final determination by the federal government. SB 99 updates the statutory language to define "final determination" as a change or correction of federal tax due resulting from an audit by the IRS Commissioner. The bill also requires taxpayers that voluntarily file amended federal returns increasing North Carolina tax payable to file an amended North Carolina return; however, the amended North Carolina return is optional if the North Carolina tax payable decreases. The bill also provides an exception to the general statute of limitations related to assessments proposed from adjustments voluntarily filed with the IRS. In addition, SB 99 modifies penalties related to filing informational returns; gives the Department a framework to offer electronic filings, and modifies the state's law to clarify that a corporation or LLC that is subject to a revenue suspension is not relieved of its state tax filing obligations or its North Carolina tax liabilities. N.C. Laws 2018, SB 99, enacted over governor's veto on June 12, 2018. For addition tax changes in SB 99, see Tax Alert 2018-1429. Massachusetts: New law (HB 4640) requires the establishment of a state paid family and medical leave insurance program and incremental increases to the state minimum wage up to $15 ($6.75 for tipped employees) per hour over the next five years. For more on this development, see Tax Alert 2018-1388. New York: The New York Department of Taxation and Finance has issued guidance concerning the Employer Compensation Expense Program (ECEP) for administration of the new Employer Compensation Expense Tax. Employers interested in participating in the ECEP must make an affirmative election to participate annually by December 1 for the next calendar year. The initial annual employer election must be made no later than Dec. 1, 2018, to participate in the ECEP for 2019. If an election is made after the December 1 deadline, it will not take effect until the second succeeding calendar year. For example, if an employer makes an initial election on Dec. 20, 2018, that employer will not be eligible to participate in the ECEP until calendar year 2020. For more information on this development, see Tax Alert 2018-1383. North Carolina: New law (SB 99) amends N.C.G.S. §105-163.7 to restore the "out-of-business" provision, requiring an employer that goes out of business to file the NC-3 Form within 30 days from the last day the taxpayer has payroll. This provision was inadvertently lost in 2015, when the General Assembly changed the due date for filing the NC-3 Form from the federal due date to January 31. N.C. Laws 2018, SB 99, enacted over governor's veto on June 12, 2018. For addition tax changes in SB 99, see Tax Alert 2018-1429. Washington: A proposed Washington state ballot initiative calling for the establishment of a universal healthcare program for all Washington residents, and partially paid by an employer payroll tax, failed to garner sufficient signatures to be included on the Nov. 6, 2018 ballet. For more on this development, see Tax Alert 2018-1372. Iowa: New law (HF 2446) amends assessments and fees related to telecommunications and intrastate pipelines in Iowa. Under the amended law, the Iowa Utilities Board (Board) will impose a flat monthly $0.03 assessment on wireless carriers and wire-line local exchange carriers providing telecommunications service in the state for each telecommunications service phone number provided in Iowa (under prior law, the Board imposed an annual assessment). HF 2446 also defines "internet protocol-enabled service" and "voice over internet protocol service," (VOIP) and prohibits a department, agency, board or political subdivision from directly or indirectly regulating the entry, rates, terms or conditions for internet protocol-enabled service or VOIP service. In regard to pipelines, HF 2446 repeals the annual inspection fee of $0.50 per mile of pipeline for each inch of diameter of pipeline located in Iowa and replaces it with an annual inspection fee that is directly attributable to the costs of conducting annual inspections under Iowa's Pipelines and Underground Gas Storage laws. The provisions of HF 2446 took effect July 1, 2018. Iowa Laws 2018, Ch. 1160 (HF 2446), signed by the governor on May 17, 2018. North Carolina: New law (SB 99) amends N.C.G.S. §§105-228.3, 105-228.4A, and 105-228.5(g) to clarify that non-North Carolina captive insurance companies, defined as those licensed and taxed in another state, are not subject to the captive insurance, corporate income, franchise, or gross premiums taxes in North Carolina. N.C. Laws 2018, SB 99, enacted over governor's veto on June 12, 2018. For addition tax changes in SB 99, see Tax Alert 2018-1429. International: Beginning July 1, 2018,each lightweight plastic carrier bag sold in Cyprus is now subject to a minimum of €0.05 environmental tax plus 19% Value Added Tax (VAT). Further to the European Union (EU) Directive on harmonization, sellers of goods providing lightweight plastic carrier bags to their customers are no longer allowed to freely distribute these bags. Businesses responsible for the collection of the newly imposed charges that are not in compliance may be subject to strict criminal and administrative penalties. For more on this development, see Tax Alert 2018-1369. Multistate: If you missed the June 25, 2018 Ernst & Young LLP webcast discussing the U.S. Supreme Court's decision in South Dakota v. Wayfair and the likely consequences for US and non-US taxpayers, an on demand replay of the webcast is now available. During the webcast, panelists discussed the specifics of the Court's opinion, the likely long-term impact on taxpayers, what you can do to effectively prepare for any changes to the current nexus standard, and state-specific initiatives targeting in-state affiliates and referrers, marketplace providers, and ecommerce focused companies. Click here to listen to a replay. Multistate: On Wednesday, July 25, 2018 from 2:00 - 3:30 p.m. EDT New York; 11:00 - 12:30 p.m. PDT Los Angeles, Ernst & Young LLP will host a webcast discussing the tax compliance burdens of US tax reform. The panel discussion will include topics such as: (1) Tax year 2017 — tactical issues for reporting the IRC § 965 "transition tax" on 2017 federal returns, and perspectives on the resulting state return considerations, focusing on how (or whether) the states are responding and what businesses can do to prepare for reporting; (2) Tax year 2018 — key technical matters to address now for financial reporting and federal and state compliance readiness; (3) resources, data, process and technology — considerations and actions to implement and operationalize tax reform in your organization; and (4) examination and controversy readiness — what's expected from the IRS and state taxing authorities? Click here to register for this event. New Jersey: On Thursday, Aug. 2, 2018 from 1:00 - 2:00 p.m. EDT (10:00 - 11.00 a.m. PDT), Ernst & Young LLP will host a webcast to discuss the sweeping corporate business tax changes recently enacted in New Jersey, some of which are retroactively effective and impact 2017 returns. One of the most significant changes is that New Jersey no longer is a separate return state; starting in 2019 New Jersey requires water's-edge combined reporting. Panelists also will discuss: (1) the overhaul of the state's net operating loss (NOL) carryforward rules to include a conversion of pre-law NOLs to the new combined reporting regime; (2) the temporary corporate surtax; (3) limits on the deductibility of dividends; (4) new market-based sourcing rules for sales of services; (5) decoupling the CBT from certain provisions of the federal Tax Cuts and Jobs Act; (6) the increased gross income tax law (i.e., the individual income tax) rate on high wage earners; and (7) new carried interest tax provisions (contingent effective date). Click here to register for this external webcast. Because the matters covered herein are complicated, State and Local Tax Weekly should not be regarded as offering a complete explanation and should not be used for making decisions. Any decision concerning matters covered herein should be reviewed with a qualified tax advisor. 1 Kraft Foods Global, Inc. v. Director, Div. of Taxation, 29 N.J. Tax 224 (Tax 2016), aff'd, (N.J. Super. Ct., App. Div. May 17, 2018) (slip op.). 2 Kraft Foods Global, Inc. v. Director, Div. of Taxation, No. 017974-2009 (N.J. Tax Ct. April 25, 2016). 3 See also Morgan Stanley & Co., Inc. v. Director, Div. of Taxation, 28 N.J. Tax 197 (Tax 2014); Beneficial New Jersey, Inc. v. Director, Div. of Taxation, 2010 WL 10129134 (N.J. Tax Ct. Aug. 31, 2010). Document ID: 2018-1481 |
