revenue agencies & businesses working together · –centralized sales tax administration...
TRANSCRIPT
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Southeastern Association of Tax Administrators (SEATA)
Tuesday, July 17, 2018
Nashville, Tennessee
Presenters
Charles Collins, ADP
Fred Nicely, Council On State Taxation (COST)
Frank O’Connell, Georgia Dep’t of Revenue
Revenue Agencies & Businesses Working Together
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• Implement & administer tax levies
consistent with law & regulations
• Provide clear and timely information to
taxpayers & tax professionals
• Ensure high rate of compliance
Tax Agency Objectives.
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• Highest rate of compliance possible
• Lowest cost of compliance possible
• Few/no audit issues
Taxpayer/Tax Provider Objectives
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• Implement & administer tax levies
consistent with law
– Input on enacted legislation, regulations,
forms, etc.
– Input on electronic applications
• Provide clear and timely information to
taxpayers & tax professionals
– Feedback on proposed regulations
– Cooperation on getting communication out
Agencies/Business Working Together
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• Ensure high rate of compliance
– Responding to feedback on problem areas
– Clarity in instructions; “plain language”
– Simple registration process
– Simple filing & payment processes
• electronic processes
– Uniform/simple authorization process
– Publishing administration decisions if possible
Agencies/Business Working Together.
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• Future Areas
– Expansion of Agency Portals
• More agencies
• More self-service functionality
• Simple use by taxpayer’s 3rd party provider
– More electronic applications
• Use of electronic signatures (POA)
Agencies/Business Working Together .
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• Whistleblower/Qui Tax Actions
– Illinois Experience
• Class Action Lawsuits
• Contingent Fee Auditing
Concern with Tax Administration
Outside of Tax Agency
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• Providing Documentation
• Limiting Use of Waivers
• Settlements
– When
– Who
• Total Frustration – Who Do You Contact?
– With Tax Agency
– With Taxpayer
Difficult Audits – Best Practices
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• Alternative Apportionment
– Burden of Proof
– Guidance
• Nexus Standard
• Forced Combination
• Cost of Performance vs. Market Sourcing
• Reporting Federal Tax Adjustments
Issues with Corporate Income Taxes
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• SSUTA – Uniformity & Simplicity
– What impact will Wayfair have?
– Access to Software – TPP or Service
• Nexus Standard
• Base Broadening
– Business-to-Business Transactions
– Review/Eliminating Exemptions
– Taxing Services/Digital Goods
Issues with Sales/Use Taxes
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• Is it just corporate welfare?– Are some credit/incentives better than others?
• How should compliance with a program be
verified?– Weighing documentation costs v. program incentive
benefits
• What should be the consequences for failure to
comply with an credit/incentive?
– Do claw-back provisions work and/or are they equitable?
Issues with Tax Credit & Incentive
Programs
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• Should revenue agencies give preference to
certain associations?
– Local v. National
– CPA, Chambers, TP Assoc., Special Interests, Etc.
• Are associations too aggressive or lacking a
complete understanding?
• Formal versus informal comments and/or
meetings – what’s the best approach?
Working with Associations
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• Purpose – Discuss policy, administration,
dispute resolution, “best practices”
• Make-up: Practitioners, business – large &
small, local govt, academics
• Governance – terms, responsibilities,
expectations of confidentiality?
• Other outreach? Surveys, focus groups?
Commissioners’
Advisory Councils
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• Should states automatically couple with
federal tax changes?
• How important is uniformity with the IRC?
• Should states have more input before
Congress changes the IRC?
• How are the states dealing w/recent changes:
– Federal tax reform?
– New federal partnership audit regime?
Dealing with Federal Tax Changes
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• Four Administrative Scorecards
– State Administrative Practices Scorecard
– Unclaimed Property Practices Scorecard
– International Property Tax Scorecard
– Sales Tax Systems Scorecard
• Goal is to work with both the legislative and
executive branches of state government to
improve state and local tax administration
– Not an evaluation of revenue agencies
COST Administrative
Scorecards
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• Areas Evaluated:
– Independent Tax Dispute Forum
– Pay-to-Play Tax Litigation System
– Even Statute of Limitations/Interest Rates
– Adequate Appeal/Protest Period
– Return Due Date/Automatic Extension
– Filing IRS (RAR) Changes
– Transparency
COST State Administrative
Practices Scorecard
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State Tax Administration
Overall Grades
HI
ME
RI
VT
NH MA
NY
CT
PA NJ
DC
DE
WV
NC
SC
GA
FL
ILOH
MIWI
KY
TN
ALMS
AR
LA
TX
OK
MOKS
IA
MN
ND
SD
NE
NMAZ
CO
UT
WY
MT
WA
OR
ID
NV
CA
VA
MD
WA
AK
IN
A
B
C
D
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• Three Areas Evaluated
– Transparency
– Simplicity and Consistency
– Procedural Fairness
• U.S., as a whole, did not do as well as
other countries: Canada, United Kingdom,
Australia, Hong Kong, & South Africa
COST/IPTI International Property
Tax Administration Scorecard
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Property Tax Overall Grade
HI
ME
RI
VT
NH MA
NY
CT
PA NJ
DC
DE
WV
NC
SC
GA
FL
ILOH
MIWI
KY
TN
ALMS
AR
LA
TX
OK
MOKS
IA
MN
ND
SD
NE
NMAZ
CO
UT
WY
MT
WA
OR
ID
NV
CA
VA
MD
WA
AK
IN
A
B
C
D
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• Six Areas Evaluated
– Exemption for Business-to-Business Transactions
– Fair Sales Tax Administration
– Centralized Sales Tax Administration
– Simplification & Transparency
– Reasonable Tax Payment Administration
– Fair Audit/Refund Procedures
– Other Issues Impacting Fair Tax Administration
• What the Scorecard Does Not Grade
– Tax Rate Differences
– Tax Base Breadth (other than Taxing Business Inputs)
Sales Tax Systems Scorecard
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Sales Tax Systems ScorecardOverall Grade
States’ Overall Scorecard Grades: SSUTA States
AK
HI
ME
RI
VT
NH
MANY
CT
PANJ
DC
DE
WV
NC
SC
GA
FL
ILOH
IN
MIWI
KY
TN
ALMS
AR
LATX
OK
MOKS
IA
MN
ND
SD
NE
NMAZ
CO
UT
WY
MT
WA
OR
ID
NV
CA
VA
MD
Average score of SSUTA
states: B (12 pts.)
Average score of non-SSUTA
states: D+ (19 pts.)
SSUTA Full Member
N/A 0-9 10-13 14-17 18-22 22+
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• Seven Areas Evaluated
– B-to-B Transactions Exempt?
– Periods of Limitations
– Independent Appeals Process?
– Contingent Fee Audits Banned?
– Gift Certificates Exempt?
– Penalties
– Treatment of Interest
Unclaimed Property Scorecard
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Unclaimed PropertyOverall Grade
HI
ME
RI
VT
NH MA
NY
CT
PA NJ
DC
DE
WV
NC
SC
GA
FL
ILOH
MIWI
KY
TN
ALMS
AR
LA
TX
OK
MOKS
IA
MN
ND
SD
NE
NMAZ
CO
UT
WY
MT
WA
OR
ID
NV
CA
VA
MD
WA
AK
IN
A
B
C
D
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Questions?
THANK YOU!
Your Logo
Charles Collins, ADP
Fred Nicely, Council On State Taxation
Frank O’Connell, Georgia Dep’t of Revenue