23 August 2018 State and Local Tax Weekly for August 10 Ernst & Young's State and Local Tax Weekly newsletter for August 10 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. Ohio's manufacturing exemption and the treatment of employment services are the subject of recent court decisions Ohio taxpayers should be aware of two recently decided sales and use tax cases. In East Mfg. Corp.,1 the Supreme Court of Ohio (Court) considered the application of aspects of Ohio's manufacturing exemption. In Career Staffing, LLC,2 the Ohio Board of Tax Appeals (BTA) addressed the application of an exemption from otherwise taxable employment services. These rulings are discussed below: Manufacturing exemption — East Mfg. Corp. - Ohio Rev. Code § 5739.02(B)(42)(g) provides a sales tax exemption for things primarily used in a manufacturing operation. Ohio Rev. Code § 5739.011(C)(5), however, provides that property used for ventilation, dust or gas collection, humidity or temperature regulation, or similar environmental control is not entitled to exemption unless it totally regulates the environment in a special and limited area of the manufacturing facility where that regulation is essential for production to occur. In reviewing the applicability of the exemption, the Court reviewed the rule of the Ohio Department of Taxation (Department) set down in Ohio Admin. Code 5703-9-21(D)(6), which provided that the only exception to taxing environmental regulation equipment, was equipment that regulated a special and limited area of the facility, "such as a clean room or paint booth", where such regulation was essential for manufacturing to occur. The Court noted that the statute reflected a legislative decision to allow exemption in very limited circumstances and that the taxpayer was attempting to apply that exemption more expansively. Because the natural gas regulated the taxpayer's entire facility the Court upheld the BTA's conclusion that the taxpayer's "special and limited area" arguments were incorrect. The Court noted that holding otherwise would result in the exception "swallowing" the general rule. Employment services — Career Staffing, LLC - Ohio generally imposes sales tax on employment services, which are defined as providing or supplying personnel, on a temporary or long-term basis, to perform work under the supervision of another, when the personnel supplied are paid by the employment service provider.3 Ohio law (Ohio Rev. Code § 5739.01(JJ)(3)) provides for an exemption from the general rule of taxability in situations where personnel are supplied pursuant to a contract of at least one year in duration when the contract specifies that the personnel supplied are assigned to the customer on a permanent basis — the (JJ)(3) exemption. This case involved the appeal of the Department's assessment of additional sales tax upon a provider of employment services. The taxpayer argued that its services were exempt from taxation by reason of the (JJ)(3) exemption. The Department denied the exemption on the ground that the employees provided to the two customers at issue fluctuated constantly and that the contract did not specify the number of employees to be provided. The taxpayer appealed the assessment to the BTA. The BTA noted that the (JJ)(3) exemption had two requirements: (1) there must be a contract of at least one year; and (2) the assignment of employees must be on a permanent basis. The BTA also noted that the Court had recently addressed the "permanent assignment" aspect of the (JJ)(3) exemption and rejected an analysis that focused on whether the contract specifies permanent assignment in favor of a broader facts-and-circumstances test. Based on its prior decisions in H.R. Options, Inc.,4 and Accel, Inc.,5 the BTA noted that there is permanent assignment where the contract does not specify an ending date (i.e., personnel are supplied on an indefinite basis) and the employees provided are not substitutes for current employees or needed to meet seasonal or short-term workloads. In applying these cases to the taxpayer, the BTA concluded that one of the contracts at issue met the requirements for the (JJ)(3) exemption. The BTA received testimony from the plant manager of the taxpayer's customer, a cold storage facility, who said that the positions at issue were physically demanding as they required working in cold and wet conditions. This contributed to the fluctuation in the number of employees. The plant manager testified that the employees supplied by the taxpayer were not substitutes for existing employees or needed to fulfill seasonal needs. The plant manager also noted that the taxpayer, due to these difficult conditions, had never been able to fully satisfy its staffing needs. The BTA found this testimony credible and concluded that the taxpayer had met its burden in establishing entitlement to the (JJ)(3) exemption. The BTA did deny application of the exemption to the second contract at issue as there was little evidence presented to it by the taxpayer. For more on these developments, see Tax Alert 2018-1593. Federal: On Aug. 8, 2018, the Treasury and IRS released much-anticipated proposed regulations under Section 199A (the Proposed Regulations), which provide an income tax deduction with the potential to reduce a pass-through owner's top effective tax rate to 29.6%. In addition to the Proposed Regulations under Section 199A, the IRS published Notice 2018-64, which includes a proposed revenue procedure with methods for calculating Section 199A's W-2 wage limitations, and a "FAQ" document to answer basic questions on the application of Section 199A. Pending the issuance of the final regulations, the Proposed Regulations explicitly state that taxpayers may rely on them until final regulations are published in the Federal Register. In addition, the Proposed Regulations indicate that certain anti-abuse rules contained in the Proposed Regulations will apply retroactively, to tax years ending after the date of the enactment of Section 199A, which is Dec. 22, 2017. For more on this development, including a discussion of state tax implications, see Tax Alert 2018-1634. Connecticut: The Connecticut Department of Revenue Services (DRS) issued guidance on the treatment of global intangible low-taxed income (GILTI) for Connecticut Business Tax (CBT) purposes. The DRS said that since GILTI is treated similarly to Subpart F income for federal income tax purposes, Connecticut will treat it similarly. Thus, GILTI will be treated as dividend income, and corporations will be entitled to claim a dividend received deduction (DRD) to offset such income. A corporation claiming the DRD is required to add back expenses relating to its dividend income on its Connecticut return. Addback is equal to 5% of the dividend income; it should equal 5% of the gross amount of GILTI before any corresponding federal deduction. The effect of the full DRD and 5% addback, is a net 95% DRD for GILTI. The DRS further stated that GILTI income which was previously taxed is excluded from gross income for federal income tax purposes and likewise will be excluded from Connecticut taxable income for CBT purposes. Further, because GILTI is treated as a dividend for CBT purpose, it will be excluded from calculating the CBT apportionment factor (i.e., it will not appear in either the numerator or denominator of the corporation's CBT sales or receipts factor). The DRS said that once the IRS issues additional guidance on how GILTI will be reported, it will provide additional guidance on how GILTI should be reported on the CBT return. The guidance applies to income tax years commencing on or after Jan. 1, 2018. Conn. Dept. of Rev., Serv., SN 2018(7) (July 20, 2018). Florida: The Florida Department of Revenue (Department) determined that a corporation filing a consolidated return with a wholly owned subsidiary, which sold intercompany purchases to foreign customers and foreign affiliates, is required to include the gross receipts from these intercompany sales in the sales factor of its apportionment formula. Under Florida law, when a consolidated return is filed, intercompany sales may be included in the sales factor under certain circumstances. In this case, the Department found that substantively there existed "indicia of a sale" through the transfer of title to goods, payment of consideration for goods delivered, and actual delivery (i.e., a product's "sales destination"). Additionally, the intercompany transaction's "gross profit" was established in the separate profit and loss accounts for the affiliated entities in the corporation's federal consolidated return. The Department found these facts supportive of a finding that these intercompany sales are sales for sales factor purposes. Fla. Dept. of Rev., Tech. Assistance Advisement No. 18C1-005 (May 21, 2018; released June 18, 2018). Idaho: Temporary rule (Temporary Rule 017T) provides guidance on the treatment of IRC § 965 income and related exclusions (i.e., the federal transition tax on US owned foreign corporations). The rule explains that due to IRC § 965, Idaho taxpayers must include the increase in the Subpart F income (Section 965(a) gross inclusion amount reduced by Section 965(b) netting) when computing their Idaho taxable income, regardless of how the income is reported to the IRS on the federal form. The temporary rule also is being proposed as a permanent new rule — Rule 017. In addition, Rule 15 would be amended to provide that any retroactive amendments to the IRC that were enacted on or before the state's date of conformity to the IRC would be applied retroactively to the extent allowed under federal law. Idaho Dept. of Rev., Temporary Rule 017T; new Rule 017; amendments to Rule 015 (Idaho Admin. Bulletin Aug. 1, 2018). Michigan: The Michigan Department of Treasury (Department) issued additional guidance on certain provisions of the Tax Cuts and Jobs Act (P.L. 115-97) (TCJA), including the treatment of IRC § 965 income (federal transition tax), global intangible low-taxed income (GILTI) in IRC §§ 951A and 250, and the Base Erosion Anti-Abuse Tax (BEAT) in IRC §59A. For Michigan Corporate Income Tax (CIT) purposes, Section 965 income is included in federal taxable income (FTI) and since the CIT base starts with FTI, such income is included in computing the CIT base income. A deduction for foreign dividends, however, is allowed to the extent the income is included in FTI. The Department said that even though inclusion of Section 965 income in FTI may have no tax effect for CIT purposes, taxpayer are nevertheless required to properly report such income on their Michigan CIT return. Taxpayers with Section 965 income that have already filed their 2017 returns but did not property report the income will need to file an amended return. The Department further determined that GILTI is included in FTI but can be deducted as a dividend from a foreign entity (similar to other Subpart F income) when calculating the CIT tax base. In regard to BEAT, the Department "views [it] as a tax measured by net income." Under Michigan law there generally is no deduction allowed for federal income taxes when computing FTI. If, however, BEAT is deducted in computing FTI that was reported to Michigan, the deduction must be added back to FTI used as the starting point for the CIT. Once the IRS issues additional guidance, the Department will provide an update to this guidance. Mich. Dept. of Treas., Notice: Corporate income tax guidance on federal TCJA (July 2, 2018). Texas: An affiliated group's reporting entity's (entity) costs of purchasing intangible assets from car dealerships as part of an acquisition could not be deducted as a cost of goods sold (COGS) under Tex. Tax Code § 171.1012(d)(10), because the intangible assets purchased were not licensing and franchising costs. In making this determination, the Texas Comptroller of Public Accounts (Comptroller) strictly construed the statutory examples of licensing and franchise costs (fees for the right to use a trademark, corporate plan, manufacturing procedure, special recipe, or other similar right directly associated with the goods produced) against the intangible assets that the entity purchased and deducted as COGS (i.e., brand names, business location, telephone and fax numbers, service and sales customer lists, vehicle sales and service records, intellectual property, all assignable licenses and permits, all rights of the seller under contracts assigned to and assumed by the entity under its agreement, and all of the seller's other intangible rights and interests related to the seller's business, other than excluded assets). The Comptroller noted that the entity conflated asset purchase and franchise agreements, reasoning that the description of the intangible assets purchased does not include examples of licensing and franchise costs. Tex. Comp. of Pub. Accts., No. 201805027H (May 30, 2018). Connecticut: The Connecticut Department of Revenue Services (DRS) determined that a company's that recruits healthcare professionals from outside the US to work for its healthcare provider clients is providing taxable personnel services because the healthcare professionals are employed by the company and when at work at the client's location work under the client's direction and control. The DRS found that the true object of the company's contracts is to provide qualified, trained and licensed staff to its clients. Although the healthcare professionals use professional judgment in performing their work, the clients have direct control over the healthcare professionals when the clients assign the healthcare professionals' patients, determine where the work is performed, provide physician's orders and administrative rules for the healthcare professionals to follow, and assess work quality. Conn. Dept. of Rev. Serv., Ruling No. 2018-2 (June 28, 2018). Georgia: Computer tablets sold or leased to restaurants are not coin-operated amusement machines (COAM) and, therefore are not subject to licensing requirements and regulations of the Georgia Lottery Corp. (GLC). In reaching this conclusion, the Georgia Court of Appeals found the statute (Ga. Code Ann. § 50-27-70(b)(2)(A)) is unambiguous, and the trial court did not err in concluding that the tablets are not COAMs since their operation does not require payment, and does not require users to exercise any skill when they can use it to find nutritional information, order, pay or play certain other games. Georgia Lottery Corp. v. DO-021 Tabletop Media LLC, No. A18A0595 (Ga. Ct. App. June 21, 2018). Hawaii: New law (SB 2868) imposes transient accommodations tax on transient accommodations brokers, travel agencies and tour packagers that furnish accommodations at noncommissioned negotiated contract rates. When the gross income from such transactions is divided between a transient accommodations operator and the transient accommodations broker, travel agency or tour packager, the transient accommodations tax applies to each party with respect to its respective portion of the proceeds. Additionally, SB 2868 amends the definition "gross rental" or "gross rental proceeds" to include compensation received for/value proceeding or accruing from entering into arrangements to furnish transient accommodations, and requires transient accommodations brokers, travel agencies, and tour packagers to register with the director and pay a one-time license fee before entering into an arrangement to furnish transient accommodations. These provisions apply to taxable years beginning after Dec. 31, 2018. Haw. Laws 2018, Act 211 (SB 2868), signed by the governor on July 10, 2018. Louisiana: The Louisiana Department of Revenue (Department) announced that it will begin enforcing its economic nexus provisions starting Jan. 1, 2019. Similar to the rules imposed by South Dakota and recently considered by the U.S. Supreme Court in its historic decision in South Dakota v. Wayfair, Louisiana's economic thresholds are: receiving gross revenues for sales delivered into Louisiana in excess of $100,000 or engaging in 200 or more separate transactions with Louisiana customers of tangible personal property, electronically transferred products, or services. The Department made clear that it will not seek to retroactively enforce any sales and use collection obligation on remote sellers. Remote sellers that do not meet the economic nexus threshold or voluntarily register with the Department remain subject to notification requirements. La. Dept. of Rev., Remote Sellers Information Bulletin 18-001 (Aug. 10, 2018). Maine: The Maine Revenue Services announced on its website that its economic nexus statute will be enforced for sales occurring on or after July 1, 2018. Maine's threshold is 200 separate transaction or more than $100,000 in gross receipts from Maine customers, and applies to sales of tangible personal property, electronically transferred products and taxable services. (Website last accessed Aug. 10, 2018). Mississippi: The Mississippi Department of Revenue said that it will begin enforcing its economic nexus rule that took effect Dec. 31, 2017. Online sellers that meet the economic threshold set forth in the rule (i.e., annual Mississippi sales in excess of $250,000) must register to collect Mississippi sales tax by Aug. 31, 2018 and start collecting use tax for sales made on or after Sept. 1, 2018. Whether an online seller meets the sales threshold is based on sales into the state during the prior 12-month period, and includes all sales into the state (i.e., wholesale sales, taxable sales, and sales subject to any exemption). Miss. Dept. of Rev., "Sales and Use Tax Guidance for Online Sellers" (posted Aug. 2018). North Carolina: The North Carolina Department of Revenue (Department) announced that under N.C. Gen. Stat. § 105-164.8(b) remote sellers will be required to collect and remit the state's sales and use tax on taxable retail sales sourced to the state beginning on Nov. 1, 2018. The Department set collection and remittance thresholds of gross sales in excess of $100,000 or 200 or more separate transactions sourced to North Carolina. The Department said it will apply principles upheld in the U.S. Supreme Court's ruling in South Dakota v. Wayfair on a prospective basis for remote retailers that do not have a physical presence in the state. Remote retailers meeting either of the thresholds must begin to collect and remit sales and use tax on the later of Nov. 1, 2018 or 60 days after meeting one or the other of the transactional thresholds. Remote retailers that do not meet the thresholds nevertheless may voluntarily register to collect and remit tax. N.C. Dept. of Rev., Directive SD-18-6 (Aug. 7, 2018). South Dakota: On Aug. 9, 2018, the South Dakota Supreme Court remanded the South Dakota v. Wayfair case back to the South Dakota Circuit Court for further legal proceedings. If the case is not settled, the circuit court per the U.S. Supreme Court's instructions, will consider other constitutional issues. Once the case is finally decided or settled, the circuit court may dissolve the injunction currently in place. On a separate, but related note, Governor Daugaard has called a special session for Sept. 12, 2018, for consideration of legislation that would expedite implementation of the Wayfair ruling and "allow the state to enforce the obligation of remote sellers to collect and remit sales tax." The Governor indicated that draft legislation will be made available prior to the special session. Texas: A corporation is not entitled to a refund of sales and use tax it paid on the purchase of Electronic Design Automation (EDA) software tools it used to design semiconductor chips that were manufactured by a third-party foundry under the manufacturing exemption because the EDA software tools were not directly used in actual manufacturing of the chips. In reaching this conclusion, the Texas Court of Appeals (Court) found that under Tex. Tax Code § 151.318(a)(2)(A), the corporation's creation of a graphic design file using the EDA software tool was in preparation for manufacturing and was not an "operation beginning with the first stage in the production." (In this case, the foundry performed its own design rule check and used its own EDA software tools that it bought before beginning the semiconductor chip production.) The Court also found that the EDA software tools do not fall within the definition of "Semiconductor Fabrication Cleanrooms and Equipment" because the EDA software tools did not have a reasonable nexus with the foundry's cleanroom environment for making the semiconductor chips. Further, the Court rejected the corporation's argument that the EDA software tools were used "in connection with" manufacturing of the semiconductor chips as property necessary to control manufacturing tolerances, finding instead that the EDA software tools did not "control" the manufacturing tolerances when they operated within the foundry's manufacturing tolerances. Lastly, the corporation's purchases of digital tools components of the EDA software tools were not exempt under Tex. Tax Code § 151.318(a)(2)(B) since the "functional logic" that was created with the digital tools components was not "sold as a completed program" and it was not a "product." Silicon Labs., Inc. v. Hegar, No. 03-17-00061-CV (Tex. Ct. App., 3d Dist., July 13, 2018). Federal: Vacating and remanding a decision by the Court of Federal Claims, the Court of Appeals for the Federal Circuit held in Alta Wind I Owner Lessor C, et al. v. United States that the lower court erred in: (1) refusing to utilize the residual method of basis calculation in determining the amount of a cash grant available to entities that launch certain renewable energy facilities; and (2) excluding the testimony of the government's expert witness as to the appropriate basis calculation. For more on this development, see Tax Alert 2018-1610. Pennsylvania: The Keystone Opportunity Zone (KOZ) benefits a company received for the years from 2013 through 2015 for opening and operating a business in a KOZ were subject to recapture because the company sold the business within five years of locating within the KOZ, which effectively caused the qualifying business to relocate outside the KOZ, triggering recapture. The Pennsylvania Commonwealth Court (Court), however, reversed the denial of the company's January 2016 benefits since at that time it was a qualified business actively conducting business in the KOZ and it was entitled to receive the benefits and then be subject to partial recapture of them. In reaching these conclusions, the Court noted that the KOZ benefits were subject to recapture under Section 902(a) because the company effectively relocated its active operations into non-existence by selling the business to another entity, keeping a physical location in the KOZ (separate from the business), and starting the corporation dissolution process. The purpose of Pennsylvania's KOZ provisions is to pay KOZ benefits only to businesses that actively conduct business within a KOZ. Additionally, the Court found that the Secretary of the Pennsylvania Department of Community and Economic Development did not err or abuse discretion in finding inapplicable the Section 902(b) waiver and modification provisions, as the company relocated by voluntarily selling the business, which is not entitled to waiver by statute. Vetri Navy Yard, LLC v. Pa. Dept. of Community and Econ. Devel., No. 499 M.D. 2017 (Pa. Commw. Ct. July 16, 2018). California: In partially reversing the trial court, a California Court of Appeal (Court) held that a county assessor can include a cable company's (company) revenue from broadband and telephone service in valuing the company's possessory interest in public rights-of-way, and is not restricted to only capitalizing the company's cable television franchise fee (which is limited to no more than 5% of revenue generated from the provision of television services). In reaching this conclusion, the Court found that the lack of an "actual market" for a particular type of property does not mean it has no value or that it will not be subject to California's constitutional requirement to tax property in proportion to its value. Additionally, the Court affirmed the trial court's rulings that: (1) no substantial evidence supported the assessor's determination that 5% of gross income from broadband and telephone services represented the fair market value of the possessory interests in providing these services; and (2) the assessor erred in not allocating part of the economic rent to the cable company's intangible (i.e., nontaxable) assets, before taxing the possessory interests. Lastly, based on the company's significant investment in parcels subject to the franchises (by adding telephone operations "from scratch"), the fact that no cable franchise has been terminated for cause or denied renewal since 1980, and federal law severely restricts the grounds upon which a franchisor may deny a franchise's renewal, the Court affirmed that substantial evidence supports the assessor's use of a 10-year term of possession for the company. Time Warner Cable Inc. v. Cnty. of Los Angeles, No. B270062 (Cal. Ct. App., 2d Dist., Div. 1, July 19, 2018). Arizona: The Arizona Department of Revenue (Department) posted guidance to its website on new online options for taxpayer appeals. Beginning Aug. 3, 2018, taxpayers with an appeal pending before the Department may bypass the administrative hearing process and appeal directly to the Arizona Board of Tax Appeals (BOTA) or Arizona Tax Court (Court), except in cases involving individual income taxes. To do this, taxpayers would meet with the Department before starting their appeal with the BOTA or the Court by requesting a Bypass Conference with the Department's Designated Appeals Officer using Arizona Form 291. Ariz. Dept. of Rev., New online option for taxpayer appeals (Aug. 2, 2018). New Hampshire: New law (HB 1104) reduces certain time limits for New Hampshire agencies (which include departments) to act on applications under the administrative procedure act. HB 1104 provides that within 30 days (from 60 days) of a New Hampshire government agency receiving a petition for redetermination or reconsideration, it must examine it, notify the applicant of any errors or omissions, request additional information, and notify the petitioner of the name, official title, address and telephone number of the petitioner's contact within the agency about the petition. Within 60 days (down from 120 days) after the agency receives the petition for redetermination or reconsideration, or after the agency receives a response to a timely agency request, it must either: (1) approve or deny the redetermination or reconsideration petition, in whole or in part, based on nonadjudicative processes; or (2) begin an adjudicative proceeding. Lastly, HB 1104 provides that if the agency fails to act within the prescribed amount of time, the application, petition, or request will be deemed approved, and any permit will be deemed granted. HB 1104 takes effect Jan. 1, 2019. NH Laws 2018, Ch. 279 (HB 1104), signed by the governor on June 21, 2018. Minnesota: The Minnesota Department of Revenue (Department) announced that beginning Jan. 1, 2019, employers will no longer have the option to use the Department's electronic data exchange system to submit Forms W-2 and 1099. As a result, the Department has made enhancements to its e-Services system, allowing employers to upload files, including compressed files, as large as 30 megabytes. Files must be compliant with the SSA EFW2 format for Forms W-2 and the IRS Publication 1220 for Forms 1099. For more on this development, see Tax Alert 2018-1604. Ohio: New law (HB 133) exempts out-of-state disaster businesses and qualifying out-of-state employees from certain state and local taxes. The exemption applies against state and local income tax, sales and use tax, Commercial Activity Tax, workers compensation, and unemployment compensation, as well as state and local occupational licensing requirements, for work repairing public utility or communications infrastructure damaged by a declared disaster during a disaster response period. The disaster work must be conducted pursuant to a qualifying solicitation received by the business (i.e., a written solicitation or request from the state, county, municipal corporation, or township, or a qualifying user or owner of critical infrastructure soliciting or requesting the assistance of a person to perform disaster work in Ohio). Critical infrastructure means property and equipment owned or used by a qualifying owner or user to provide service to more than one customer, including related support facilities such as buildings, offices, power lines, cable lines, poles, communication lines, and structures. HB 133 takes effect Sept. 28, 2018. Ohio Laws 2018, HB 133, signed by the governor on June 29, 2018. International: Kenya's President assented to the Tax Laws (Amendment) Act, 2018 on July 18, 2018. Provisions regarding the Income Tax Act (ITA) (Cap 470) and Value Added Tax Act (VAT Act) (Cap 476) became effective retroactively on July 1, 2018. The Stamp Duty Act (Cap 480) amendment provisions will become effective Oct. 1, 2018. Proposed amendments to the VAT Act focus on the exemption of various supplies, which were previously zero rated or standard rated. Exempt supplies are not subject to tax whereas zero-rated and standard-rated supplies are taxable at a rate of 0% and 16%, respectively. For more on this development, see Tax Alert 2018-1577. International: The Value Added Tax (VAT Amendment) Act, 2018 that took effect on July 1, 2018 has introduced a new concept of Value Added Tax (VAT) withholding in Uganda. The procedural regulations regarding its implementation are contained in the Value Added Tax (Tax Withholding) Regulations, 2018 and the persons that have to comply by withholding VAT on payments made to their suppliers are contained in the Value Added Tax (Designation of Tax Withholding Agents) Notice, 2018. For more on this development, see Tax Alert 2018-1608. International: In July 2018, the United Arab Emirates (UAE) Federal Tax Authority (FTA) published a clarification on non-recoverable input tax on entertainment services. The clarification is important for understanding how the FTA will determine when entertainment services are provided. For more on this development, see Tax Alert 2018-1599. International: The United Arab Emirates (UAE) Federal Tax Authority (FTA) published its VAT Guide on Designated Zones (the guide) on July 29, 2018. The guide discusses: (i) Characteristics that a Free Zone must have to qualify as a Designated Zone; and (ii) Value Added Tax (VAT) treatment of transactions connected with a Designated Zone. The new guide is important for any UAE business that operates in a Free Zone, or that transacts with suppliers or customers located in a Free Zone. For more on this development, see Tax Alert 2018-1588. Multistate: On Tuesday, Aug. 28, 2018 from 1:00-2:00 p.m. EDT New York; 10:00-11:00 a.m. PDT Los Angeles, Ernst & Young LLP will host a webcast on state information reporting and withholding. With regulators focusing more intently on closing revenue gaps and developing increasingly complex requirements for state information reporting and withholding, businesses must make certain they understand and adequately address their reporting and withholding obligations. For many organizations, internal resources and technology are unable to keep pace with the intricacies of these requirements, placing their organizations at risk for audits that could result in costly penalties and exposure. During the webcast, panelist will address: (1) the complexity and variety of state reporting and withholding requirements, (2) how technology and data security factor into the development of an adequate information reporting strategy, (3) audit risks and considerations, and (4) leading practices. Click here to register for this event. Multistate: On Thursday, Sept. 6, 2018 from 1:00 — 2:30 p.m. EDT (from 10:00 — 11:30 a.m. PDT) Ernst & Young LLP (EY) will host its state tax quarterly webcast. For this webcast, EY panelists will discuss the following topics: (1) State tax policy issues, including an overview of the upcoming November 2018 federal, state and local elections, including the many ballot initiatives around the country; (2) States' legislative and administrative responses to the TCJA; (3) State and federal responses to the U.S. Supreme Court's historic sales and use tax decision in South Dakota v. Wayfair; and (4) An update covering major legislative, judicial and administrative developments at the state level. Click here to register for this event. 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. Document ID: 2018-1675 |
