income tax sales tax - institute for professionals in … · ticularly in light of the exceptions...

West Virginia's Statutory Nexus Presumption: A Safe Harbor for Financial Service Providers Despite MBNA or Even Physical Presence?One reading of the thresholds in West Virginia’s statutory nexus presumptions for absent financial organizations, par-ticularly in light of the exceptions limit-ing the measure of those thresholds, is that they actually constitute safe harbors from nexus. Thus, even in the state whose Court gave us expanded economic nexus in MBNA, taxpayers falling below those thresholds may en-joy defenses to findings of either eco-nomic nexus or even, in some cases, nexus based on physical presence. This article analyzes the statutory lan-guage and discusses the bases sup-porting this construction of the nexus thresholds.Michael E. Caryl, Esq.Bowles Rice LLPMartinsburg, WVPhone: (304) 263-0836E-mail: [email protected]

Catherine A. Wilkes Delligatti, Esq.Bowles Rice LLPMartinsburg, WVPhone: (304) 263-0836E-mail: [email protected]

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Income Tax

In this IssuePresident's Corner . . . . . . . . . . . . . . . . . . . . . . . . . 3Counsel's Corner . . . . . . . . . . . . . . . . . . . . . . . . . . 4Property Tax Calendar . . . . . . . . . . . . . . . . . . . . . 23ABA/IPT Tax Seminars . . . . . . . . . . . . . . . . . . . . . 24Sales Tax School II . . . . . . . . . . . . . . . . . . . . . . . . 25

IPT Annual Conference . . . . . . . . . . . . . . . . . . . . 25Credits & Incentives School . . . . . . . . . . . . . . . . . 26CMI Corner . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27Code of Ethics . . . . . . . . . . . . . . . . . . . . . . . . . . . 27CMI Candidate Connection . . . . . . . . . . . . . . . . . 28

Career Opportunities . . . . . . . . . . . . . . . . . . . . . . 29State Business Income Taxation Book . . . . . . . . . 30Calendar of Events . . . . . . . . . . . . . . . . . . . . . . . . 31

Tax ReportInstitute for Professionals in Taxation®Excellence Through Tax EducationMarch 2014

Sales Tax

Getting to the Source: Illinois Department of Revenue Issues Emergency Regulations that Provide Guidance for Sourcing Sales in Light of the Hartney DecisionThe Illinois Supreme Court’s recent decision in Hartney Fuel Oil Co. v. Hamer invalidated the regulations addressing the sourcing of sales for purposes of Illinois’ local retail occupation taxes, and in doing so left a great deal of uncertainty as to the proper facts to consider in sourcing such sales. This article provides an analysis of the Hartney decision, as well the recently-issued emergency regulations, in order to provide a comprehensive overview of the sourcing rules that apply to local retail occupation taxes in Illinois.Georgiy S. Kotanchiyev, Esq.Georgetown University Law Center (LL.M. Candidate)Washington, D.C.Phone: (814) 746-6738E-mail: [email protected]


The Grow New Jersey Incentive Program: An Economic Development “Game-Changer” for New Jersey?New Jersey recently revamped its entire incentive system, collapsing five programs into two. This article focuses on the Grow New Jersey Assistance Program, which is designed to attract and retain jobs in New Jersey. In addition to discussing the eligibility requirements, calculation of available credits, and applicable limitations, the author compares this program to comparable incentives available in neighboring states and points out some of the criticisms that have been leveled at the program.Dan Breen, CPA, Esq.Jones Lang LaSalleEast Rutherford, NJPhone: (201) 528-4427E-mail: [email protected]


Credits and Incentives

Sales Tax School IIMarriott Kingsgate Conference Center Aril 27 - May 2, 2014 • Cincinnati, Ohio Program Regis t ra t ion Hote l Reservat ion

mailto:[email protected]




IPT March 2014 Tax Report 2

IPT OFFICERS President Arlene M. Klika, CMI Schneider National, Inc.

First Vice President Arthur E. Bennett, CMI Property Tax Assistance Co., Inc.

Second Vice President Margaret C. Wilson, CMI, Esq. Reeder Wilson LLP

BOARD OF GOVERNORS Immediate Past President Paul A. Wilke, CMI Weingarten Realty Investors

Carolyn L. Carpenter, CMI, CPA International Paper Company

Kyle Caruthers The Coca-Cola Company

Garfield A. Grant, CMI, CPA DuCharme, McMillen & Associates, Inc.

Rick H. Izumi, CMI ITA, LLC

Kenneth R. Marsh, CMI TransCanada Pipelines Limited

William J. McConnell, CMI, CPA, Esq. General Electric Company

Faranak Naghavi, CPA Ernst & Young LLP

Andrew P. Wagner, JD, LLM FedEx Corporation

Allan J. Wells, CMI ABB Inc.

CORPORATE COUNSEL Lee A. Zoeller, CMI, Esq. Reed Smith LLP

EXECUTIVE DIRECTOR Cass D. Vickers

ASSISTANT EXECUTIVE DIRECTORS: Brenda A. Pittler Charles Lane O’Connor

GENERAL COUNSEL Keith G. Landry

This publication is designed to provide accurate in-formation for IPT members and other tax profes-sionals. However, the Institute is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent profes-sional should be sought. Reprint permission for ar-ticles must be granted by authors and the Institute. Send address changes and inquiries to Institute for Professionals in Taxation®, 1200 Abernathy Road, NE, Building 600 Suite L-2, Atlanta, Georgia 30328 Telephone (404) 240-2300/Fax (404) 240-2315.

District Court Rules Texas Taxpayers Cannot Elect to Use Three-Factor MTC Apportionment in lieu of Texas’s Single-Factor Apportionment

In a very closely watched case, a Texas District Court recently held that a taxpayer was not entitled to elect to use the Multistate Tax Compact’s optional three-factor apportionment formula but rather was required to use the single-sales-factor formula prescribed by Texas law for purposes of the state’s franchise, or margin, tax. Although the court did not provide the reasons for this decision, this article examines the arguments that were advanced by the parties, including as to the threshold issue of whether the Texas tax constitutes an income tax for purposes of the MTC election provision.Doug Sigel, Esq.Ryan Law Firm, LLPAustin, TexasPhone: (512) 459-6611E-mail: [email protected] Olga Goldberg, Esq.Ryan Law Firm, LLPAustin, TexasPhone: (512) 459-6607E-mail: [email protected]


Income Tax Tax Legislation

State Nonresident Payroll Withholding Rules Present Complexity to Employers That Deploy a Mobile Workforce – Is It Time for a Federal Mandate?

The shift in recent years to a much more mobile U.S. workforce has made it increasingly important for both employers and employees to know the rules governing the taxation of income earned in a nonresident state and the payroll withholding and reporting requirements, which differ substantially among the various states. This article provides a general overview of the nonresident payroll withholding rules and highlights how the lack of uniformity creates complexity for employers that wish to be compliant. The article also discusses legislation under consideration by the current Congress which, if enacted, would limit a state’s authority both to tax nonresident employees and to require employers to comply with the state’s withholding and information reporting requirements.Sylvia F. Dion, MPA, CPAPrietoDion Consulting Partners LLCWestford, MAPhone: (978) 846-1641E-mail: [email protected]






President’s

Corner

Arlene M. Klika, CMI President June 2013-2014

It is hard to believe that March is already here. The Institute’s 2014 Sales Tax School I just concluded on February 28th in Atlanta, Georgia with close to 195

students in attendance. School highlights will be included in IPT’s March issue of Member News. Once again, William F. Fox, Ph.D., provided an excellent introduction at the opening general session that gave each of the participants a solid foundation for a successful learning experience. I sincerely appreciate the work of the School Chair, Brenda Kelley, CMI, CPA, and Vice Chair, Kathy Peavley, CMI, as well as their instructors who put together another excellent school.

IPT’s first webinar “A Survey of State and Local Tax Legislative, Administrative and Judicial Trends and Developments” will be offered on March 20, 2014. To participate, please visit the registration page for the webinar on the IPT website.

The Institute is co-sponsoring its annual ABA-IPT Advanced Income, Property, and Sales Tax Seminars on March 31 - April 4 in New Orleans, and we expect a good attendance. The individual committees have each developed a full program of current and varied topics presented by high-caliber speakers who are recognized in their field. Registrations are still being accepted through the ABA.

As you all know, the CMI designation continues to gain recognition and value throughout the United States and

Canada. Any member interested in pursuing the CMI designation and sitting for the examination at the Annual Conference should submit his/her candidacy application by March 28th. Visit the IPT website for more information about the CMI designation or to download the applications. Exams are scheduled in conjunction with the 2014 June Conference and the 2014 Income, Property and Sales Tax Symposia. IPT’s new CCIP (Certified Credits and Incentives Professional) designation will be rolled out at the Annual Conference. Please see IPT’s website for further information. Our designation program has come a long way since the first Property Tax designations in 1979.

It is not too early to mark your calendars and plan to attend the Annual Conference which is coming up in a few months in Phoenix at the JW Marriott Desert Ridge. I have had the pleasure of visiting this full-service conference property located just 30 minutes from the airport. It is a great venue for our program. You will not want to miss our Keynote speaker this year, Dr. Bill Fox, who, as mentioned above, also presents an introductory session at Sales Tax School I. Always a favorite, Bill is an energetic, knowledgeable and interesting speaker, who will bring a fresh perspective on a crucial topic that will impact each of us – state and municipal economic updates. Look for more details in upcoming issues of the Tax Report. My gratitude to David LeVan, CMI, Overall Chair of the Annual Conference, as well as to Anna Westbrook, CMI, Property Tax Chair; Carolyn Shantz, CMI, CPA, Sales Tax Chair; Minah Hall, Esq., Credits and Incentives Chair; and Glenn McCoy, Jr., Esq., Income Tax Chair, and their respective committees for all their hard work to ensure that this Conference will be an excellent educational offering. Registration materials will be available on the website by the end of this month. Be sure to come to this wonderful destination for IPT’s 38th Annual Conference, and plan to participate in the IPT golf tournament on Sunday, and networking activities on Sunday, Monday, and Tuesday evenings sporting the Conference theme “TEAM SUCCESS.”

The Institute has four schools coming up before the Conference. Registration continues for the Sales Tax School II (April 27-May 2) and the first Credits and Incentives School (May 14-16); both will be held at the Marriott Kingsgate Conference Center in Cincinnati, Ohio. Registration for Sales Tax School II is expected to exceed last year, so I encourage you to register now. The Credits and Incentives School Committee has been diligently working to complete the course curriculum. This is the first IPT school that is a combination of Instructor-led and online coursework. Please let your Credits and Incentives colleagues know about this school.


(Continued on page 5)

Counsel’sCorner

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INCOME TAX

West Virginia's Statutory Nexus Presumption: A Safe Harbor for Financial Service Providers Despite MBNA or Even Physical Presence?

Michael E. Caryl, Esq.Bowles Rice LLPMartinsburg, WVPhone: (304) 263-0836E-mail: [email protected]

Catherine A. Wilkes Delligatti, Esq.Bowles Rice LLPMartinsburg, WVPhone: (304) 263-0836E-mail: [email protected]

I n its 2006 ruling in the case of Tax Comm’r v. MBNA America Bank, NA (hereinafter, MBNA),1 the West Vir-ginia Supreme Court of Appeals held that, based on

economic nexus principles, the provisions of the state’s corporation income tax and business franchise tax stat-utes could and did constitutionally impose those taxes on a physically absent credit card issuer. Because, during the years at issue in MBNA, the taxpayer annually so-licited business from far more than twenty persons and earned far more than $100,000 in interest income from West Virginia sources, the Court did not address the en-forceability or proper application of the statutes’ nexus presumptions for financial organizations based on those specific thresholds.2

1 640 S.E.2d 226 (W.Va. 2006), cert. den. 551 U.S. 1141 (2007).

2 W.Va. Code §§ 11-23-5a and 11-24-7b. Interestingly, while the taxpayer’s petition for certiorari was pending in the United States Supreme Court, the West Virginia Legislature, upon enacting mandatory combined reporting rules, inadvertently

At the end of March, registration will be open for the Basic and Advanced State Income Tax Schools (June 1-6), which will be held at the Georgia Tech Hotel and Conference Center in Atlanta. The course agendas should be available later this month, and I hope you will take the time to review them and pass each of them along to the appropriate individuals in your company. You may register online for any IPT program.

The program for the year’s first state-specific One-Day Tax Seminar to be held in Michigan on May 2nd is being finalized.The agenda will be posted as soon as it is completed. I encourage you to attend these state-specific seminars to keep current on emerging tax developments and to network with other tax professionals in attendance. The sessions are well presented and most informative. It is an excellent opportunity to meet, get acquainted with, and establish rapport with top-level state administrators.

The Institute is your association. If you have any questions, concerns, or recommendations, please do not hesitate to contact me, any member of your Board of Governors or the IPT staff.

Arlene M. Klika, CMI President





Specifically, the presumed nexus provisions of West Virginia’s income tax law,3 applicable to non-domiciled financial organizations, state in pertinent part:

(d) Engaging in business - nexus presumptions and exclusions. -- A financial organization that has its commercial domicile in another state is presumed to be regularly engaging in business in this state if during any year it obtains or solicits business with twenty or more persons within this state, or if the sum of the value of its gross receipts attributable to sources in this state equals or exceeds one hundred thousand dollars. However, gross receipts from the following types of property, as well as those contacts with this state reasonably and exclusively required to evaluate and complete the acquisition or disposition of the property, the servicing of the property or the income from it, the collection of income from the property or the acquisition or liquidation of collateral relating to the property shall not be a factor in determining whether the owner is engaging in business in this state:

….4

(3) An interest in a loan or other asset from which the interest is attributed to a consumer loan, a commercial loan or a secured commercial loan and in which the payment obligations were solicited and entered into by a person that is inde-pendent, and not acting on behalf, of the owner;

repealed the portion of the statutes containing the nexus pre-sumption. See 2007 W.Va. Acts Chapter 247, Comm. Sub. for SB 749. However, the nexus presumption language was soon restored in an omnibus bill substantially clarifying and refining the entire combined reporting regime. See 2008 W.Va. Acts Chapter 215, Comm. Sub. for SB 680.

3 Due to the scheduled termination of the business franchise tax (W.Va. Code §§11-23-1 et seq.) as of January 1, 2015, for purposes of this article, all following specific references to the applicable tax laws will be confined to West Virginia’s corpora-tion income tax statute (W.Va. Code §§ 11-24-1 et seq.).

4 Subparagraphs (1) and (2), referring to interests in REMICs, REITs, RICs and other securitized pools of debt in-struments, are omitted as involving subjects falling outside the limited scope of this article.

(4) An interest in the right to service or collect income from a loan or other asset from which interest on the loan is attrib-uted as a loan described in the previous paragraph and in which the payment ob-ligations were solicited and entered into by a person that is independent, and not acting on behalf, of the owner; or

(5) Any amounts held in an escrow or trust account with respect to property de-scribed above.

W.Va. Code § 11-24-7b(d) (underlining added).

While the definition of “financial organization” for general purposes of the tax statute is exceedingly broad,5 and readily encompasses entities receiving income from the above-quoted list of interests and activities, the highlighted language, expressly excluding such income for purposes of applying the nexus presumption, effectively narrows the terms of the presumption in the cases of many financial service providers. Thus, if a non-domiciled financial organization’s only connections with West Virginia fall within the categories expressly excepted from the nexus presumptions, a plain reading of the law would be that, regardless of either the number of prospective customers from whom business in the excepted categories is solicited, or the magnitude of actual receipts within such categories, that organization would, at least, not be presumed to have nexus with the state.

5 Though space limitations preclude reproduction here of the full definition of the term “financial organization,” given the subject of this article, it is sufficient to recognize that it includes: “A corporation which derives more than fifty percent of its gross business income from one or more of the following activities: (i) Making, acquiring, selling or servicing loans or extensions of credit. Loans and extensions of credit include: (I) Secured or unsecured consumer loans; (II) Installment obligations; (III) Mortgages or other loans secured by real estate or tangible per-sonal property; (IV) Credit card loans; (V) Secured and unse-cured commercial loans of any type; and (VI) Loans arising in factoring; (ii) Leasing or acting as an agent, broker or advisor in connection with leasing real and personal property that is the economic equivalent of an extension of credit as defined by the Federal Reserve Board in 12 CFR 225.25(b)(5); (iii) Operating a credit card business; (iv) Rendering estate or trust services; (v) Receiving, maintaining or otherwise handling deposits; (vi) En-gaging in any other activity with an economic effect comparable to those activities described in subparagraph (i), (ii), (iii), (iv) or (v) of this paragraph.” W.Va. Code § 11-24-3a(a)(14)(C).



Moreover, as this paper suggests, it is conceivable that the nexus presumption thresholds, as limited by the exceptions of business activities from consideration in regard to such thresholds, may well present statutory defenses in the form of a safe harbor from expanded economic nexus. Whether the subject language actually operates in that manner involves several considerations.6

The prospect of such salutary treatment matters because the complex structures, typically involved in large, multi-state, debt-financed transactions, often include several distinct roles played by a multitude of entities, many of which are non-domiciled financial organizations. These roles include various insurers, loan servicing agents, escrow agents and trustees holding collateral, which, due to the inherent nature of the roles they play, not to mention regulatory and negotiated business considerations, often require that those entities be independent of the transaction’s principals (i.e. the lending, borrowing, purchasing and selling parties). For that reason, and the fact that the collateral securing the subject obligations often encompasses property situated in multiple jurisdictions, the prospect of those third parties’ exposure to state taxation, based on expanded nexus rules, often presents considerable uncertainty.

Although those same nexus rules are implicated by any multi-state lending activity, with the greatly escalated level of natural gas development in West Virginia, often involving both multi-state borrowers and their physically absent financiers and loan service parties, the frequency with which these issues have become relevant has increased in this state. Moreover, given the wide array of tax nexus rules applied to these and other debt-financing commercial transactions occurring across many states, a generic discussion of these issues should have relevance in the broader, multi-jurisdictional context.

A cursory survey of the tax regimes in other states reveals a wide variety of nexus rules in the interstate debt-

6 Moreover, if, on other grounds, such a financial organiza-tion has nexus with West Virginia, it appears that the receipts from the excepted sources would be included in the numerator of its receipts for purposes of applying the state’s single receipts factor apportionment rule. Though the statute contains no ex-press cross-references between the description of the excepted sources and the description of receipts includable in the numer-ator of a non-domiciled financial organization’s receipts appor-tionment factor, the clear implication of the language of both is that the exception is only for nexus presumption purposes and, to the extent the conduct of such business is embraced by the description of financial organization income generally, receipts from such sources would be included in the numerator of the financial organization’s receipts factor.

financing context.7 Specifically, neighboring Kentucky has embraced a nexus presumption for financial organizations which is identical to West Virginia’s.8 In addition, Massachusetts’ version of such a presumption employs three, instead of two, independent tests, and uses quantitatively higher thresholds, presuming, subject to rebuttal, that activities are conducted on a regular basis within Massachusetts if 1) the activities are conducted with 100 or more Massachusetts residents during any taxable year, 2) the taxpayer has assets of $10 million or more “attributable to sources within [Massachusetts], or 3) the taxpayer has more than $500,000 of receipts “attributable to sources within [Massachusetts].”9

Minnesota’s nexus presumption omits the receipts threshold, but is based either on a person’s having solicited business with 20 or more persons within the state during any tax period, or a financial institution’s having combined assets and the absolute value of its deposits that are “attributable to sources within [Minnesota]” of $5 million or more.10 For purposes of the Minnesota presumption, “solicitation” is applied in an extremely broad fashion to include, inter alia, most mass media advertising.11 In addition, deposits are “attributable” to sources within Minnesota, generally, when such deposits are made by the State, its political subdivisions, agencies, or instrumentalities, its residents or physically present businesses; and assets, such as loans, are attributable to sources within Minnesota, generally, when secured by real or tangible personal property within Minnesota, when secured or unsecured consumer loans are made to residents of Minnesota, or secured or unsecured commercial loans are made where the proceeds are to be applied in Minnesota.12

7 In light of the extremely thorough and comprehensive treat-ment of the entire subject of state taxation of multistate bank op-erations presented in Randall J. Pielsnik’s paper, State Taxation of Multistate Banking Operations – A State-by-State Analysis, most other discussions of the subject would also be regarded as relatively “cursory.” Randall J. Pielsnik, State Taxation of Multi-state Banking Operations – A State-by-State Analysis (pts. 1 & 2),, 18 Journal of State taxation no. 1, 1999, at 40; 18 Journal of State taxation no. 2, 1999, at 60.

8 Ky. Rev. Stat. Ann. § 136.520.9 Mass. Gen. Laws ch. 63, § 1. 10 Minn. Stat. § 290.015(2).11 Id. § 290.015(1)(d).12 Note that “financial institution credit card and travel and

entertainment credit card receivables must be attributed to the state to which the credit card charges and fees are regularly billed.” Id. § 290.191(11)(l).



For the most part, the remaining states either retain a physical presence rule for nexus or, if applying economic nexus concepts, impose thresholds not as rebuttable presumptions, but as mandatory tests of taxable nexus.13 However, even those states, which still rely on physical presence, treat the holding of in-state collateral as a sufficient physical presence to establish nexus.14

Against that mosaic of varying state rules, a sharper focus on the statutory language, describing West Virginia’s relatively long-standing version of presumed nexus, invites the inquiry as to whether it provides potential defenses to remote financial service providers, both against broadly applied economic nexus, and even against aspects of physical presence nexus. As discussed below, those potential defenses rest, not so much on the relatively low quantitative nexus presumption thresholds for solicited customers and actual receipts sourced to West Virginia, as on the broad exceptions to the categories of activities and revenue used to apply those thresholds.15

On the face of the West Virginia statute, it must be recognized that the first threshold for presuming nexus (involving whether at least 20 customers were merely solicited for certain categories of financial service business) is separated from the second (involving gross receipts from such business) by the disjunctive “or,” and thus each must be treated as an independent threshold for presuming nexus.16

A further consideration, as to the potential “safe harbor” use of the thresholds, is presented by the terms of those exceptions which require that the payment obligations, arising pursuant to the underlying loan, be “solicited and

13 Pielsnick, supra note 7. See also Jerome R. Hellerstein et al., State taxation ¶ 6.30 (3d ed. Supp. 2013).

14 Hellerstein, supra note 13, at ¶ 6.31[6][a].15 Nothing in the statutory language appears to contem-

plate that, for purposes of the exception for certain income sources when applying the nexus presumption, there is any dif-ference in the kind of business, the solicitation of which falls within the 20-solicited-customer threshold, as compared to the kind of business for which the quantity of actual annual receipts are counted toward that separate threshold.

16 The statute uses the phrase “during any year” in prescrib-ing the application of these thresholds. Clearly, the only work-able construction of the reference to “during any year,” is that the thresholds are to be applied retroactively to each tax year standing on its own.

entered into by a person that is independent, and not acting on behalf, [sic] of” the provider of the putatively excepted financial services. Here, the use of the conjunctive “and” operates to impose an interdependent, two-part, exception to the exception and, thus, somewhat narrows the circumstances whereby the lack of independence between the lender and the other participating financial service providers bars the latter from the benefit of the exception to otherwise presumed nexus. Thus, to satisfy the excepted categories using that language, the third party financial service provider claiming the benefit of the exception must be independent of the party or parties, which are both soliciting and entering into the loan.

Far more important than these narrow phrasing considerations is whether, when nexus can be found under general principles, a failure to meet the statutory nexus presumption thresholds, as limited by their exceptions, will actually operate to ultimately preclude a finding of nexus.

To be certain, states may, legislatively, limit the operation of their tax power to fall short of the reach which constitutional jurisprudence otherwise permits.17 Thus,

by expressly providing that “those contacts with this State reasonably and exclusively required to … complete the acquisition or disposition of the property, the servicing of the property or the income from it, the collection of income from the property or the acquisition or liquidation of the collateral relating to the property, shall not be a factor in determining whether the owner is engaging in business in this state,” it may be said that the West Virginia Legislature has, at least as to those financial service providers, which are independent of the parties who solicited and entered into a secured loan’s payment obligations, intentionally declined to invoke any of the general arguments for economic nexus based on use of the courts, or even certain physical presence, etc.

Therefore, the threshold requirements for presumption of nexus (and exceptions therefrom) arguably constitute a statutory safe harbor for taxpayers which may have certain physical presence in the state (or other indicia of economic nexus), but do not meet the thresholds for presumed nexus. For example, Washington deems a person to have substantial nexus for purposes of its Business and Occupation Tax in a manner comparable

17 Hellerstein, supra note 13, at ¶ 8.02[5][a].


to the West Virginia income tax threshold.18 However, Washington Administrative Code § 458-20-19401 indicates that a foreign company with a physical presence in Washington nonetheless fails to have substantial nexus, despite such physical presence, because it fails to meet the statutory threshold, and the Department of Revenue of Washington State has gone so far as to expressly state that the statutory threshold creates a “safe harbor” for nonresidents and foreign businesses.19

If West Virginia’s statutory threshold for presuming nexus, particularly as expressly limited by the exceptions of certain receipts and contacts in applying that threshold, can also be read to similarly create a safe harbor for non-domiciled financial organizations, then, it follows that a financial organization, failing to meet the thresholds, will not have taxable nexus with West Virginia. Thus, that conclusion can be reached, even if the organization has receipts in excess of $100,000 or contacts with more than 20 persons from West Virginia, as long as those receipts and contacts fall within the broad exceptions to the categories of income and activities used to apply those thresholds.

Finally, in circumstances where, by meeting the economic nexus thresholds (even as expressly limited by the exceptions), the protection of the putative safe harbor cannot be legitimately invoked, the question remains: “what showing must be made to rebut the rebuttable presumptions and still avoid a conclusion of an organization’s having nexus?” In forming an answer to that question, one should at least consider the implications of the various openings in the same statute for a financial organization to rebut a presumption that certain elements of its receipts should otherwise be included in its receipts factor numerator.20

18 Wash. Rev. Code § 82.04.067(1)(c) (“(1) A person en-gaging in business is deemed to have substantial nexus with this state if the person is: . . . (c) A nonresident individual or a business entity that is organized or commercially domiciled outside this state, and in any tax year the person has: (i) More than fifty thousand dollars of property in this state; (ii) More than fifty thousand dollars of payroll in this state; (iii) More than two hundred fifty thousand dollars of receipts from this state; or (iv) At least twenty-five percent of the person’s total property, total payroll, or total receipts in this state.”).

19 Wash. Admin. Code § 458-20-19401(3) Example 2; Eco-nomic Nexus Questions and Answers, Department of Revenue Washington State, http://dor.wa.gov/content/findtaxesandrates/bandotax/ economicnexusqna.aspx (last visited Feb. 15, 2014).

20 W.Va. Code §11-24-7b(g)(1).

Specifically, in the list of income sources includable in a financial organization’s receipts numerator are rebuttable presumptions based on, among other things, a showing that all of a loan’s proceeds “were applied and used by the borrower entirely outside of this State.”21 Further, in the case of, at least, “merchant discount income derived from financial institution credit card holder transactions with a merchant located within this State,” a rebuttable presumption is that the merchant’s location is in West Virginia if the address shown on its invoice to the credit card issuer is in the state.22

Thus, by extending the substantive rationales of those grounds, beyond the particular types of receipts described, it might well be argued that a showing of the existence of the same (e.g., location of actual use of loan proceeds being where merchants receive net credit card proceeds), might be seen as engaging the exclusion of many other types of financial service receipts in the provider’s West Virginia numerator.23

Therefore, though untested in any reported West Virginia administrative, much less judicial, in-state ruling, on their face there are, at least, plausible grounds to contend that, in many multi-jurisdictional commercial loan transactions, that State’s statutory economic nexus thresholds, as expressly limited to certain kinds of financial service income and activities, may provide legal defenses to findings of nexus. Thus, as to absent and independent financial organizations, providing services ancillary to those of the primary lenders, those presumptions may well offer safe harbors from a nexus finding, despite the ruling in MBNA or even having certain physical presence via legal title to loan collateral.

21 Id. §11-24-7b(g)(1)B), (D) and (E).22 Id. §11-24-7b(g)(1)(G). 23 Of course, the merchant discount rule implicates a fur-

ther level of interpretation and analysis as to how the term “loca-tion” is to be construed in the context of other types of financial service receipts. Since the express concept of a “merchant’s” location strongly implies an objectively determinable physical location of a retail sale, application of the location-of-use-of-loan proceeds concept to many other financial services performed for physically absent lenders could serve to rebut an in-state nexus finding.



Getting to the Source: Illinois Department of Revenue Issues Emergency Regulations that Provide Guidance for Sourcing Sales in Light of the Hartney DecisionGeorgiy S. Kotanchiyev, Esq.Georgetown University Law Center (LL.M. Candidate)Washington, D.C.Phone: (814) 746-6738E-mail: [email protected]

O n November 21, 2013, in Hartney Fuel Oil Co. v. Hamer,1 the Illinois Supreme Court invalidated the longstanding sourcing regulations for local

retail occupation taxes (“ROTs”). As expected, this void left much uncertainty concerning the question of where retailers engaged in selling activities in multiple Illinois ju-risdictions should source their sales. Finally, on January 22, 2014, the Illinois Department of Revenue (“Depart-ment”) issued emergency regulations interpreting the rel-evant statutes in light of the Hartney decision in order to provide such retailers and local governments with much-needed guidance concerning the sourcing of sales.

BackgroundHartney Fuel Oil Company (“Hartney”), a retailer of fuel oil, maintained its home office in Forest View, Cook County, Illinois. From its home office, Hartney set fuel prices, marketed products, cultivated customer relationships, and performed a number of other administrative tasks. Hartney also maintained a “sales” office in Mark, Putnam County, Illinois, where it accepted all of the purchase orders. For a flat fee, a local business provided limited office space and the services of a clerk to accept the orders by phone. In structuring its operations this way, Hartney hoped to avoid ROTs imposed by Forest View, Cook County, and the Regional Transportation Authority.

The State of Illinois authorizes counties, municipalities, and regional transportation authorities to impose ROTs on retailers of tangible personal property.2 Though labeled

1 2013 IL 115130 (November 21, 2013).2 Home Rule County Retailers’ Occupation Tax Act, 55

ILCS 5/5-1006 (West 2012); Home Rule Municipal Retailers’ Occupation Tax Act, 65 ILCS 5/8-11-1 (West 2012); Retail

“retail occupation taxes” ROTs are simply Illinois’ version of sales taxes. While the statutes provide the applicable tax rates and the items subject to tax, they do not provide much guidance on where a sale is properly located or sourced for tax purposes. Although the Department had regulations in place at the time that provided sourcing guidance, the conflicting interpretations of these regulations gave rise to Hartney’s audit and the subsequent litigation.

According to Hartney, the plain reading of the regulations provided a bright-line test which sourced sales to where the purchase orders were accepted.3 Based on this interpretation, and the absence of local sales tax in Mark, Hartney routed all purchase orders to that office. Conversely, the Department believed the regulations instead presented a fact-intensive inquiry into the totality of the circumstances surrounding the sales. Because the bulk of the selling activities were carried out from Hartney’s home office in Forest View, the Department determined that the sales should have been sourced there. As a result, the Department audited Hartney’s sales from January 1, 2005, to June 30, 2007, and assessed a tax liability of over $23 million including interest and penalties. Hartney paid the assessment under protest and sued for a refund. The circuit court held in Hartney’s favor, agreeing that the regulations established a bright-line test for sourcing sales, and the appellate court affirmed the decision. The Department appealed the decision to the Illinois Supreme Court.

Transportation Authority Act, 70 ILCS 3615/4.03 (West 2012).3 Hartney relied principally on the following provision:

If the purchase order is accepted at the sell-er’s place of business within the county or by someone who is working out of that place of business and who does not conduct the busi-ness of selling elsewhere within the meaning of subsections (g) and (h) of this Section, or if a purchase order that is an acceptance of the seller’s complete and unconditional offer to sell is received by the seller’s place of busi-ness within the home rule county or by some-one working out of that place of business, the seller incurs Home Rule County Retail-ers’ Occupation Tax liability in that home rule county if the sale is at retail and the purchaser receives the physical possession of the prop-erty in Illinois.

See Hartney, 2013 IL 115130, ¶48 (quoting Ill. Admin. Code §220.115(c)(1) (superseded by emergency rulemaking, 38 Ill. Reg. 4164)) (emphasis by the court).

SALES TAX




Hartney Decision Provided Clarity, But Left UncertaintyOn November 21, 2013, the Illinois Supreme Court (“Court”) held that the Department’s regulations were invalid because they established a bright-line rule for sourcing sales based on where purchase orders were accepted. The Court determined that such regulations impermissibly narrowed the scope of the ROT statutes since they did not prescribe a fact-intensive inquiry as contemplated by the Court’s prior decisions. Moreover, by permitting a single, potentially minor step to govern where the business of selling was taking place, the regulation was inconsistent with the legislature’s intention. Notwithstanding the Court’s invalidation of the regulations, it applied the Illinois Taxpayers’ Bill of Rights and ordered an abatement of $23 million due to Hartney’s reliance on the flawed regulations.

The ROT statutes allow local governments to impose a tax on the business of selling, not on the sale itself. The Court cited Ex-Cell-O Corp. v. McKibbin, where it defined the “business of selling” as a “composite of many activities” the determination of which required a fact-intensive analysis of the surrounding facts and circumstances.4 Furthermore, the Court determined that the legislative intent of the statutes was to allow local governments to enact ROTs to place some of the burden of paying for public services on the retailers receiving their benefits.5 These principles guided the Court’s analysis in Hartney.

Although Hartney conducted most of its selling activities – marketing, pricing, and maintaining inventory – in the Forest View office, it routed its purchase orders for acceptance to the Mark office. Other than the clerk accepting orders on Hartney’s behalf, no other selling activities were conducted in Mark. With this shift, Hartney avoided any ROT liability to Forest View, Cook County, and the Regional Transportation Authority. Effectively, this resulted in much more than a mere shift in ROT liability. Given that Mark does not impose any ROTs, Hartney entirely avoided all ROT liability. Nevertheless, Hartney was still able to enjoy the local government benefits provided by Forest View, Cook County, and the Regional Transportation Authority. Because such a result was inconsistent with the legislature’s intent, and since the regulations focused solely on where purchase orders were accepted, the court struck down the regulations.

4 Id. at ¶32 (citing Ex-Cell-O Corp. v. McKibbin, 383 Ill. 316, 321-22 (1943)).

5 Id. at ¶34 (quoting Syithoid Singing Club v. McKibbin, 381 Ill. 194, 199 (1942)).

Fortunately for Hartney, tax agencies are bound by their own interpretations of the law – even if they are flawed. The Taxpayers’ Bill of Rights Act requires the Department to abate taxes and penalties assessed based upon erroneous regulations.6 Although Hartney’s approach to ROT liability was not consistent with the statute or the Court’s precedent, it was consistent with the regulations provided at the time. Since Hartney relied on the erroneous regulations, the Department had a duty to refund the penalties and ROTs it had received for Forest View, Cook County, and the Regional Transportation Authority.

All things considered, the decision could be described as a win for both parties. Hartney was refunded over $23 million it had paid in interest, penalties, and ROTs. Additionally, the Department obtained the answer they long sought – that sales for tax purposes must be sourced pursuant to a fact-intensive analysis. It is clear that going forward, setting up “sales” offices in a low- or no-ROT jurisdiction will not be a permissible tax planning practice. At the same time, the decision left much uncertainty concerning the application of the fact-intensive analysis the Court insisted on. Without proper guidance, it was unclear what facts should be considered and what weight they ought to be given when sourcing sales. 7

Illinois Department of Revenue Issues Emergency RegulationsOn January 22, 2014, two months after the Hartney decision, the Department issued emergency regulations that provided necessary guidance with respect to the application of the fact-intensive analysis for sourcing sales.8 The regulations make clear that local sales taxes

6 Id. at ¶67 (quoting Taxpayers’ Bill of Rights Act, 20 ILCS 25/20/4(c) (West 2008)).

7 Shortly after the Hartney decision, the Department posted a news announcement on its web site advising businesses to revise their procedures for reporting ROTs in order to comply with that decision and stating that the Department intended to promulgate regulations to provide additional guidance. The announcement further indicated that, in determining whether enforcement action is warranted against a retailer, “the Depart-ment will consider whether the taxpayer has made a reason-able, prompt, good faith effort to comply with the Court’s deci-sion.” The Department also held a public hearing on December 22, 2013. The announcement as updated can be found at http://www.revenue.state.il.us/News/HartneyDecision.htm.

8 While there are ten separate regulations that govern the sourcing of ROTs, the language of each is virtually the same. The only difference is that each regulation refers to a different


must be paid in the jurisdiction where the majority of the selling activities take place. The emergency regulations replaced the invalid regulations and went into effect immediately.

The regulations consist of three substantive parts. The first part consists of the basic principles underlying the ROT statutes, on which the Court has repeatedly relied.9 First, the tax is imposed on the business of selling and not on the actual sale. Second, determining where the business of selling takes place requires a fact-specific inquiry as to where selling activities are being performed. Third, the rationale behind the ROT statutes is to allow local jurisdictions to impose taxes on retailers taking advantage of local public services. In essence, the Department incorporated the principles that were articulated in Hartney.

The second part addresses common, simple selling operations that generally involve a single jurisdiction, in which circumstances the determination of where the business of selling takes place is very straightforward.10

The last part provides guidance to retailers, such as Hartney, with selling activities in multiple Illinois jurisdictions.11 It identifies four primary selling activities, the location of which would generally determine where a multi-jurisdictional retailer engages in the business of selling. The factors focus on where the offer, acceptance, inventory, and sales personnel are located. If the source is still unclear after considering these factors, the regulations provide five additional secondary factors. These secondary factors focus on where the following selling activities take place: marketing, receipt of contracts, deliveries, title passage, and administrative functions. After considering all of these factors, if it still cannot be determined where the retailer engages in the business of selling, the source will be determined in accordance with the underlying statutory purpose. In other words, because the ROT statutes were intended to impose taxes on retailers benefitting from public services, the regulations will be interpreted in light of that principle.

type of taxing jurisdiction. Emergency regulations were issued for all ten, but for convenience, this article only refers to the regulation governing county ROTs.

9 86 Ill. Admin. Code § 220.115(b) (as amended by emer-gency rulemaking, 38 Ill. Reg. 4164).

10 Id. § 220.115(c).11 Id. § 220.115(d).

ConclusionThe Hartney decision provided no guidance as to the application of the fact-specific analysis required for sourcing. The Department’s emergency regulations, however, provide much of the guidance that was lacking – primarily to retailers engaged in selling activities in multiple Illinois jurisdictions. In all, the hierarchy of factors provided in the emergency regulations allows most retailers to easily determine where they are engaged in the business of selling for ROT purposes. In addition to the emergency regulations, the Department has also filed proposed permanent regulations with the Joint Committee on Administrative Rules. Thus, while the emergency regulations temporarily provide much-needed guidance, it appears that permanent regulations will likely be forthcoming. However, because the rulemaking process takes at least 90 days, it is not clear at this point whether or to what extent the permanent regulations will differ from the emergency rules.



The Grow New Jersey Incentive Program: An Economic Development “Game-Changer” for New Jersey?

Dan Breen, CPA, Esq.Jones Lang LaSalleEast Rutherford, NJPhone: (201) 528-4427E-mail: [email protected]

L ast September 18, New Jersey Governor Chris Christie signed the New Jersey Economic Opportunity Act of 2013, significantly revamping

the state’s incentive system. The new law collapsed five incentive programs into two; the Economic Redevelopment and Growth Grant (“ERG”), designed to facilitate project development, and the Grow New Jersey Assistance Program (“Grow NJ”), intended to assist in attracting new, and retaining existing, jobs in New Jersey.1

Christie indicated that the new incentives would make New Jersey, which is “competing with other states every day,” more competitive.2 The state is “aggressively push(ing)” Grow NJ in particular “to encourage businesses to stay or move within its borders.”3 With the Northeast still “struggling to climb out of the recession,” neighboring states New York and Pennsylvania “have been watching New Jersey’s moves, and seem to be gearing up for a combative response.”4

Of the two programs, Grow NJ is most likely applicable to companies considering maintaining or expanding their workforce in New Jersey. How does the program work?

1 The Business Employment Incentive (“BEIP”), Business Retention and Relocation Assistance Grant, and Urban Transit Hub Tax Credit (“UTHTC”) Programs are being phased out.

2 Matt Friedman, Christie signs bill to expand corporate tax breaks in N.J., the Star-ledger (September 18, 2013) (avail-able at http://www.nj.com/politics/index.ssf/2013/09/christie_signs_bill_to_expand_corporate_tax_breaks_in_nj.html).

3 Julie Satow, Tax Break as a Not-So-Secret Weapon, the new York timeS (January 7, 2014) (available at http://www.ny-times.com/2014/01/08/business/new-jersey-enticing-business-es-with-revamped-tax-credit-program.html?smid=pl-share&_r=0).

4 Id.

CREDITS AND INCENTIVES Why do neighboring states view it as a threat? And – most importantly – how is it working, a few months after the initial applications were considered in December, 2013?

The Grow NJ Program: Eligibility

Grow NJ provides tax credits to businesses (with some enumerated exceptions, including point-of-sale retail locations) located in eligible areas of the state, meeting minimum capital investment and job creation/retention thresholds, and otherwise satisfying program eligibility requirements. Should the company awarded the credits have insufficient tax liability against which to absorb them, the program allows for the realization of benefit through sale of the credits to third parties, as detailed below.

• Eligible Areas: Projects must be located in a Quali-fied Incentive Area in order to be eligible for Grow NJ benefits.5 Such areas include Urban Transit Hub Mu-nicipalities; Garden State Grown Zones (“GSGZs”); Distressed Municipalities; and projects in Priority or Other Eligible Areas.6 “Mega Projects” located in des-ignated Port and Aviation Districts can also qualify.7

• Capital Expenditure Requirement: Minimum spending is determined on the basis of expenditures per square foot, and varies according to the segment (office vs. industrial) and nature (new construction vs. rehabilitation) of the project in question. For industrial space, the minimum cost per square foot is $60 for new space, and $20 for rehabilitation; for office space, the thresholds are $120 and $40, respectively.8 (The thresholds are reduced to ⅔ of the above amounts in eight southern counties and GSGZs.) Eligible costs include improvements, equipment and some “soft costs,” including landlord expenditures with a “look-back” period of up to two years before application.9

• Job Creation/Retention: Thresholds vary by sec-tor. For manufacturers and “technology startup” busi-nesses, companies must create 10 or retain 25 “at risk” positions; for other “targeted industries,” (includ-ing defense, energy, finance, health, life sciences, logistics, technology, and transportation), minimums

5 N.J. Rev. Stat. § 34:1B-2436 Id.7 Id.8 Id. § 34:1B-244.3.b9 Id. § 34:1B-243




are 25 and 35, respectively; for all other businesses, minimums are 35 and 50.10 These amounts are re-duced to ¾ of the above amounts in eight southern counties and GSGZs.

• Other Eligibility Requirements: Participants must certify that the availability of the incentive is a “mate-rial factor” in their decision to move to or retain their New Jersey operations,11 and that project construc-tion will meet prevailing wage,12 affirmative action13 and minimum state “green” standards.14 The project would also need to demonstrate that the “net benefit” (i.e., tax revenues) to be received by the State would exceed the incentives being provided.15

Calculating The Potential Grow NJ Benefit

Eligible projects receive a “base” credit per eligible employee, per year, augmented by eligible “bonuses” and subject to various caps. The annual credit is awarded for up to ten years.16 Thus the total credit for an employee qualifying for a $7,500 annual credit could be as much as $75,000 in total.

• Base Credit: While projects can benefit if located in any Qualified Incentive Area, available base cred-its will vary based on the designation of the area in which the project is located. The base credit in the nine Urban Transit Hubs and four GSGZs is $5,000. There are 38 Distressed Municipalities, in which the base credit is $4,000 to start. The amount for other eligible communities ranges from $1,000-3,000, sub-ject to a cap based on state income tax withholding.17

• Bonus Credits: Companies eligible for Grow NJ can qualify for one or more multiple “bonuses” that en-hance their available credit. Bonus credits – per eligi-ble employee, per year - are available based on vari-ous project characteristics, including the following:

10 Id. § 34:1B-244.3.c11 Id. § 34:1B-244.3.d12 Id. § 34:1B-245.4.i13 Id. §18A:64-85.43.d14 Id.15 Id. §34:1B-114.3.a16 Id. § 34:1B-24317 Id. § 34:1B-246

o Targeted Industries: Businesses engag-ing in targeted sectors as defined by the New Jersey Economic Development Author-ity (“NJEDA”) qualify for a $500 bonus. Cur-rently designated industries include defense, energy, finance, health, life sciences, logis-tics, manufacturing, technology and transpor-tation.18

o Total Jobs: Projects creating or retaining 250 or more jobs can qualify for a bonus ranging from $500 to $1,500 (tiered, and maximized at 1,000 or more jobs).19

o Average Salary: For each 35% that the av-erage wage of project employees exceeds the applicable County (or, in the case of a GSGZ, municipal) average wage, the bonus is $250 to a maximum of $1,500.20

o Excess Investment (Industrial Projects Only): For each 20% that actual project expenditures exceed the minimum require-ment detailed above, a project can qualify for a $1,000 bonus to a maximum of $3,000 ($5,000 for Mega Projects and in GSGZs).21

o Geographic Location: Bonuses are avail-able for projects located in various desig-nated areas, e.g., Deep Poverty Pockets ($1,500), and those in proximity to commuter or light rail stations, and others.22

o Environmental Bonuses: Bonuses are available for projects based on LEED des-ignation, “substantial environmental reme-diation” and the generation of on-site solar energy exceeding 50% of project electrical requirements.23

• Caps and Limitations: Grow NJ does not cap the amount of credits that can be awarded through the program as a whole. However, participating compa-

18 Id. § 34:1B-246.5.c.819 Id. § 34:1B-246.5.c.720 Id. § 34:1B-246.5.c.621 Id. § 34:1B-246.5.c.5,1022 Id. § 34:1B-246.5.c23 Id. § 34:1B-246.5.c.9


nies may be subject to various limitations on their ability to claim the benefits.

o Retained, “At Risk” Employees: Credits for retained – as opposed to newly-created – jobs are reduced by 50% from the amounts calculated above.24

o Total Withholding Limitation - Priority and Other Eligible Areas: Grow NJ imposes a cap on benefits available to businesses with qualifying projects in priority and other eligi-ble areas. Credits claimed by those projects cannot exceed 90 percent of the withholdings of the business from the qualified business facility. This limitation does not apply to proj-ects in other Qualified Incentive Areas.25

o Employee Credit Cap: The total credit (in-cluding both base and available bonuses) that can be awarded per employee, per year is capped based on the geography (or, in some cases, the nature) of a particular project. The amount increases based on the designation; for instance, the maximum amount available in an Other Eligible Area is $6,000, while the limit for a Mega Project or in a GSGZ is $15,000.26

o Business Credit Cap: The maximum amount of credit that a business may claim is also limited based on geography or project classification. In GSGZs or for Mega Proj-ects, the maximum is $30 million per year, with lower amounts in other designated ar-eas, and with the maximum credit for busi-nesses in Other Eligible Areas being only $2.5 million.27

o Discretionary Review: Projects approved for $4 million or more annually will be award-ed “funds necessary to complete the project” at NJEDA’s discretion. In effect, NJEDA has the right to reduce awards to eligible larger projects to amounts lower than those for

24 Id. § 34:1B-246.5.e(2)25 Id. § 34:1B-246.5.f.5,626 Id. § 34:1B-246.5.d27 Id. § 34:1B-246.5.f

which the company would qualify under the formula.28

• Mega Projects: Certain projects located in desig-nated geographic areas (port and aviation districts, or urban transit hubs) and involving significant job creation (250 or more) and, in some cases, capital investment are designated “Mega Projects,” provid-ing a base $5,000 credit, an employee credit cap of $15,000, and a business cap of $30 million.

• Disaster Recovery Projects: Projects located in qualified incentive areas, on property damaged or de-stroyed as a result of a federally-declared disaster, and demonstrating that, having exhausted available disaster recovery funds, additional funding is nec-essary to complete the project, can qualify for up to $2,000 in credits per eligible new or retained job.

Realizing The BenefitGrow NJ benefits are received in the form of credits against New Jersey’s Corporate Business Tax (“CBT”) or Insurance Premiums Tax.29 Recipients with insufficient tax liability against which to utilize the credits may sell excess credits to other businesses that can use them in exchange for cash.30 Purchasers obtain the credits at a negotiated discount which serves to reduce their effective tax costs (though the law requires that they sell for no less than 75 cents on the dollar31); as such, the original recipient does not receive a “dollar for dollar” benefit with respect to credits sold.

Compliance and ClawbacksInitial and annual reporting will be required, and participants must maintain at least 80% of their employment commitments for 1.5 times the duration of the benefits – i.e., 15 years for a ten year grant.32 Failure to satisfy these commitments may subject the company to recapture, or “clawback,” of previously awarded benefits.

Program Activity and ImplicationsNJEDA has approved 15 awards through February, 2014, with total credits totaling nearly $300 million. The projects approved thus far cover diverse geographies

28 Id.29 Id. § 34:1B-209.3.c(3)30 Id. § 34:1B-209.1.3331 Id.32 Id. § 34:1B-243.2



(14 municipalities, in 8 of New Jersey’s 21 counties) and multiple business sectors (e.g., media, IT, food processing, pharma, and recycling, among others).

The level of benefit for which companies may qualify under Grow NJ is a significant differentiator relative to New Jersey’s bordering states of New York, Pennsylvania and Delaware. While all three of these states offer incentives, the magnitude of the potential benefits are generally considerably lower than for Grow NJ. For adjacent sections of New York, in particular, the “incentive gap” may represent a substantial disadvantage, given the Empire State’s generally higher operating costs. New York City may be particularly vulnerable, given the unexpected expiration of several Lower Manhattan incentive programs last year (though they may be renewed in the current legislative session), and what the New York Times recently described as “wariness” of the City’s new Mayor, Bill De Blasio, in the business community.33

Grow NJ has not, however, been immune from criticism. First of all, the program is extremely complex relative to other states’ incentive programs. Moreover, NJEDA has significant discretion in not only the determination of eligibility, but also in the application of the various “bonuses” and other program elements – creating a degree of unpredictability. In other areas, however, the program’s lack of flexibility may result in undesirable policy outcomes; for instance, many suburban communities may lack the tools to compete with urban or out-of-state alternatives given the withholding cap, and the fact that many areas of the state are not qualified incentive areas. Finally, the capital investment requirement may restrict the ability of companies to secure retention bonuses for renewal of “in place” leases, given the potential difficulty of meeting the minimum thresholds in such cases; this could put New Jersey at a disadvantage relative to other states that would offer incentives in order to attract such projects.

Conclusion

Grow NJ is initially popular in the business community, and has generated not only significant “buzz” but substantial early activity. Despite the complexity of the program, it provides New Jersey with a competitive advantage against neighboring states, and the magnitude of potential benefit is such that even companies considering lower-cost jurisdictions outside the region may consider establishing or maintaining operations – and jobs – in New Jersey.

33 See Satow, supra note 3

INCOME TAX

District Court Rules Texas Taxpayers Cannot Elect to Use Three-Factor MTC Apportionment in lieu of Texas’s Single-Factor ApportionmentDoug Sigel, Esq.Ryan Law Firm, LLPAustin, TexasPhone: (512) 459-6611E-mail: [email protected] Olga Goldberg, Esq.Ryan Law Firm, LLPAustin, TexasPhone: (512) 459-6607E-mail: [email protected]

Graphic Packaging Corp. v. Combs, Cause No. D-1-GN-12-003038, in the 353rd Judicial District Court of Travis County, Texas, is one of only a

few Article III Multistate Tax Compact (“MTC”) cases to be heard before a court and the first of a growing number pending in Texas. On January 15, 2014, Judge Darlene Byrne denied taxpayer Graphic Packaging Corporation’s (“Graphic”) motion for summary judgment and granted the Texas Comptroller of Public Accounts’ (the “Comptroller”) motion for partial summary judgment. The effect of Judge Byrne’s ruling is that Graphic had no right to elect to use the three-factor apportionment formula under Articles III and IV of MTC instead of the single-factor gross receipts formula in the Texas franchise tax, Tex. Tax Code § 171.106(a).

Judge Byrne’s order did not discuss the reasoning behind her decision. A discussion of both parties’ arguments and rebuttals is therefore the best way to understand this case and Texas law on the MTC as it currently stands.

BackgroundArticle III of the MTC permits taxpayers whose income is subject to income tax to elect the three-factor apportionment formula in Article IV, which is based on the average of property, payroll, and sale factors.

Tex. Tax. Code § 171.106(a), the franchise tax apportionment formula, states, “Except as provided by this section, a taxable entity’s margin is apportioned to this state . . . by multiplying the margin by a fraction, the numerator of which is the taxable entity’s gross receipts





from business done in this state . . . and the denominator of which is the taxable entity’s gross receipts from its entire business.”

Texas adopted the MTC in 1967 and codified it as Tex. Tax Code § 141.001 in 1982. In 1969, the Legislature adopted a single-factor apportionment formula based on gross receipts as part of the Texas franchise tax calculation. The Legislature also gave taxpayers the option to petition the Comptroller to use a different apportionment formula that included other factors such as property and payroll. Twenty years later, the Legislature removed the alternative apportionment option.

In 2006 (effective 2008), the Legislature repealed and completely overhauled the franchise tax. Whereas the former franchise tax base was either taxable capital or earned surplus, the new franchise tax base is a taxpayer’s taxable margin, and the tax is commonly called a “margin tax.” Before 2006, Tex. Tax Code § 171.112(g) specifically stated that Chapter 141 did not apply to the franchise tax. The new margin tax contains no such provision. However, the Comptroller’s position on the three-factor apportionment election has been clear since at least 2010: single-factor apportionment is the only permissible apportionment formula in the margin tax, and it is mandatory.1

Graphic is a Georgia-based corporation that designs, manufactures, and sells packaging for consumer products. Graphic does business throughout the United States and internationally. The extent of its business in Texas is retail and wholesale activities. The proportion of Graphic’s payroll and property in Texas compared to its payroll and property nationwide is therefore understandably smaller than the proportion of its gross receipts (or sales) in Texas.

Threshold Issue: Is the Texas Franchise Tax an Income Tax for Purposes of the MTC?The Article III election applies only to taxpayers subject to an “income tax.” Article II defines an “income tax” as “a tax imposed on or measured by net income including any tax imposed on or measured by an amount arrived at by deducting expenses from gross income, one or more forms of which expenses are not specifically and directly

1 Comptroller Guidance, STAR No. 201007003L (July 1, 2010); Comptroller’s Decision Nos. 104,752 & 104,753, STAR No. 201108230H (Aug. 18, 2011); Comptroller’s Decision No. 105,941, STAR No. 201201352H (Jan. 19, 2012); Comptroller’s Decision Nos. 106,508, STAR No. 201207561H (July 13, 2012); Comptroller’s Decision No. 106,734, STAR No. 201208576H (Aug. 10, 2012); Comptroller’s Decision Nos. 106,298, 106,299, & 106,300, STAR No. 201209619H (Sept. 6, 2012); Comptrol-ler’s Decision No. 107,323, STAR No. 201304694H (Apr. 9, 2013).

related to particular transactions.” Thus, if the Texas franchise tax is not an income tax, there is no question that Graphic cannot elect Article IV apportionment.

Graphic’s Argument. Graphic argued that the franchise tax should be judged by how it is calculated, rather than what it is labeled. Essentially, because taxable margin is calculated by subtracting an amount that includes indirect expenses from a taxpayer’s total revenue under Tex. Tax. Code § 171.101, the tax is an income tax under the MTC. For the years at issue, 2008-2010, a taxpayer subtracted the greater of 30% of total revenue, cost of goods sold, or compensation. Even though cost of goods sold and compensation include transaction-based expenses, these deductions include indirect expenses as well (i.e., overhead costs). Conversely, Graphic points out, under the MTC’s definition of a “gross receipts tax,” no deductions are allowed that would cause the tax to be considered an income tax, i.e., indirect expenses. See MTC art. II, §6.

Comptroller’s Argument. The Comptroller contended that the franchise tax is not a pure income tax under the MTC, but is rather a hybrid of income and gross receipts taxes. The Comptroller notes that not all business expenses are permitted to be subtracted from total revenue, but rather certain enumerated expenses that can be mutually exclusive.

The Comptroller also focused on legislative history that specifically stated that the franchise tax is not an income tax. In response, Graphic cited a number of U.S. Supreme Court cases that found that a tax is classified by what it measures, not what it is called.

Graphic’s Remaining ArgumentsTexas Legislature has not Affirmatively Repealed (or Purported to Repeal) the MTC

A member state can withdraw from the MTC pursuant to a specific, simple mechanism in Article X, ¶ 2: Enact a statute repealing the MTC. The Legislature has not enacted a statute repealing Tex. Tax Code Chapter 141. Graphic relied on several statutory analysis arguments to illustrate the Legislature’s approval of the MTC and the three-factor formula.

First, another provision of the franchise tax—combined group reporting—uses the payroll and property factors in Chapter 141 to define an entity excluded from the combined group.

Second, when the new franchise tax was enacted, Tex. Tax Code § 171.112(g), which explicitly excluded application of Chapter 141 from the franchise tax, was repealed. The



Comptroller replied that the entirety of section 171.112, titled “Gross Receipts for Taxable Capital,” was repealed because taxable capital was no longer the franchise tax base.

Third, neither Tex. Tax Code § 171.106(a) nor Article III is mandatory, so there is no conflict between the provisions. Article III is clearly an election, while section 171.106(a) has no words mandating its application. The Comptroller’s responded that section 171.106(a) begins with the words “[e]xcept as otherwise provided by this section,” and this indicates that all exceptions to single-factor apportionment are contained within section 171.106. Graphic then pointed out that these words were in the statute before the repeal of section 171.112(g) and that the Comptroller’s interpretation would render section 171.116(g) redundant.

If Single-Factor Apportionment Conflicts with Article III, the MTC must Prevail

In U.S. Steel Corp. v. Multistate Tax Comm’n, 434 U.S. 452 (1978), the U.S. Supreme Court held that the MTC is a valid compact that did not require Congressional approval because it does not encroach on federal jurisdiction (indeed, the purpose of the MTC was to keep state taxation away from federal preemption). The MTC is both a statute and a contract among states; Graphic argues that it is valid and enforceable as both. Texas cannot constitutionally pass laws that impair its obligations under the MTC. See U.S. Const., art. I, § 10; Tex. Const., art. I, § 16.

The Comptroller responded that Graphic was not a party to the contract at issue, the MTC, and thus could not have its rights impaired, even if the MTC was binding on Texas.

The Comptroller’s ResponseThe bulk of the Comptroller’s response was devoted to contending that the MTC is merely advisory, and is not binding law. The Comptroller argued that, despite U.S. Steel, the MTC does not have the indicia of a binding compact. The indicia are (1) a joint regulatory body, which involves states ceding some sovereignty, (2) reciprocal action is required for effectiveness, and (3) prohibition of unilateral modification or repeal. Northeast Bancorp, Inc. v. Bd. Of Governors, 472 U.S. 159, 175 (1985). Unsurprisingly Graphic’s and the Comptroller’s analyses of these factors yielded opposing conclusions. The Comptroller nevertheless claimed that, at best, the effect of the MTC is ambiguous, and any ambiguity must be interpreted against Texas ceding any of its sovereign taxing authority.

The Comptroller argued that states are permitted to determine their own apportionment factors both under

and outside of the MTC. It cited in support Moorman Manufacturing Co v. Bair, 437 U.S. 267 (1978). In that case, the Supreme Court upheld Iowa’s single-factor sales apportionment formula. Of course, Iowa was not an MTC member state (and still is not a full member) and so was not subject to MTC provisions.

The Comptroller further contended that the MTC permits its members to legislate around the three-factor formula in Article IV, § 18, the alternative or equitable apportionment section. Section 18 permits a state’s tax administrator to alter the apportionment formula by excluding any of the factors or by using any method that would “effectuate an equitable allocation and apportionment of taxpayer’s income.”

The scope of this provision has been debated for some time. The Comptroller interprets this provision expansively, as permitting the Texas Legislature to pass a law mandating a single-factor apportionment formula for all taxpayers. However, a more common interpretation is that Section 18 requires a case-by-case (or taxpayer-by-taxpayer) analysis. See Richard Pomp, Report of the Hearing Officer, Multistate Tax Compact Article IV: Proposed Amendments at 13-18 (Oct. 25, 2013) (proposing permitting industry-by-industry regulations under Section 18).

ConclusionUltimately, unless Graphic decides to appeal, it is impossible to know the basis for Judge Byrne’s interlocutory decision in favor of the State. There are three issues left for a court to decide; two issues are based on the constitutionality of Texas’s single-factor apportionment method and Texas’s franchise tax rate structure and one issue asks the court to waive penalties and interest.

Graphic Packaging is just the beginning of Texas taxpayers asserting a right to elect three-factor apportionment under the MTC. Nine Article III cases were filed in 2013 alone.2

2 Medtronic, Inc. v. Combs, Cause No. D-1-GN-13-002807 (filed Aug. 14, 2013); Hasbro, Inc. v. Combs, Cause No. D-1-GN-13-002873 (filed Aug. 20, 2013); AN Dealership Holding Corp. v. Combs, Cause No. D-1-GN-13-003213 (filed Sept. 12, 2013); Amphenol Corp. v. Combs, Cause No. D-1-GN-13-003471 (filed Oct. 4, 2013); Silgan Containers Manufacturing Corp. v. Combs, Cause No. D-1-GN-13-003732 (filed Oct. 30, 2013); H.J. Heinz Co. v. Combs, Cause No. D-1-GN-13-004033 (filed Nov. 26, 2013); Tempur Seal Int’l, Inc. v. Combs, Cause No. D-1-GN-13-004036 (filed Nov. 26, 2013); Michelin Corp. v. Combs, Cause No. D-1-GN-004071 (filed Nov. 27, 2013); Abercrombie & Fitch, Co. v. Combs, Cause No. D-1-GN-13-004243 (filed Dec. 18, 2013).


TAX LEGISLATION

State Nonresident Payroll Withholding Rules Present Complexity to Employers That Deploy a Mobile Workforce – Is It Time for a Federal Mandate?Sylvia F. Dion, MPA, CPAPrietoDion Consulting Partners LLCWestford, MAPhone: (978) 846-1641E-mail: [email protected]

IntroductionAs we move towards a service-based economy, many companies are expanding their multi-state and international footprint. This is often accompanied by the deployment of a mobile workforce. And while both in-house corporate tax professionals charged with state tax responsibilities and external State and Local Tax (“SALT”) advisors are quick to note that deploying a mobile workforce into multiple states may create nexus for corporate income, franchise, sales & use, and other entity-level business taxes, many tax professionals are less likely to focus on a company’s responsibility to withhold on the wages of employees who perform employment duties in nonresident states. However, as states continue to search for revenue sources and, some would argue, transfer their tax burden to out-of-state business and individual taxpayers, nonresident payroll withholding is an area that employers who wish to be compliant cannot ignore. Unfortunately, as is the case with state laws in general, there is a lack of uniformity regarding when an employer must withhold in nonresident states. While some states provide for either a day or dollar de minimis threshold, the majority of states require employers to withhold from the very first day or dollar earned in the state. This lack of uniformity requires employers that deploy a mobile workforce to comprehend and apply a patchwork of state rules. This is one reason federal legislation has been introduced in Congress, which would impose a uniform “days exceeded” threshold before a State could subject a nonresident employee to the state’s personal income tax and his employer to the State’s nonresident withholding and reporting requirements.

State Nonresident Withholding and the Lack of State UniformityWhen an employer deploys its workforce to states from which it is not based or of which it is not a resident, the

employer is required to withhold and remit state income taxes on the wages earned in the nonresident state. This is based on the concept that states are permitted to tax income that has a source in their state.

In general, withholding on the wages of nonresidents is required of an out-of-state employer if the employer “transacts business” in the state. States typically define “transacting business” for payroll withholding purposes as “[h]aving or maintaining within the state, directly or indirectly, an office, distribution house, sales house, warehouse, or other place of business, or otherwise operating or engaging in business within this state by or through any agent or other representative under the authority of the employer.”1 Thus, operating or engaging in any activity which is in line with the business of the employer, even if those activities were not sufficient to create “nexus” for corporate income/franchise or other business taxes, would likely be viewed as “transacting business” for nonresident payroll withholding purposes.

Despite this general requirement, some states provide a de minimis threshold that must be exceeded before an out-of-state employer is required to begin withholding. However, even in those states which have enacted or administratively provided for a de minimis threshold, there is lack of state uniformity as some states require that nonresident withholding begin once the nonresident has performed services in state for a certain number of days,2 while in other states the threshold is based on a nonresident employee’s earnings exceeding a certain dollar amount.3 To add further complexity, some “threshold” states do not have a “set days” or “exact dollar” threshold that must be exceeded before an employer is required to withhold on the nonresident’s wages, but instead base the threshold

1 See, e.g., Mass. 830 CMR 62B.2.1(2) (definitions).2 Although not an exhaustive list, states which permit a re-

prieve from withholding up until a certain number of days per-forming service in the state has been exceeded include: Arizona (60 days), Ariz. Rev. Stat. Ann § 43-403(A); Connecticut (14 days), Conn. Dept. of Rev. Services, AN 2010(3); Hawaii (60 days), Haw. Admin. Rules § 18-235-61-04 (b); Maine (10 days), Me. Rev. Stat. Ann. 36 § 5142(8-A); New Mexico (15 days), NMSA § 7-3-3(A)(2); and New York (14 days), NYS Dept. of Tax’n and Fin., TSB-M-12(5)I.

3 Although not an exhaustive list, states which permit a reprieve from withholding up until a specific dollar amount of in-state wages have been earned include: Idaho ($1,000 in-state wages within a calendar year), Idaho Admin. Rules § 35.01.01.871; Oklahoma ($300 in-state wages in a calendar quarter), Okla. Stat. 68 § 2385.1(e); and Wisconsin ($1,500 in-state wages in a calendar quarter), Wis. Stat. § 71.64(6).




on the nonresident employee’s specific situation. For instance, New Jersey’s nonresident withholding rule states that where it is expected that a nonresident employee will work only a short period of time within New Jersey and it is reasonably expected that the employee’s total wages for personal services rendered in New Jersey will not exceed the employee’s personal exemptions, the employer need not withhold or deduct any amount from the employee’s wages until the aggregate amount paid equals or exceeds the exemptions.4 Thus, an employer is required to have information specific to that employee in order to make a determination as to whether the employer must withhold New Jersey income tax.

Inconsistent Treatment Within a State as to Withholding, Information Reporting and Personal Income Tax FilingHowever, even in those states that provide a de minimis threshold, the rules regarding when an employer must begin to withhold may not necessarily be consistent with the same state’s information reporting requirements or the state’s nonresident personal income tax filing threshold. This inconsistent intrastate result can occur for various reasons such as where a state imposes different thresholds for withholding, reporting and filing purposes.

Connecticut, for example, is a “days” threshold state with different rules for nonresident withholding, information reporting and personal income tax filing. According to Connecticut’s guidance, articulated in a 2010 Department of Revenue Services (“DRS”) Administrative Announcement, AN 2010(3), an employer is not required to withhold Connecticut income tax from the wages paid to a nonresident employee for services performed in Connecticut if the nonresident employee works in Connecticut 14 or fewer full or partial days during a calendar year and is assigned to a primary work location outside of Connecticut. 5

However, regardless of this general rule, Connecticut AN 2010(3) adds that if an employer expects that a nonresident employee will work more than 14 days in Connecticut during a calendar year, the employer is required to withhold on all wages paid to the employee from the first day earned.6 Alternatively, if a nonresident

4 N. J. Rev. Stat. §54A:7-1; N.J.A.C. §18:35-7.2(b); New Jersey Form NJ-WT, page 3.

5 Connecticut Dept. of Rev. Services, Announcement - AN 2010(3), “14-Day” Withholding Rule for Nonresident Employees (1/11/2010).

6 For instance, if a nonresident’s anticipated annual work

employee is reasonably expected to work 14 or fewer days in Connecticut during a calendar year, but inadvertently works more than 14 days in the state, an employer would not be penalized for failing to withhold immediately (assuming there was a reasonable expectation of 14 or fewer days in Connecticut). In this situation, the employer would not be required to make a catch-up withholding adjustment, but would be required to commence withholding on wages paid to the nonresident beginning with the 15th day of service in Connecticut.

However, Connecticut’s “14-Day” withholding reprieve does not extend to an employer’s information reporting requirements. Connecticut AN 2010(3) clarifies that even though an employer is not required to withhold Connecticut income tax from the wages paid to a nonresident employee who works 14 or fewer days in Connecticut during a calendar year, an employer is still required to report the employee’s pre-threshold wages to Connecticut.7

Because an out-of-state employer is required to comply with Connecticut’s wage information reporting requirement (even if there was no requirement to withhold under Connecticut’s “14-Day” threshold) the reporting of the nonresident’s Connecticut wages would likely subject the nonresident employee to Connecticut’s personal income tax filing requirements. Furthermore, because the employer was not required to withhold Connecticut income tax, but was required to report those wages to the State, the nonresident could end up with a significant Connecticut tax liability.

As seen in the Connecticut example, even in threshold states that have issued adequate guidance, an employer must still understand how the “rule” works and how it impacts both the employer’s withholding and information

schedule is such that the nonresident will likely work in Con-necticut three days each month, or 36 days in the calendar year, the “14-Day” rule would not apply and the employer would be required to begin withholding Connecticut tax from the nonresi-dent’s wages from the first day in which the employee performs services in Connecticut. Note that this requirement would apply even if the employee ultimately ends up working 14 or fewer full or partial days in Connecticut.

7 Thus, even if no Connecticut income tax was withheld, employers must report all Connecticut wages on Form CT-941, Connecticut Quarterly Reconciliation of Withholding, and in the “state wages, tips, etc.” box of federal Form W-2. See also Con-necticut Form CT-W4NA - Employee’s Withholding Certificate Nonresident Apportionment.



reporting duties. Employees must also understand that their employer’s reprieve from withholding does not necessarily translate to a reprieve from filing a nonresident return. Additionally, in other states, a withholding “rule” may be based on informal guidance which fails to address all of the requirements, leaving taxpayers and their advisors to make a determination as to how the state’s “rule” should be applied.8 Another nuance is where a State’s withholding rules and personal income tax rules do not consistently conform to the Internal Revenue Code as of the same date, creating potential differences between what a state considers wages for withholding purposes and what it considers wages for personal income tax purposes.9 One final complexity that employers must comprehend are the rules in certain states where withholding is not required due to a reciprocity agreement between neighboring states.

Finally, not only are state nonresident rules complex, employers that are required to deduct and withhold state income tax from the wages of nonresident employees will generally be liable for the payment of the required tax whether or not it is collected from the employees. State payroll taxes are considered “trustee taxes” whether withheld or not. Therefore, in general, for purposes of assessment and collection, amounts required to be withheld and remitted (and any penalties and interest) are

8 A prime example here deals with the New York State De-partment of Taxation and Finance Withholding Tax Field Audit Guidelines issued on April 5, 2005. In its audit guidelines, the Department directed that its audit division should not make an assessment where an employer failed to withhold on the wages of a nonresident employee who worked in New York 14 or fewer days. Although New York’s guidance was not statutory or articu-lated in taxpayer administrative guidance, it became a common practice for many out-of-state employers to not withhold New York State income tax if they met the audit guidelines’ “14-day” rule. However, the audit guidelines did not specifically address the employer’s requirement to report the pre-14-day wages. More than seven years after the audit guidelines were issued, the Department finally issued administrative taxpayer guidance in TSM-M-12(5)I, Withholding on Wages Paid to Certain Non-residents Who Work 14 Days or Fewer in New York (July 5, 2012), which addressed both the withholding and information reporting requirements.

9 For example, see Mass. 830 CMR 62B.2.1 (3)(c), address-ing the differences between withholding requirement and tax-ability, which states: “Massachusetts withholding law is based on the current [IRC], while taxation of income is generally based on the [IRC] as of a certain date. Because of these differences between withholding requirements and taxability, employers may meet their withholding obligation yet employees may still be reburied to pay estimated taxes or agree to additional with-holding . . . .”

the liability of the employer.10 Further, for some companies, nonresident state withholding liabilities may represent a FAS 511 contingent reserve which must be recorded in accordance with Financial Accounting Standards.

Is a Federal Mandate Needed?As illustrated in the discussion above, employers must currently deal with nonresident payroll withholding rules that are not uniform from state-to-state and which may also provide a different threshold as to whether and when an employer must withhold state income tax versus when the employer must report those wages. The current structure not only places an undue administrative burden on employers, but subjects employees to the filing requirement in nonresident states as well as to potential exposure for underpaid nonresident state income taxes in situations where an employer was not required to withhold. The lack of uniformity in the state nonresident payroll withholding rules has been the focus of proposed federal legislation that would impose a uniform nonresident payroll withholding threshold on all states.

Currently, there are two companion proposals under consideration by the U.S. Congress. The first of the two proposals, H.R. 1129, was introduced on March 13, 2013, by U.S. Representatives Howard Coble (R-NC) and Hank

10 For instance, Connecticut employers who fail to comply with the requirements to withhold Connecticut income tax are subject to the following:

• Tax Due – The amount that was withheld or should have been withheld from the wages of the nonresident who performed services in the state.

• Late Payment Penalty - The penalty for late pay-ment or underpayment of tax due is 10% of the amount due on all returns including payments made with an electronically-filed Form CT-WH.

• Late Filing Penalty – Even if no tax is due, the Commissioner of Revenue Services may im-pose a $50 penalty for failure to file any return or report that is required by law to be filed.

• Interest – In the event a return is filed late, in-terest is computed on the underpayment at the rate of 1% per month or fraction of a month from the due date until the date of payment.

• Required Informational Returns - A penalty of $5 per statement (up to a total of $2,000 per calendar year) is imposed for failure to provide federal Form W-2 to each employee and a copy to DRS unless due to reasonable cause.

11 Financial Accounting Standards Statement Number 5 (FAS 5).



Johnson (D-GA).12 On November 5, 2013, a second proposal, S. 1645, was introduced by Senators Sherrod Brown (D-OH), John Thume (R-SD), and six additional co-sponsors.13 The companion proposals are similarly titled the “Mobile Workforce State Income Tax Simplification Act of 2013” and read identically. (They are referred to collectively hereinafter as the “Act.”)

Before delving into the provisions of the Act, it should be noted that this is not the first time that this legislation has been introduced in Congress.14 During the 112th Congress, an identical Mobile Workforce State Income Tax (“SIT”) Simplification proposal, H.R. 1864, was introduced.15 That proposal, which included the same provisions as the current companion proposals, was advanced by the former House of Representatives, which approved it on May 15, 2012 via voice vote. While it appeared that the prior session’s Mobile Workforce SIT Simplification legislation could finally be enacted, the proposal failed to progress any further, thus necessitating the reintroduction of the current proposals.

The Provisions of the Mobile Workforce SIT Simplification Act of 2013 The Act would generally limit the authority of States to tax certain income of employees16 who perform employment duties in states other than their state of residence or from which they are based. Specifically, section 2(a) of the legislation states:

12 H.R. 1129, 113th Cong. (2013). The House Bill was re-ferred to the Subcommittee on Regulatory Reform, Commercial And Antitrust Law on April 15, 2013. Since the bill’s introduc-tion on March 13, 2013, twenty-eight additional Representatives have signed on as co-sponsors.

13 S. 1645, 113th Cong. (2013). The Senate Bill was read twice and referred to the Committee on Finance on November 5, 2013. Since the bill’s introduction on the same date, four ad-ditional Senators have signed on as co-sponsors.

14 Prior Mobile Workforce SIT Simplification legislation has been introduced in at least the three prior Congressional ses-sions. These proposals include, H.R. 1864, introduced May 12, 2011, 112th Congress; H.R. 2110, introduced on April 27, 2009, 111th Congress; and H.R. 3359, introduced August 3, 2007, 110th Congress.

15 H.R. 1864, 112th Congress.16 S. 1645, § 2(d)(2). The term “employee” has the same

meaning given to it by the State in which the employment duties are performed, except that the term “employee” shall not include a professional athlete, professional entertainer, or certain public figures.

No part of the wages or other remuneration earned by an employee who performs employment duties in more than one State shall be subject to income tax in any State other than (1) the State of the employee’s residence; and (2) the State within which the employee is present and performing duties for more than 30 days during the calendar year in which the wages or remuneration is earned.

Additionally, the legislation applies a coordinated threshold with regards to limiting a State’s authority to impose nonresident payroll withholding and information reporting requirements on employers. On this point, section 2(b) of the Act states that “[w]ages or other remuneration earned in any calendar year shall not be subject to State Income tax withholding and reporting requirements unless the employee is [also] subject to income tax” in states other than the employee’s state of residence or states where the 30-day threshold is exceeded.

The Act also contains certain operating rules, which include permitting an employer to avoid failure to withhold penalties by relying on an employee’s annual determination of the time expected to be spent in a nonresident state.17 The Act’s operating rules also provide that the employer may still rely on an employee’s determination even if the employer maintains, in the regular course of business, records of an employee’s location.18 However, if an employer maintains a “time and attendance” system that tracks where the employee performs duties on a daily basis, the employer must use the data from the time and attendance system19 instead

17 Id. § 2(c)(1)(A),(B). Although the Act provides that an employer may rely on an employee’s annual determination of time expected to be spent in a nonresident state for purposes of determining penalties related to an employer’s State income tax withholding and reporting requirements, this provision does not apply if the employer has actual knowledge that the employee is committing fraud or the employer and employee collude to evade tax.

18 Id. § 2(c)(2).19 Id. § 2(d)(8)(A), (B). The Act defines a “time and atten-

dance” system as one where the employee is required to con-temporaneously record his work location for every day worked outside of the State in which the employee’s duties are primarily performed; and, which is designed to allow the employer to al-locate the employee’s wages for income tax purposes among all States in which the employee performs his employment duties.



of the employee’s determination.20 Additionally, where an employee performs duties in more than one state on the same day, the employee is considered to have been “present and performing duties” in the state in which he performs most of his duties during that day.21 However, if an employee performs duties in both his resident state and only one nonresident State on the same day, the employee is considered to have been “present and performing duties” in the nonresident state.22

If the Act becomes law, it would be effective on January 1st of the second year that begins after the date of the Act’s enactment.23 Any tax obligation that accrues before the Act’s effective date would not be alleviated or impacted by the Act.24

Will Mobile Workforce SIT Simplification Legislation be Enacted?

As noted previously, Mobile Workforce SIT Simplification legislation has been introduced during each of the last three Congressional sessions. In 2012, legislation introduced by the 112th Congress was advanced by the former House of Representatives via voice vote, but failed to progress further.

What is the likelihood that the Act will be enacted by the end of 2014? And what efforts are underway to see the legislation pass?

One of the Act’s most ardent supporters is the Council on State Taxation (“COST”).25 On November 4, 2013, COST submitted a letter to the two leading sponsors of S. 1645, Senator Sherrod Brown and Senator John Thune. In its letter, COST emphasized that “The Mobile Workforce Issues is COST’s number one federal legislative priority.” Recognizing that state tax administrators are concerned with the impact on state tax revenue if a uniform 30-day

20 Id. § 2(c)(3).21 Id. § 2(d)(1)(A).22 Id. § 2(d)(1)(B). See also id. § 2(d)(1)(C) (clarifying that

time spent in transit is not considered in determining the location of an employee’s performance of employment duties).

23 Id. § 3(a). As an example, if the Act were enacted by June 30, 2014, it would have an effective date of January 1, 2016.

24 Id. § 3(b).25 COST is a non-profit trade association consisting of more

than 600 multi-state corporations engaged in interstate and in-ternational business and is the premier state tax organization representing taxpayers.

threshold is imposed, COST, along with public accounting firm Ernst & Young, worked with the Federation of Tax Administrators and Multistate Tax Commission, to survey state tax agencies for personal income tax information used in the estimating process. Other efforts include working with officials at some of more resistant states, such as New York, as well as continuing to grow the number of “Letter of Support” backers to well over 250 organizations. Additionally, in an effort to educate businesses, taxpayers, the media and other interested parties, COST has produced a highly informative FAQ document which further explains the Mobile Workforce SIT Simplification legislation, and the rationale as to why the legislation make sense.26

Like COST, the American Institute of Certified Public Accountants (“AICPA”) is championing the passage of the current Mobile Workforce legislation, as it has with prior proposals. In an AICPA position paper, the organization noted that having a uniform national standard would eliminate the burden of having to research multiple state laws when employees work on an interstate basis only for short periods of time. The position paper added that in today’s uncertain economic times, businesses should not be expending their resources on the administrative burden that multiple, inconsistent state tax laws impose. Rather, they should focus on operating their business, job creation and retaining employees.

However, despite this effort, Congress has been presented with several federal proposals which also focus, to some degree, on limiting or expanding state authority, such as the Marketplace Fairness Act of 2013 (S. 743/H.R. 684), the Business Activity Tax Simplification Act (H.R. 2992), the Digital Goods & Services Tax Fairness Act (S. 1364) and the Permanent Internet Tax Freedom Act of 2013 (H.R. 434 / S. 31). Thus, it will be interesting to see where Congress turns its efforts.

Conclusion More and more employers are deploying a mobile workforce as they expand their multistate footprint. At the same time, states are stepping up their efforts to

26 The FAQ can found at http://www.cost.org/uploadedFiles/Featured_News/HR%201129%20S%201645%20Mobile%20Workforce%20FAQ%2011-2013.pdf. Some of the questions and answers addressed in the FAQ include why the proposals use a 30-day threshold, why the proposals do not include a dollar-based threshold, what impact the proposal will have on state revenues and current state reciprocity agreements, and why the proposals address both tax liability and withholding.



aggressively enforce their nonresident payroll withholding laws in an effort to capture more revenue from out-of-state taxpayers who perform services in their state. Thus, employers who wish to be compliant find that they must comprehend and apply a patchwork of state rules – some of which require nonresident withholding from the first day or dollar earned in the state, and others which allow a reprieve from withholding until a certain number of days or a dollar threshold is exceeded. And while both in-house and external SALT advisors recognize that performing services in multiple states may create nexus for a variety of entity-level business taxes, many tax professionals are less likely to focus on a company’s responsibility to withhold on the wages of employees who perform employment duties in nonresident states, thereby creating potential exposure for employers. This is one of the important issues that federal legislation would address, by imposing a uniform “days exceeded” threshold before a State could subject a nonresident employee to the state’s personal income tax and his employer to the State’s nonresident withholding and reporting requirements. Despite the bi-partisan support of both the House and Senate bills, support from a growing number of organizations and the significant efforts by COST, the AICPA and other leading professional organizations, it remains to be seen whether this support will finally be enough to achieve passage of this legislation.

Property Tax Calendar ~April 2014

This information is provided by International Appraisal Company (IAC) and is provided for quick reference/reminder purposes only. IPT and IAC make no guar-antee to completeness or accuracy and are not re-sponsible for errors or omissions or for any results from the use of this information. We strongly suggest confirmation of all information with local taxing juris-dictions.

Appeals DueAZ* DE* HI* IA* KY* NC* ND* OK* SD* VA*

GA 4/1 (or 30 days after notice)

KS 4/1

MN 4/30 Tax Court (Prior Year)

NJ 4/1

NY Corning, Nassau County

ND Townships - 1st Monday; Cities - 2nd Monday

DC By 4/1

VA Alexandria

Personal Property Filing Dates

4/1AZCAFLGALAMEMS

4/15COMDTX

4/20**AK*VT

4/30SC*VA*WA

Assessment Dates:ME 4/1 VT 4/1

* Dates vary, check jurisdiction ** Date falls on weekend, should be next business day,

Check Jurisdiction. Confirm all information with local taxing jurisdictions.


Income Tax Topics March 31- April 1, 2014

h When to Settle – Audit Strategies to Avoid Litigation

h How to Make Claims for and Actually Receive Income Tax Refunds

h Intercompany Planning that Survived Judicial Scrutiny: A Review of Recent Cases Involving Affiliate Transactions

h Rewriting UDITPA

h Update on Economic Nexus

h Economic Substance and Sham Transaction Litigation – Current Renditions

h Update on Other Business Taxes (Ohio, Texas and Washington)

h Who Gets Included in Your Combined Group? The Intersection of Unitary Issues, International Issues and Combined Reporting Statutes

h Conformity Issues in SALT

h Gillette and the MTC: Updates, Inside Stories and Other Perspectives

h Windfalls and Pitfalls of Incentives Negotiations

h Ethical Dilemmas in the Tax World

ABA/IPT Advanced Tax SeminarsMarch 31 - April 4, 2014 ~ The Ritz-Carlton ~ New Orleans, LA

Brochure Registration

Sales/Use Tax TopicsApril 1-2, 2014


h The Annual Big Easy Brawl: The Panelists Go Head-to-Head “Discussing” Current State and Local Tax Issues

h Sales & Use Tax Planning for the Complexities of Software and Cloud Transactions

h Successful Audit Strategies

h When the Tax Collector and the Taxpayer Just Can’t Agree: Taking the Audit to the Next Level Administratively

h Ask the Experts!

h Successful Litigation Strategies

h National Multi-State Sales and Use Tax Update

h Drop Shipments

h Second Line Out (Audience Participation)

Bringing together business tax professionals

Property Tax TopicsApril 3-4, 2014

h Give Me a Break on My Property Taxes! Foreign Trade Zones and Other Strategies to Reduce a Business’s Property Tax Burden

h Valuation Issues for Big Box Stores and Malls

h Tax Tribunal Roundtable

h Payments in Lieu of Taxes by Nonprofit Organizations: Fiscal and Political Issues

h Determining the Existence of and Segregating Intangibles for Valuation Purposes

h Multi-State Property Tax Update and Roundtable Discussion

h Special Valuation Issues for Tax Credit Properties

h The Elusive Cap Rate – Marketplace Solutions: Let Market Behavior Be Your Guide


Hotel guest room reservations can be made through central reservations by calling 1-800-826-8987 and referring to the group name ABA/IPT.


2014 IPT Sales Tax School II:Theory and Practice for the Experienced Sales & Use Tax ProfessionalApril 27 – May 2, 2014Marriott Kingsgate Conference CenterUniversity of Cincinnati, Cincinnati, OhioProgram Registrat ion Hotel Reservation

T his intermediate level, five-day school guides students through a review and analysis of many different but essential sales and use

tax principles and concepts: research, accounting, auditing and other technical skills. Emphasis is placed on small discussion groups and practical applications. The program and registration materials for this year’s school will soon be posted to IPT’s web site. Early registration is encouraged for this popular school. Registration is available online.

The school is composed of 16 general sessions, shown below in the order in which they are presented, followed by breakout sessions which expand on the material.

h Ethics h Constitutional Issues h Advanced Topics in Retailing h Advanced Topics in Leasing h Advanced Audit Management h Taxpayer Remedies h Statistical and Block Sampling h Mergers & Acquisitions h Tax Planning h Taxation of Computer Software & Services h Advanced Topics in Telecommunications h Advanced Topics in Manufacturing h Advanced Topics in Construction Contracting h Advanced Topics in Oil and Gas h Taxation of Electronic Commerce h Managing the Sales Tax Function

IPT 38th Annual Con ference

TEAM SUCCESS

The Institute for Professionals in Taxation brings together tax professionals from around the country to learn about new practices, to exchange ideas, and to stay on top of the latest tax developments. IPT’s 38th Annual Conference, June 29 – July 2, 2014, at the JW Marriott Desert Ridge Hotel in Phoenix, Arizona, provides you an opportunity to learn from colleagues and other distinguished leaders about critical state and local tax issues. As always, it is IPT’s goal to present sessions which are timely, highly informative and span a broad spectrum of topics to meet the diversity of its members. Ample networking time will allow attendees to meet potential collaborators and mentors as well as enjoy the company of long-time friends and colleagues. As a premier educational institution, IPT’s Conference-Program Team is committed to providing the highest standard of learning for its members. Conference-team play schedule (session agenda) and roster (speakers) will be available in late March.

This year’s Annual Conference theme is “TEAM SUCCESS” . . . Together Everyone Achieves More! Don’t let the clock run out; put yourself in scoring position by attending this year’s Conference. One of the Keynote speakers, Walt Coleman, is a National Football League Referee who has been applauded by hundreds and booed by millions. He has a vast collection of humorous and meaningful experiences and observations to share about the game and about life. He holds a BS Degree in Business Administration with Honors from the University of Arkansas Fayetteville. For Walt, when it comes to life, it’s not just about winning or losing, it’s about playing by the rules and being confident in how you ‘call the game’.


Online pre-requisite coursework

Face-to-face 2 1/2 day

school

Online electives

Credits and Incentives SchoolMay 14 - 16, 2014

Marriott Kingsgate Conference CenterUniversity of Cincinnati Cincinnati, Ohio

IPT’s f irst Credits and Incentives School will take place in 2014. The live portion will be held at the Marriott Kingsgate Conference Center in Cincinnati, Ohio from May 14-16, 2014. The school provides an in-depth analysis of the fundamentals of the credits and incentives field. It is designed for individuals who have a basic knowledge of the area.

There is one registration fee which covers 11 hours of pre-requisite web-based coursework, approximately 21 hours of a face-to-face school, and 6 hours of e-learning electives. The pre-requisites must be completed prior to the school. In the live portion of the school, emphasis is placed upon student participation via a case study and group discussion. Suc-cessful completion of all three segments and the school examination, which is administered throughout the coursework, is required. The faculty represents a broad-based set of backgrounds and many decades of experience in the field.

Brochure Hotel Reservation Registration


CMiCorner

Important CMI AnnouncementsIPT Program Requirement All CMIs must attend at least 12 hours at one IPT program in their respective discipline during each five-year term. Please note that attendance at the Credit & Incentives Symposium and Value Added Tax Symposium will not fulfill this requirement. However, you will still receive general CE credit for your attendance at either of the two aforementioned symposia. Please contact the IPT office if you have questions regarding this announcement.

Reminder: New Online Continuing Education Tracking System for CMIsYou will no longer submit non-IPT Continuing Education to the IPT office through email, fax or mail. Rather, you will sign in to the IPT website, fill out the form and upload supporting documentation. This new process will allow for a timelier posting of CE to your report. Attendance at IPT programs will be automatically posted to this report.

To access your CMI Status Report: 1. Sign In at www.ipt.org. 2. Click on your name in the top right corner. 3. Click on the “CMI Members” tab.4. In the top right corner of this section, there is an

option to request your Status Report. Click that link and fill out the form.

5. An email will be sent to the email address on file with IPT.

To submit non-IPT Continuing Education:6. Sign In at www.ipt.org. 7. Hover your mouse over “Professional Designations”

on the main blue menu bar, and click on “Application for Non-IPT Continuing Education Credit.”

8. Fill out the form, attach the supporting documentation, digitally sign the form and click submit.

9. You will receive a message that the form was submitted.

Continuing Education RequirementsEach CMI must complete at least 60 hours of relevant continuing business education during each five-year term as an active CMI. Of those 60 hours, at least 30 hours must be relevant to your tax specialty (i.e., sales, property, or income tax) with 5 hours devoted specifically to ethics. Three of the ethics hours must be from IPT courses/programs. Included within the 30 specialty hours, each CMI must attend at least 12 hours at one IPT Annual Conference, IPT Academy, IPT Symposium, IPT School or IPT/ABA Seminar in their respective discipline (sales, property or income tax) within each five-year term. Board Policy states that all CE earned during a previous year must be submitted no later than 60 days following receipt of yearly status reports which will be available to CMIs in January. The last day to submit any CE credit earned during the 2013 Calendar year will be March 31, 2014. Please note that we will not process or accept any credit earned prior to the preceding year. If you have any questions on the CMI designation or your current standing, please contact Emily Archer, Certification Officer at [email protected].

CODE OF ETHICS: CANON 2

IT IS UNETHICAL to engage in any activity that results in a conviction of any crime com-mitted in connection with the member's involvement in a tax matter.



CMi CandidateConneCtion

Planning to take the CMI exam in 2014?Applications are now being accepted for the 2014 CMI Exams. Potential candidates are encouraged to plan ahead to avoid missing the application deadline and thus the opportunity to sit for the exam. Applications are available on our website.

2014 Annual Conference Exams – Phoenix, AZThe exams held in conjunction with the Annual Conference in Phoenix, Arizona are scheduled for June 27 - 29, 2014.

Applications must be submitted 90 days prior to the examination date.

The deadline for submitting applications for the June 2014 Exam is March 28, 2014.

Candidates are required to complete and submit verification of any needed final requirements no later than May 13, 2014.

Candidates must notify the IPT office of their intention to sit for the examination no later than May 28, 2014.

2014 Sales Tax Symposium Exam – Washington, DCThe exams held in conjunction with the Sales Tax Symposium in Washington, DC are scheduled for September 19 - 20, 2014.


The deadline for submitting applications for the September 2014 Exam is June 19, 2014.

Candidates are required to complete and submit verification of any needed final requirements no later than August 4, 2014.

Candidates must notify the IPT office of their intention to sit for the examination no later than August 19, 2014.

2014 Income Tax Symposium Exam – Fort Lauderdale, FLThe exams held in conjunction with the Income Tax Symposium in Fort Lauderdale, Florida are scheduled for November 8 - 9, 2014.


The deadline for submitting applications for the November 2014 Exam is August 8, 2014.

Candidates are required to complete and submit verification of any needed final requirements no later than September 23, 2014.

Candidates must notify the IPT office of their intention to sit for the examination no later than October 8, 2014.

2014 Property Tax Symposium Exam – Fort Lauderdale, FLThe exams held in conjunction with the Property Tax Symposium in Fort Lauderdale, Florida are scheduled for November 8 – 9, 2014.Applications must be submitted 90 days prior to the examination date. The deadline for submitting applications for the

November 2014 Exam is August 8, 2014.Candidates are required to complete and submit

verification of any needed final requirements no later than September 23, 2014.

Candidates must notify the IPT office of their intention to sit for the examination no later than October 8, 2014.

Please review the CMI Income Tax Applicant, CMI Property Tax Applicant, or CMI Sales Tax Applicant pages for a complete overview of the application process and eligibility requirements.

More information on all of these announcements can be found on IPT’s website at www.ipt.org.


C a r e e r s Please visit the Career Opportunities page on the IPT web-site for complete position descriptions and requirements.

Positions Available:State and Local Tax Credits and Incentives Manager/Senior Manager (Southwest Region) – To Apply: For consideration, please visit "www.ey.com/us/jobsearch" and click "U.S. Job Search." Under our Job Posting List, click "Create or Update My Candidate Profile" to apply online. You can also send your resume directly to [email protected]. Ernst & Young LLP, an equal opportunity employ-er, values the diversity of our work force and the knowl-edge of our people. Date Posted: 2/19/2014 (IPT1355)

Sales & Use Tax Specialist Job ID 4998 (Houston, Tex-as) – EOG Resources, Inc. Please apply online at www.eogresources.com. Date Posted: 2/14/2014 (IPT1354)

Sales & Use Tax Analyst (Dallas, Texas) – Apply at www.crosstexenergy.com/careers.html. Date Posted: 2/14/2014 (IPT1353)

Financial Accounting & Reporting Senior Accountant (Plano, Texas) – Tax Specialty: Value Added Taxation. PepsiCo. Application URL: http://www.aplitrak.com/?adid=S2VpdGguU3Rld2FydC41MjExMS41NTU0QHBlcHNpY28uYXBsaXRyYWsuY29t. Date Posted: 2/14/2014 (IPT1352)

Senior Tax Analyst (Seattle, Washington) – Tax Spe-cialty: Sales, Income. Tableau Software. Tableau. To apply http://ch.tbe.taleo.net/CH11/ats/careers/requisition.jsp?org=TABLEAU&cws=1&rid=2173. Date Posted: 2/10/2014 (IPT1351)

Tax Manager (Alpharetta, Georgia) – GSA. Send resume to [email protected]. Date Posted: 2/10/2014 (IPT1350)

Tax Compliance Specialist (Alpharetta, Georgia) – GSA. Send resume to [email protected]. Date Posted: 2/10/2014 (IPT1349)

Manager, Tax (Cincinnati Ohio) – Specialty: Real Estate. Macys Corporate Services. Link: http://www.macysjobs.com/Search/JobDetail/COR00960. Date Posted: 2/7/2014 (IPT1348)

Tax Accountant II Sales Tax (Plano, Texas) – Denbury Resources Inc. To apply, http://www.linkedin.com/compa-ny/54838/careers?trk=job_view_topcard_company_name. Date Posted: 2/7/2014 (IPT1347)

Tax Associate Analyst (Plano, Texas) – Tax Specialty: Credit and Incentives. PepsiCo. Application URL: http://www.aplitrak.com/?adid=RWxpYW5lLkZpc2hraW5kLjY1NDgzLjU1NTRAcGVwc2ljby5hcGxpdHJhay5jb20. Date Posted: 2/7/2014 (IPT1346)

Manager, Property Tax/Incentives (Beachwood, Ohio) – Eaton. Please apply at https://sjobs.brassring.com/TG-WEbHost/jobdetails.aspx?partnerid=256&siteid=39&AReq=67776BR&Codes=US_EEST. Date Posted: 2/4/2014 (IPT1345)

Sales Tax Analyst II (Richmond, Virginia) – CarMax. To apply, http://www.carmax.com/careers. Date Posted: 2/4/2014 (IPT1344)

Senior Manager Sales and Use Tax (Raleigh, North Carolina) – To apply, http://www.martinmarietta.com/Em-ployment/job.asp?ID=1168. Date Posted: 2/4/2014 (IPT1343)

Senior Manager Indirect Tax (Washington, DC) – The LivingSocial. To apply, https://corporate.livingsocial.com/browsealljobs/?deep_link=/jobs/ovvmYfw4. Date Posted: 2/4/2014 (IPT1342)

Tax Analyst Indirect Tax (Washington, DC) – Liv-ingSocial. To apply, https://corporate.livingsocial.com/browsealljobs/?deep_link=/jobs/ow7nYfwI. Date Posted: 2/4/2014 (IPT1341)

Senior Transaction Tax Accountant (Bloomfield Hills, Michigan) – TIP Capital. For employment consideration, please complete the Application for Employment form found on our Company website at http://www.tipcapital.com/about-us/careers/. Forward it along with your resume and cover letter to: [email protected]. Date Posted: 1/31/2014 (IPT1340)






Sr. Tax Manager Property Tax (Minneapolis, Minne-sota) – DuCharme, McMillen & Associates, Inc. Apply at http://dma.luceosolutions.com/recruit/advert_details.php?id=44&idpartenaire=142. Date Posted: 1/31/2014 (IPT1339)

Sr. Tax Manager Sales/Use Tax (Boston, Massachu-setts) – DuCharme, McMillen & Associates, Inc. Apply at: http://dma.luceosolutions.com/recruit/advert_details.php?id=45&idpartenaire=142. Date Posted: 1/31/2014 (IPT1338)

Indirect Tax Analyst I (Cypress, Texas) – Sysco Busi-ness Services. Please see our website to review all re-quirements and apply for this position: http://sysco.jobs/houston-sbs-tx/indirect-tax-analyst-i/41516632/job/. Date Posted: 1/31/2014 (IPT1337)

Position Wanted:Sales and Use Tax – Seeking a Sales and Use tax position within 25 miles of Tysons Corner, Virginia. Nine years of sales and use tax experience in public account-ing firm as well as corporate world. Concentration on compliance, audit and automation work. For more de-tails please contact Nutan at (703) 244 6638 or email at [email protected]. Date Posted: 2/19/2014 (IPT1356)

State Business Income Taxation

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ABA-IPT Advanced Income Tax Seminar The Ritz Carlton New Orleans, LA March 31 - April 1, 2014

ABA-IPT Advanced Sales/Use Tax Seminar The Ritz Carlton New Orleans, LA April 1 - 2, 2014

ABA-IPT Advanced Property Tax Seminar The Ritz Carlton New Orleans, LA April 3 - 4, 2014

Sales Tax School II Marriott Kingsgate Conference Center Cincinnati, OH April 27 - May 2, 2014

Michigan One-Day Tax Seminar Domino’s Pizza World Resource Center Ann Arbor, MI May 2, 2014

Credits and Incentives School Marriott Kingsgate Conference Center Cincinnati, OH May 14 - 16, 2014

Basic State Income Tax School Georgia Tech Hotel & Conference Center Atlanta, GA June 1 - 6, 2014

Advanced State Income Tax School Georgia Tech Hotel & Conference Center Atlanta, GA June 1 - 6, 2014

CMI Sales Tax Exams JW Marriott Desert Ridge Phoenix, AZ June 27 - 28, 2014

CMI Income Tax Exams JW Marriott Desert Ridge Phoenix, AZ June 28 - 29, 2014

CMI Property Tax Exams JW Marriott Desert Ridge Phoenix, AZ June 28 - 29, 2014

CCIP Exams JW Marriott Desert Ridge Phoenix, AZ June 28 - 29, 2014

Annual Conference JW Marriott Desert Ridge Phoenix, AZ June 29 - July 2, 2014

Real Property Tax School AT&T Executive Education Center Austin, TX July 13 - 18, 2014

Property Tax School Georgia Tech Hotel & Conference Center Atlanta, GA August 10 - 14, 2014

Value Added Tax Symposium Crystal Gateway Marriott Hotel Arlington, VA September 17 - 19, 2014

CMI Sales Tax Exam Renaissance Washington DC Downtown Hotel Washington, DC September 19 - 20, 2014

CCIP Exams Crystal Gateway Marriott Arlington, VA September 20 - 21, 2014

Credits and Incentives Symposium Crystal Gateway Marriott Hotel Arlington, VA September 21 - 24, 2014

Sales and Use Tax Symposium Renaissance Washington DC Downtown Hotel Washington, DC September 21 - 24, 2014

Personal Property Tax School Georgia Tech Hotel & Conference Center Atlanta, GA October 12 - 16, 2014

CMI Income Tax Exams Marriott Harbor Beach Resort Fort Lauderdale, FL November 8 - 9, 2014

CMI Property Tax Exams Marriott Harbor Beach Resort Fort Lauderdale, FL November 8 - 9, 2014

Income Tax Symposium Marriott Harbor Beach Resort Fort Lauderdale, FL November 9 - 12, 2014

Property Tax Symposium Marriott Harbor Beach Resort Fort Lauderdale, FL November 9 - 12, 2014

IPT 2014 CALENDAR OF EVENTS

Please check IPT’s online Calendar of Events for additional programs that may be added.

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