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Sales and Use Tax Developments: The Tension Between Statutory Plain Language and Economic Substance in Effecting Legislative IntentStates are extending federal common law economic substance and related doctrines to the sales and use tax realm. In some states, legislatures have explicitly codified economic substance principles. In other states, courts have approved using economic substance analysis to impose sales and use tax. This article reviews recent sales and use tax developments that highlight a tension in effecting legislative intent: does plain statutory language or economic substance control? The article ends by examining the conflicting legislative, judicial, and administrative positions on economic substance in Texas.

Doug Sigel, Esq.Ryan Law Firm, LLPAustin, TexasPhone: (512) 459-6611Email: [email protected] Goldberg, Esq.Ryan Law Firm, LLPAustin, TexasPhone: (512) 459-6607Email: [email protected]

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Credits and Incentives

In this Issue

Tax ReportInstitute for Professionals in Taxation®Excellence Through Tax EducationFebruary 2015

Sales Tax

Solar Power: Shedding Light on the Property Tax IncentivesThe use of solar energy by both residents and businesses in the U.S. has increased significantly in recent years. One likely reason is that a majority of states now offer some type of tax incentive, with one of the more recent trends being property tax incentives for solar energy systems. This article examines the various different approaches to property tax incentives that are being taken by the states and by some local taxing authorities. It also discusses how these incentives are making solar energy a more realistic and affordable option.Stephen MarshallFandl, LLCRidgewood, NJPhone: (201) 670-0056E-mail: [email protected]


An Overview of Unclaimed Property for the Tax ProfessionalAlthough unclaimed property reporting and remittance obligations apply to virtually every business, many tax professionals have little or no experience in the area and are unfamiliar with many of the concepts and areas of risk. This article provides a basic but broad overview of unclaimed property, including its history and important terms and concepts. The authors also discuss some of the common scenarios in which there is the potential for significant unclaimed property liability, such as in the context of mergers and acquisitions.Robert M. TucciTrue Partners Consulting LLCDallas, TXPhone: (972) 338-3673E-mail: [email protected] WeigandTrue Partners Consulting LLCDenver, COPhone: (303) 524-1452E-mail: [email protected]


Unclaimed Property

Sales Tax School I February 22 - 27, 2015 Georgia Tech Hotel & Conference Center, Atlanta, GAProgram Registration Hotel Reservation

ABA/IPT Advanced Tax Seminars March 16 - 20, 2015 The Ritz-Carlton ~ New Orleans, LABrochure Registration King bed hotel accommodations Double bed hotel accommodations

President's Corner . . . . . . . . . . . . . . . . . 2Counsel's Corner . . . . . . . . . . . . . . . . . . 4IPT Live Webinars . . . . . . . . . . . . . . . . 13ABA/IPT Tax Seminars . . . . . . . . . . . . . 14Sales Tax School I . . . . . . . . . . . . . . . . 15Sales Tax School II . . . . . . . . . . . . . . . . 15Credits & Incentives School . . . . . . . . . 16Property Taxation 4th Edition . . . . . . . . 16

State Business Income Taxation Book 16IPT 39th Annual Conference . . . . . . . . . 172015 Real Property Tax School . . . . . . 17CMI Corner . . . . . . . . . . . . . . . . . . . . . . 18CMI Candidate Connection . . . . . . . . . 19Property Tax Calendar . . . . . . . . . . . . . 19Career Opportunities . . . . . . . . . . . . . . 20Calendar of Events. . . . . . . . . . . . . . . . 21

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IPT February 2015 Tax Report 2

IPT OFFICERS President Arthur E. Bennett, CMI Property Tax Assistance Co., Inc.

First Vice President Margaret C. Wilson, CMI, Esq. Wilson Agosto LLP

Second Vice President Chris G. Muntifering, CMI General Mills, Inc.

BOARD OF GOVERNORS Immediate Past President Arlene M. Klika, CMI Schneider

Carolyn L. Carpenter, CMI, CPA JMC Express, Inc.

Leslie S. Fisher, CMI E. I. Du Pont de Nemours and Company

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

Rick H. Izumi, CMI ITA, LLC

Kenneth R. Marsh, CMI TransCanada Pipelines Limited

Faranak Naghavi, CPA Ernst & Young LLP

Carolyn M. Shantz, CMI, CPA Superior Energy Services

Andrew P. Wagner, CMI, 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

This publication is designed to provide accu-rate information for IPT members and other tax professionals. However, the Institute is not en-gaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. Re-print permission for articles must be granted by authors and the Institute. Send address changes and inquiries to Institute for Profes-sionals in Taxation®, 1200 Abernathy Road, NE, Building 600 Suite L-2, Atlanta, Georgia 30328 Telephone (404) 240-2300/Fax (404) 240-2315.

President’s

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Arthur E. Bennett, CMI President June 2014-2015

I am more than halfway through my tenure as President of IPT, and I have thoroughly enjoyed serving

in this role, working with you to ensure IPT delivers the best information, highest-quality education and deepest networking resources available to tax professionals.

As we tend to do when we are at the midpoint of something important, I think now is a good time to evaluate the goals we set for ourselves last year, see how far we’ve come and plan for the final stretch leading up to this summer’s Annual Conference.

During the Board of Governors Meeting last July, I set forth the following goals for my term as President:

1. Promote the Recognition of the CMI Designation

2. Move IPT’s Sponsored Research Efforts Forward

3. Update the Sales and Use Taxation Textbook

4. Increase Distance Learning Course Offerings

5. Implement Regional/Industry Workshops

Here’s a summary of what we’ve done to reach those goals since last year’s Annual Conference.

Promote CMI DesignationIn November of last year, we assembled a committee, led by Judith Ross, CMI, with the primary focus of contacting selected states and municipalities with licensing requirements to recognize the CMI designation in lieu of other licensing requirements.

A brochure was created to help communicate IPT’s message and, when used in conjunction with personal outreach, helps reinforce our position that the CMI designation is the gold standard. In 2015, the committee intends to increase its efforts to connect with key contacts on the state and municipal levels to promote acceptance of the CMI designation.

Create Sponsored Research In 2014, we decided to venture in a new direction and committed to a sponsored research program relating to critical state and local tax issues, initially focusing on locally administered sales and use taxes. The research will produce objective surveys, analyses, reports and data that can be used in state legislative and congressional debate, as well as assist Institute members in navigating these issues. By initiating this type of research, I believe we can further solidify IPT’s reputation as an industry thought-leader and further strengthen our position within the industry.

The Sponsored Research Committee, led by Bob Adair, CMI and Art Rosen, Esq., created and distributed an RFP in the fourth quarter of 2014. The committee was pleased to receive responses from 12 firms. The goal is to select one of them in February and establish a timeline so that the survey and its results are completed prior to year’s end. You can expect to hear much more about this in the coming months.

(Continued on page 3)


Update the Sales and Use Taxation BookI am proud to announce that we have secured an editor to update the Sales and Use Taxation book, which is scheduled to become available in early 2016. Bill Fox, PhD, has agreed to be the editor on this project, using his vast expertise to make this important document current and accurate. I am excited to have Dr. Fox on board for this work and personally thank him for agreeing to participate in this critical project.

Increase Distance Learning Course OfferingsIn 2014, we implemented a series of distance learning courses. Member feedback indicated that while on-site meetings were appropriate for some material, it would be easier and more convenient to have online access to live and recorded meetings that covered more topical and less comprehensive material.

Last year, we hosted more than 20 distance learning sessions, and we currently have 17 of those recorded sessions available online. Under the guidance of Distance Learning Committee Chair Robert Butterbaugh, CMI and with the work of the entire committee, 2015 will see a substantial increase in that number. In this first quarter of this year, we have five courses scheduled and will be adding more throughout the year. For more information on the topics and times, click on this link, Upcoming 2015 Programs.

Implement Regional and Industry WorkshopsRegional and industry workshops are intended to supplement IPT’s national programs, bringing our expertise to a wider audience. In November of 2014, we hosted the first such seminar which focused on pharmaceutical/life science-related SALT issues. The attendees were thoroughly impressed with the detail and relevance of the content. My thanks to Gary Bingel, CMI, CPA, Esq. and his team for all the hard work they put into the event.

Over the past six months, Committee Chairs Tarah Seehafer and Glenn McCoy, Jr., Esq. have planned two regional industry workshops. The first is July 2015, in the Pacific Northwest concentrating on sales tax issues related to manufacturing and related industries and the other is focused on government contracting in 2016. With these workshops, our overall goal is to widen our scope, push our boundaries and reach out to geographies and industries that would benefit from our knowledge and possibly help grow our organization. Details for both events, including dates and location, will be posted to www.ipt.org when they become available.

Other UpdatesAnother milestone we reached in 2014 is the update of the 4th edition of the Property Taxation book, and I am proud

to say that it is currently available. Thanks to everyone who worked tirelessly on updating, writing and editing the material. It was certainly yeoman’s work and the result is fantastic!

For your convenience, the book is now available on flash drive, which is user-friendly, easily searchable and highly portable. The flash drive costs $100 for IPT members, $125 for those employed by companies with IPT members and $175 for non-members. Pre-orders were sent out in mid-January and should arrive soon. You can order the material online at www.ipt.org.

As many of you know, Keith Landry, our staff General Counsel, left IPT at the end of 2014 to return to private practice. I thank Keith for his service and wish him the best of luck in his new pursuit. Since a number of his responsibilities involved IPT communications, we decided to hire a Communications Manager rather than a new staff attorney. I am pleased to announce that Jennifer Newman joined IPT in this role at the beginning of the year. She served almost 20 years with Sun Trust Banks, primarily in corporate communications, and will have responsibility for IPT’s communications strategy and execution. She can be reached via email at [email protected] and by phone at 404-240-2303. Please join me in welcoming Jennifer to IPT.

Also, don’t forget to mark your calendars for IPT’s Annual Conference on June 28 through July 1, 2015, at the Hilton San Diego Bayfront. We’ve been working to ensure that the Conference contains the most relevant and topical information, with a little fun thrown in, to make your visit to San Diego well worth your time. I believe we are creating a program that is engaging and diverse enough to meet your varying needs and interests and that you will be glad you attended.

The Conference theme this year is “Anchors Aweigh”, so I encourage you to come to San Diego this summer and drop anchor for a few days, get some valuable information and network with colleagues. I look forward to seeing you there!

All in all, I think we’ve made strong progress toward our stated goals. We have not accomplished them all and there is much work to do, but I can clearly see that we are on the right path. Throughout the next several months of my tenure, I pledge to continue working to deliver the clearest and most relevant information to IPT members, while further reinforcing the strength of the Institute’s reputation and striving to increase our membership. My thanks to all committee chairs and members for the work you do for this organization and to the entire membership for your continued support.

Art Bennett, CMI President




Sales and Use Tax Developments: The Tension Between Statutory Plain Language and Economic Substance in Effecting Legislative IntentDoug Sigel, Esq.Ryan Law Firm, LLPAustin, TexasPhone: (512) 459-6611Email: [email protected] Goldberg, Esq.Ryan Law Firm, LLPAustin, TexasPhone: (512) 459-6607Email: [email protected]

Decades ago, Judge Learned Hand observed that “any one may so arrange his affairs that his taxes shall be as low as possible; he is not bound to

choose that pattern which will best pay the Treasury; there is not even a patriotic duty to increase one’s taxes.”1 Even so, beginning with Gregory v. Helvering2 in 1935, a number of related federal common law doctrines have developed that allow courts to look beyond a transaction’s form and desired tax consequences.

• Economic substance doctrine asks whether a transaction has—apart from the tax benefits—a business purpose and/or3 economic

1 Helvering v. Gregory, 69 F.2d 809, 810 (2nd Cir. 1934).2 293 U.S. 465, 469-70 (1935).3 Some courts require both prongs—business purpose and economic substance—to be met for a transaction to have economic substance. See, e.g., Coltec Indus. v. United States, 454 F.3d 1340, 1355 (Fed. Cir. 2006); Klamath Strategic Inv. Fund v. United States, 586 F.3d 537, 544 (5th Cir. 2009); Dow Chem. Co. v. United States, 435 F.2d 594, 599 (6th Cir. 2006); see also I.R.C. § 7701(o). Some courts require that only one

Counsel’sCorner

SALES TAX

substance—meaning the taxpayer’s economic position changes in some meaningful way.

• A sham transaction is one without economic substance.

• Substance over form doctrine bases the tax consequences of a transaction on its economic substance, where the economic substance differs from the legal form of the transaction.

• Step transaction doctrine collapses or rearranges the steps of a transaction to disregard steps taken solely for their tax consequences.

• Alter ego doctrine disregards the corporate fiction to treat the corporation’s owners as the parties engaging in the transaction.

A basic policy behind the economic substance doctrines is that a taxpayer cannot avoid tax by structuring transactions in a manner that conforms to a literal reading of a tax statute but that does not conform to what Congress intended when the statute was enacted. Simply put, economic substance is used to enforce congressional intent.

State courts and taxing authorities are increasingly, but inconsistently, relying on federal economic substance concepts to impose tax on transactions that—at face value—meet the plain language of state tax statutes. This creates some tension. On one hand, if a tax provision is unambiguous, state courts typically look to the plain meaning of the statutory language to discern legislative intent. On the other hand, a common law economic substance analysis purports to override the statute to apply the true legislative intent. This article explores the economic substance trend, as applied to state sales and use taxes.

I. States That Codify Economic Substance

Legislative intent is most clear when codified in law. Some state legislatures have codified common law economic substance provisions; a handful of these laws are applicable to sales and use taxes. These provisions put taxpayers on notice that the state’s legislative body intends and permits tax authorities to consider the economics beyond the form of a sale transaction.

In Massachusetts, for example, the Department of Revenue is given discretion to “disallow the asserted tax consequences of a transaction by asserting the application of the sham transaction doctrine or any other related tax

prong be met. Black & Decker Corp. v. United States, 436 F.3d 431, 441 (4th Cir. 2006).





doctrine.”4 If sham is asserted, the burden automatically shifts to the taxpayer to prove by clear and convincing evidence that (1) the transaction has a business purpose, (2) the transaction has economic substance, and (3) the nontax business purpose is “commensurate” with any tax benefits.

The New Hampshire Legislature also allows the Department of Revenue to disallow a sham transaction, defined as “a transaction or series of transactions without economic substance because there is no business purpose or expectation of profit other than obtaining tax benefits.”5 The Department can consider economic reality, substance over form, and step transaction doctrines in its administration of sale and use taxes. The Department has the burden to prove by a preponderance of the evidence that a sham transaction occurred. If the transaction is between members of a controlled group, the burden shifts to the taxpayer. The Ohio Legislature enacted a substantively identical rule for the Department of Taxation.6

The Washington Legislature codified its “intent to stop transactions or arrangements that are designed to unfairly avoid taxes.”7 The Department of Revenue is required to disregard any tax avoidance transaction, specifically including an arrangement that disguises the taxpayer’s purchase or use of tangible personal property by vesting legal title or other ownership interest in another entity over which the taxpayer exercises control in such a manner as to effectively retail control of the tangible personal property. The Department is permitted to consider either prong of the economic substance doctrine—substantial nontax purpose and change of economic position—as well as whether the transaction is a “reasonable means” to accomplish the nontax purpose. The Department also has discretion to apply other noncodified, common law remedies.

II. Varying Judicial Acceptance of Economic Substance Doctrines.

In states without laws extending the economic substance doctrine to sales and use taxes, state courts vary in their willingness to apply economic substance principles to sales transactions. Courts adopting economic substance reasoning tell taxpayers that transactions falling within the plain language of a tax statute or exemption will

4 Mass. Gen. Laws Ann. 62C § 3A.5 N.H. Rev. Stat. Ann. § 21-J:38-a(I) & (V).6 Ohio Rev. Code Ann. § 5703. 56.7 Wash. Rev. Code Ann. § 82.32.655(1).

nevertheless receive additional scrutiny. These courts approve of taxing authorities’ use of common law economic substance principles.

Most recently, the Kentucky Court of Appeals, in an unpublished opinion, applied substance over form to collapse a parent and subsidiary structure.8 In Ohio Valley, the parent transferred its aluminum purchasing and selling business to a wholly-owned subsidiary and retained the scrap aluminum processing business. The court attributed the subsidiary’s raw material costs to the parent’s cost of production for purposes of the sales and use tax exemption for fuels used in manufacturing. The court relied on parallel reasoning to support its decision. The court first relied on a statutory interpretation of “costs of production,” asserting that the phrase was to be expansively interpreted so that even if the corporate structure was respected, the subsidiary’s raw materials costs were includible in the parent’s costs of production under the statute itself.9 The court then noted that the subsidiary had no employees, the companies comingled their assets in a single bank account, and the subsidiary was the parent’s only customer and source of income. The parent claimed the subsidiary’s business purpose was to protect the parent from volatility in the aluminum market. Nevertheless, the court stated that the legislative intent of the exemption is preserved by applying the substance over form doctrine to treat the parent and subsidiary as a single company.10 Notably, the court blended the familiar sales tax statutory interpretation principle disfavoring and strictly construing exemptions from tax with economic substance analysis.

Other state courts have come to opposing conclusions on economic substance and sales and use tax. In Wisconsin, the court of appeals applied an economic substance and business purpose analysis to collapse a corporate structure designed to obtain a sales tax exemption.11 In Illinois, the Supreme Court refused to find a sham transaction where taxpayer structured its sales contracts to come within the plain language of a regulation and thereby avoided incurring sales tax in a high-tax jurisdiction.12

8 Ohio Valley Aluminum Co. v. Dep’t of Revenue, No. 2013-CA-000507-MR, 2014 WL 4522236 (Ky. Ct. App. Sept. 12, 2014).9 Id. at *4.10 Id. at *5.11 Sullivan Bros., Inc. v. Dep’t of Revenue, 352 Wis.2d 755 (Wis. Ct. App. 2014) (unpublished opinion).12 Hartney Fuel Oil Co. v. Hamer, 998 N.E.2d 1227, 1246 n.6 (Ill. 2013).



Several states have addressed economic substance in the context of a purchase of a vehicle. The Louisiana Supreme Court refused to pierce the corporate veil to impose tax on the sole member of a Montana LLC formed solely for the purpose of avoiding Louisiana sales tax on the purchase of a recreational vehicle.13 The Court found that avoiding “taxes and other liabilities, far from being fraudulent, is a common and legal practice,” for an LLC that can be formed for “any lawful purpose.”14 The Court further encouraged the Department of Revenue to seek legislation enacting its policies, rather than judicial remedy. Similarly, the Michigan Court of Appeals refused to impose use tax on the purchase of a recreational vehicle by a single-member Montana LLC that fell within the plain language of a use tax exemption.15 The court concluded that it was irrelevant that the LLC was formed to legally avoid tax. The Indiana Department of Revenue reached the opposite conclusion, deciding that vehicles owned by a single-member Montana LLC that were stored in Indiana were subject to Indiana use tax.16 The Department applied sham transaction, economic substance, and “legitimate corporate business purpose” to disregard the LLC form and impose tax on the owner-taxpayer.

III. Texas Comptroller Proposes to Codify Economic Substance Principles Without Clear Authority.

In Texas, the Comptroller of Public Accounts has used economic substance principles to impose sales and use tax and to disallow exemption from tax since at least 2006.17 On October 31, 2014, the Comptroller published proposed new rules that would codify economic substance for purposes of the sale for resale exemption and for aircraft transactions.18 The authority for the Comptroller’s policies is unclear. Moreover, the restrictive requirements of the proposed rules do not reflect the realities of business and may lead to more, not fewer, structured transactions that avoid sales and use tax.

13 Thomas v. Bridges, 144 So.3d 1001 (La. 2014).14 Id. at 1008.15 Free Enterprises, LLC v. Dep’t of Treasury, No. 00-379030, 2012 WL 5852869 (Mich. Ct. App. Nov. 6, 2012) (unpublished opinion).16 Indiana Dept’ of Revenue, Letter of Findings No. 04-2013047 (June 25, 2014).17 Tex. Comptroller of Pub. Accts., Letter Ruling, STAR Acces-sion No. 200611755L (Nov. 15, 2006).18 39 Tex. Reg. 8504 & 8513 (Oct. 31, 2014) (to be codified at 34 Tex. Admin. Code §§ 3.280 3.285 (“Rule”)).

The Comptroller’s policies seem unrelated to the goal of effecting legislative intent. The Texas Legislature has not codified the economic substance doctrine. In fact, the Texas Tax Code underscores that common law principles may not restrict plain statutory language.19 And unlike statutorily codified economic substance considerations, it is ambiguous which party has the burden to prove a transaction has or lacks economic substance. For example, in Texas alter ego is an affirmative defense that must be pleaded and proved.20

Texas courts have also not adopted the economic substance doctrine. In 1982, Austin Court of Appeals dicta hinted that it would apply substance over form reasoning where the corporate form was a sham.21 The court stated that “[t]he judicial branch will not hesitate to infer from a statute a legislative intent to disregard the fiction.”22 However, the Delta Pipe plaintiff, not the Comptroller, argued that its own corporate form should be disregarded. The court refused, reasoning that a taxpayer cannot invoke substance over form to achieve a sales tax benefit.

More recently, Justice Willett, writing for the Texas Supreme Court, appeared to nearly sanction an economic substance inquiry.23 The Court, in dicta citing federal common law, noted that “[t]he United States Supreme Court has long observed that statutory determinations in tax disputes should reflect the economic realities of the transactions in issue.”24 Notably, the Comptroller relies on

19 Tex. Tax Code § 101.004 (“The rule that statutes in derogation of the common law shall be construed strictly does not apply to [the Tax Code]”). 20 See Tex. R. Civ. P. 94; Noble Exploration, Inc. v. Nixon Drill-ing Co., Inc., 794 S.W.2d 589, 591 (Tex. App—Austin 1990, no writ).21 Delta Pipe Fabricators, Inc. v. Bullock, 638 S.W.2d 652, 653 (“the Government may not be required to acquiesce in that [corporate form] election and where the corporate form is a sham the Government ‘may sustain or disregard the effect of the fiction as best serves the purposes of the tax statute.’”) (quoting Higgins v. Smith, 308 U.S. 473, 477 (1940)).22 Id. at 653 n.1.23 Combs v. Roark Amusement & Vending, L.P., 422 S.W.3d 632, 637 n.14 (Tex. 2013).24 Id. (citing Boulware v. United States, 552 U.S. 421, 429 (2008) (economic realities); Frank Lyon Co v. United States, 435 U.S. 561, 573 (1978) (substance over form doctrine); Comm’r v. Sw. Exploration Co., 350 U.S. 308, 315 (1956) (eco-nomic realities).


the Roark dicta as support for its proposed codification of economic substance principles.25

But less than three months after the Roark decision, Willett repudiated any suggestion of a new economic substance requirement: “We did not suggest that, in the guise of considering the economic realities . . . courts were authorized to impose an entirely new requirement for a tax exemption that simply is not found in the language of the statutory exemption.”26 Rather, Willett emphasized the importance of “[t]aking the Legislature at its word and giving the statute its plain meaning.”27 In other words, the law in Texas remains that legislative intent is reflected in the plain language of unambiguous statutes, rather than in any common law economic substance gloss on those statutes.

The Comptroller’s new rules propose a number of economic substance requirements and specifically target two structured aircraft purchase transactions. In the first structure, the taxpayer purchases an aircraft outside of Texas and then makes a capital contribution of the aircraft to an affiliated entity, which brings the aircraft into Texas. The taxpayer avoids sales and use tax because it does not purchase or use the aircraft in Texas. The affiliated entity avoids use tax because it has not purchased the aircraft from a retailer.28 In its 2006 letter ruling, the Comptroller rejected this structure for “transitory” affiliated entities, stating that “[a]n entity used as a means of circumventing the statutory scheme of taxation will not be recognized” and that the affiliated entity must have a “business purpose other than tax avoidance.”29 In proposed new Rule 3.280(c)(5), the Comptroller significantly expands this policy, reserving the right to impose use tax against either the taxpayer or the affiliated entity if the aircraft is transferred to the affiliated entity within one year of purchase, regardless of whether the affiliated entity is transitory or has a valid business purpose.

25 39 Tex. Reg. 8503, 8504 (Oct. 31, 2014) (explaining the Comptroller’s reliance on Roark to redefine a sale that is not in the regular course of business as one in which a purchaser of an aircraft outside of Texas transfers the aircraft to an affiliated entity, such as by a capital contribution, and the affiliated entity brings the aircraft into Texas).26 Combs v. Health Care Services Corp., 401 S.W.3d 623, 627 n.8 (Tex. 2013).27 Id. at 627.28 See Tex. Tax Code § 151.101(a).29 Letter Ruling, STAR Accession No. 200611755L (Nov. 15, 2006).

In the second structured transaction, the taxpayer-purchaser attempts to take advantage of the sale for resale (or lease) exemption by leasing the aircraft to a charter and management company, often with a Federal Aviation Administration Part 135 Certification. The lessee is frequently related to the lessor. In Texas, a sale for lease requires the purchaser to acquire the aircraft for the “sole purpose” of leasing the aircraft “in the normal course of business” to another person.30 To prove “sole purpose” under new Rule 3.280(j) the lessor would be required to give up all control over the aircraft’s operation, use, scheduling, and chartering; to reserve no right to use the aircraft or to approve pilots and crews used by others; and to retain no responsibility for the aircraft’s maintenance, insurance, or storage. If the lessee is a related entity, the Comptroller will further consider whether the lessor marketed the aircraft to unrelated third parties and whether the lease payments are sufficiently at arm’s length. The new rule contains a presumption that the lease is not in the normal course of business if the effective monthly lease rate is less than 1% of the aircraft’s purchase price.

The new aircraft-specific requirements are not in the sale for resale exemption statute. The proposed rule has been heavily criticized for singling out a single type of property for additional scrutiny, which does not necessarily reflect the realities of the aircraft leasing industry.

ConclusionStates are increasingly relying on common law economic substance doctrines in the sales and use tax arena. While courts have traditionally referred to the plain language of unambiguous tax statutes to determine a legislature’s intent, an economic substance inquiry looks beyond the statutory text purportedly also to give effect to legislative intent. Where the state legislature has not codified the economic substance doctrine, the basis for a taxing authority’s reliance on economic substance principles is often unclear.

30 Tex. Tax Code § 151.006(a)(2).



CREDITS AND INCENTIVES

Solar Power: Shedding Light on the Property Tax IncentivesStephen MarshallFandl, LLCRidgewood, NJPhone: (201) 670-0056E-mail: [email protected]

Years ago, it was rare to see a solar panel on the roof of a home or business. Solar technology has been around for over a century, but it wasn’t

until the 1970’s that it was marketed to consumers as an alternative to the utility company’s electricity. Despite the proven technology and apparent advantages, the concept did not take off as quickly as early solar investors had hoped. In general, solar energy systems were tremendously expensive and the payoff period was too long to interest most families or business owners.

In recent years, though, solar power has been rapidly gaining in popularity. The U.S. has seen a huge increase in residential and industrial solar applications and an inundation of solar manufacturers and providers. But why the sudden change? The technology has improved, and modern manufacturing has certainly lowered the cost of these systems. But the reality is that a solar system is still considered by most to be a long-term investment, where it takes years of energy savings to pay off the thousands of dollars spent on the equipment. So what else is spurring this sudden growth?

The word green comes to mind. The “green” initiative is all around us, and it seems that everyone is getting involved. Fortunately for those who are interested in solar energy, many of our state and local taxing authorities have gotten involved as well.

More than 30 states have implemented a number of tax incentives for the purchasers and owners of solar energy systems. These incentives come in many different forms, the most immediately noticeable being rebates, sales tax exemptions and income tax credits. These instant savings are very attractive to potential buyers and have encouraged many to pull the trigger on solar power for their home or business.

One of the lesser-known, but most advantageous, tax incentives that many states are beginning to offer is a property tax exemption. Real and personal property

taxes are some of the largest recurring expenses for any property owner. Moreover, year-to-year fluctuations in property taxes can have a substantial impact on a homeowner’s finances or a company’s bottom line.

Without these relatively recent property tax incentives, prospective solar consumers must take into consideration not only the initial cost of the equipment but also the additional property tax resulting from the value of the equipment being added to their property. These systems were (and still are) very expensive, and could substantially impact the taxable assessment. This would increase the annual tax liability, negating much of the savings in energy costs!

There are a few ways in which different states are offering solar property tax incentives, the most widely used approach being a simple exemption. In the majority of states, solar panels are considered to be real property and are included in the real estate assessment. For example, in states such as California, Connecticut and New Jersey, the full value of the solar equipment is excluded from the assessment, and therefore is completely exempt from property tax. Several other states offer a partial exemption, such as North Carolina where 80% of the value of solar equipment is exempt from property tax. A number of states offer a full exemption, but have a statutory expiration date. California’s exemption, for instance, will expire on January 1, 2017 unless legislative action is taken to extend the exemption. Others only offer the exemption for a limited period of time. New York offers a full exemption, but only for a period of 15 years from the date of installation.

In some states, local taxing authorities must decide whether to assess solar equipment as real or personal property. In North Carolina, for example, this determination is on the system’s application. Business related use of solar equipment will generally qualify the system as business personal property, whereas residential use will qualify the equipment as real property. Massachusetts uses a different approach to classification, looking more closely at the method of annexation. Equipment that is permanently affixed to a building structure will be assessed as real property. Systems that are portable or temporary in nature will be assessed as personal property. Some states offer an exemption from both real and personal property taxes, North Carolina being one of them. Other states, including Massachusetts, only offer exemptions for solar equipment assessed as real property, but have no incentives in place for equipment assessed as personal property.

Another approach to offering a solar property tax incentive is to treat the solar energy equipment as a conventional heating and cooling system for assessment purposes. A




conventional system will be substantially less valuable and will have less of an impact on the taxable assessment of the property. Illinois has implemented this approach, and other states have begun to adopt this method as well.

In addition to helping consumers, these property tax incentives have also helped to spur innovation and growth in the solar power industry. Colorado has been fostering the development of a number of independent community solar gardens by offering a property tax exemption, which has allowed these businesses to thrive.

Solar gardens are an alternative method of receiving solar energy. Rather than invest in the solar equipment on their individual property, community members can subscribe to their local solar garden and purchase the renewable energy through their utility company. In exchange for a solar garden subscription, customers receive a considerable credit toward their monthly bill.

While solar gardens do not offer any direct property tax benefits to the consumer, there is a huge benefit to the operators of the gardens. Colorado solar gardens receive a property tax exemption equal to the percentage of their total electricity capacity attributable to residential, government and otherwise exempt customers. Colorado’s community solar garden property tax exemption allows these businesses to produce and provide affordable renewable energy to their customers and has stimulated fantastic growth in the renewable energy industry in this state.

Incentives like these are helping homeowners and businesses all over the country take advantage of modern solar technologies. The rebates, credits and recent property tax exemptions have helped to revitalize the solar power industry and rebranded solar energy as a realistic and affordable option. As additional states jump on the bandwagon, more and more Americans will have access to renewable energy and the industry will continue to innovate and grow. It has been exciting to witness the recent evolution of renewable energy in the United States, and it would appear that if we stay tuned, there is still much more to come.

UNCLAIMED PROPERTY

An Overview of Unclaimed Property for the Tax ProfessionalRobert M. TucciTrue Partners Consulting LLCDallas, TXPhone: (972) 338-3673E-mail: [email protected] WeigandTrue Partners Consulting LLCDenver, COPhone: (303) 524-1452E-mail: [email protected]

Unclaimed property impacts all organizations; every business has an obligation to comply with the applicable unclaimed property reporting and

remittance requirements. While most companies today have heard of unclaimed property, or “escheat,” many are still unfamiliar with exactly what constitutes unclaimed property and how the laws surrounding it are applied. In general, unclaimed property is any intangible property that is owed by an organization and that has gone unclaimed for a specific period of time by the rightful owner. The company in possession of the unclaimed property has a legal responsibility to report and remit that property to the appropriate state.

HistoryThe concept of escheat is an historical remnant of the laws of feudal England. Originally, abandoned property became property of the sovereign under the common law doctrine of bona vacantia. Interestingly, the term “escheat” originally referred to the sovereign’s right to claim real property--not personal property--when the owner died without an heir. The definition of escheat has since evolved, and it is currently used to describe the process whereby intangible and tangible personal property become subject to the jurisdiction of a state. Currently all U.S. jurisdictions have laws addressing unclaimed property. However, while each jurisdiction has its own statutes addressing the issue, most state unclaimed property laws generally follow one of three Uniform Unclaimed Property Acts (1954 (amended in 1966), 1981, or 1995) (“collectively the Acts”). In addition to providing guidance on a range of unclaimed property reporting issues, the Acts were also created to provide a set of model statutes that each jurisdiction could adopt





in order to increase uniformity throughout the country. However, despite most states taking advantage of one of the three Acts as a baseline, modifications made by each state ensured that uniformity among state unclaimed property statutes continues to remain the exception rather than the rule.

Key Terms and ConceptsTo gain a better understanding of the basics, it will be helpful to become familiar with some common terms that are often used when discussing unclaimed property. Some key terms include the following:

• Holder—An entity in possession of, or which controls, property belonging to another.

• Owner—Any person, as identified in a holder’s books and records, having a legal or equitable interest in property held by a holder, including a creditor, claimant or payee.

• Intangible Property—The representation or evidence of property rights, such as stock certificates, checks, drafts, deposits, customer credit balances, gift cards, security deposits, unpaid wages and royalty payments.

• Last Activity Date—The date when last action taken by the owner of property indicating the owner’s interest in the property, such as making a deposit or withdrawal from a bank account.

• Dormancy/Abandonment Period—The continuous period of time that must elapse without activity being taken by the owner before property will be considered “unclaimed” and reportable in accordance with state unclaimed property laws.

• Abandoned/Unclaimed Property—A fixed and certain interest in intangible property held, issued, or owed in the course of a holder’s business that has gone unclaimed for the dormancy period by the rightful owner.

• Due Diligence—The effort (written notice) required by law that a holder must perform to locate an owner before reporting and remitting unclaimed property to the state.

• Last Known Address—A description, as identified in the holder’s books and records, of the location of the owner of unclaimed property sufficient for the purposes of the delivery of mail.

• Reportable/Escheatable Property—Unclaimed property that has reached the applicable jurisdiction’s dormancy period and which has not

been resolved through a holder’s due diligence efforts.

• Indemnification—The protection from subsequent claims (whether made by an owner or by another state) provided by a state to a holder that remits unclaimed property to a state.

States’ Rights to Unclaimed PropertyWhen unclaimed property is reported to a state, that state does not suddenly become the owner of the property – it merely holds the property for the rightful owner and attempts to return it to them. States derive their rights to claim unclaimed property based on the rights of the original owners and have the same right to claim the property as the owner would have had. This is known as the “derivative rights doctrine.” As a result, a state can only exercise jurisdiction over property that is “payable,” “due,” or “owing” by the holder to the owner and that has also remained unclaimed by the owner for the dormancy period. However, in some cases it can appear as though the states exercise even greater rights to unclaimed property than the original owner could have exercised. For example, some states require holders to remit funds representing the underlying value of gift cards, unused tickets and obligations to provide merchandise/services, when the owner of the property would not have been able to do so.

When and Where to ReportUnclaimed property statutes apply to any fixed and certain obligation of a holder once it has remained unclaimed for the dormancy period, at which time the company in possession of the unclaimed property has an obligation to comply with the applicable unclaimed property statutes. One concern that holders often have is: “How can I determine which state’s laws are applicable to the unclaimed property in my possession?”

In the seminal case of Texas v. New Jersey, 379 U.S. 674 (1965), the U.S. Supreme Court resolved this issue by establishing a set of priority rules to determine which state has the right to take custody of unclaimed property. The first-priority rule provides that unclaimed property escheats to the jurisdiction of the owner’s last known address as shown on the holder’s book and records. If the first-priority rule cannot be applied, the holder then determines which state has jurisdiction over the property using the second-priority rule, which provides that if the holder has no record of last known address, the last known address is in a foreign country, or the state of address does not provide for escheat of the property, the



state of domicile (generally, the state of incorporation) of the holder has the right to claim the property.

Holders’ Obligations Each holder must fulfill a series of requirements in order to be compliant with the applicable unclaimed property statutes. The first is to identify property that is “unclaimed” in its possession, i.e., where the applicable dormancy period has expired. Fortunately, this process can often be easily incorporated into a holder’s accounting functions so that tracking unclaimed property becomes a regular part of the standard reconciliation process. Once potential unclaimed property has been identified, the holder must perform any statutorily required due diligence procedures to reunite the owners with their property and to notify them that the property is at risk for being reported to the state as abandoned. While state statutes often require due diligence to be performed at specific times, many holders also perform due diligence before they are required to do so in order to quickly resolve items before they are reportable. Finally, the holder must prepare annual reports for the various jurisdictions and report and remit any unclaimed property to the state, including filing null or “zero” reports with those jurisdictions that require them.

Part of the process of identifying potential unclaimed property is to know when something is not reportable. For example, if the underlying property obligation is in dispute, it may not be considered dormant and, therefore, it is not reportable. In addition, property subject to federal law, such as benefit plans formed under the Employee Retirement Income Security Act (“ERISA”), may also be exempt from the reporting requirements. Finally, some jurisdictions have specific unclaimed reporting and remittance exemptions, such as exemptions for gift cards/rewards programs and business-to-business transactions, which should be reviewed to determine whether the potential unclaimed property is subject to the applicable reporting requirements.

How Unclaimed Property ArisesWhenever a liability goes unclaimed, there is a risk for unclaimed property. Examples of potential unclaimed property that every company generates include payroll, customer credit balances, accounts payable, employee benefit plans, deposits, and unidentified remittances. In addition, companies may generate certain types of unclaimed property that is unique to their specific industry, including layaways, gift cards, life insurance proceeds, royalty payments, and residuals.

There are many things that a holder should be aware of when looking to see where unclaimed property can

arise in its operations and where it may have a potential liability. Doing business with a large number of vendors could lead to issues like unresolved accounts payable, while employing a large workforce could give rise to uncashed payroll and employee benefits issues. While having a large number of customers is great for business, it can also lead to unresolved accounts receivable net credit balances. Other potential areas for concern include having a decentralized accounting function, filing few, incomplete, or no unclaimed property reports, or being involved in merger and acquisition transactions. However, probably the most important self-review that any holder should do is to determine whether or not they are truly educated on the subject of unclaimed property.

Unclaimed property is an area where what you do not know can be costly. There is typically no statute of limitations for unclaimed property and, as a result, no statute of limitations ever runs out and the liabilities never “go away.” In addition to interest and penalties, unclaimed property audit assessments typically cover a much longer “look-back” period than tax audits, often going back ten or more years.

Mergers and AcquisitionsAs mentioned above, a holder’s merger and acquisition (“M&A”) activity should be reviewed when assessing potential unclaimed property liabilities. M&A transactions do not, in and of themselves, create unclaimed property reporting obligations that did not already exist. However, the media attention often accompanying M&A activity can increase the likelihood of an unclaimed property audit of the target company. When reviewing a company that has undergone M&A activity, unclaimed property auditors generally focus on items including the following:

• Which liabilities the acquiring company inherited, • Whether the predecessor company properly

reported unclaimed property, • If it wrote off credit balances and other

obligations• Whether all the shares or other equity interests

were exchanged as part of the transaction consideration.

Most M&A due diligence teams today understand that a target’s unclaimed property attributes can be transferred to the acquirer in an acquisition. However, the majority of pre-acquisition research continues to focus primarily on the tax and financial attributes of target entities. In addition to payroll and accounts payable, target companies may also have potential unclaimed property liabilities related


to benefit and indemnity plan claim payments, royalties and promotional programs. Unclaimed property is so often overlooked because the amounts that show up on the target’s books may seem small, even immaterial, in the context of most M&A transactions. However, as there are typically no statutes of limitations for unclaimed property, these amounts accumulate over time and can lead to significant audit assessments against the acquiring company.

One way that a company can limit the potential unclaimed property it acquires from a target company during a merger or an acquisition is to pay attention to the structure of the transaction. For example, in a stock purchase or merger, the acquirer or surviving entity typically acquires all of the liabilities of the target, including any unclaimed property liability that the target may have. However, if specific provisions relating to retained liabilities or indemnifications are put into place—such as including a provision that the selling party retains all unclaimed property obligations for periods on or before the closing date of the transactions, or ensuring that indemnification provisions adequately address unclaimed property—the risk assumed by the acquiring company concerning the target’s past unclaimed property liabilities can be greatly reduced. Unlike a stock purchase, in an asset purchase, the acquirer only acquires those assets and liabilities it specifically agrees to assume in the transaction. As a result, there is less risk that an acquirer can unintentionally assume all of the target’s unclaimed property liabilities.

ConclusionUnclaimed property is an area with which most people do not have a lot of experience. However, as one learns more about it, unclaimed property ceases to be such a daunting subject. In this article, we’ve addressed some of the basic questions that most companies have about unclaimed property, as well as the potential for unclaimed property issues to arise in M&A transactions. Over the years many holders found that they acquired some unexpected liabilities as a result of their M&A activity, and we wanted make sure that others are aware of the potential unclaimed property risks before their next transaction. Overall, our goal has been to provide an overview of the topic, while at the same time trying to emphasize the seriousness with which the obligations and risks associated with unclaimed property should be treated.


IPT Live Webinars

February 3, 2015, 1:00 - 2:00 p.m. E.S.T.

February 17, 2015, 2:00 - 3:00 p.m. E.S.T.

February 26, 2015, 1:30 - 2:30 p.m. E.S.T.

March 26, 2015, 2:00 - 3:00 p.m. E.S.T.

2014 Year in Review from a SALT Perspective

February 3, 2015, 1:00 - 2:00 p.m. E.S.T.This hour-long webinar addresses many of 2014’s top SALT stories from an income tax perspective including issues implicated by reforms enacted by New York, the District of Columbia and Rhode Island, as well as discussion regarding several provisions of the Multistate Tax Compact. The webinar will also provide initial insight on what to expect in 2015.

Regional Sales Tax Update West Coast

February 17, 2015, 2:00 - 3:00 p.m. E.S.T.The West Coast update will discuss recent developments regarding indirect taxes in western states, including Arizona, California, Idaho, Nevada, New Mexico, Utah, and Washington. The updates will include legislative updates, department rulings and court cases. Specific topics include California’s partial manufacturing exemption, Arizona’s contracting exemption, Idaho’s treatment of software as a service, New Mexico’s phased-in exemption for tangible personal property consumed in the manufacturing exemption, and Washington’s common paymaster deduction.

Introduction to Formulary Apportionment

February 26, 2015, 1:30 - 2:30 p.m. E.S.T.This program is designed for tax professionals who are relatively new to state income tax. It focuses on basic apportionment formulas for both the sale of tangible property and the sale of services and intangibles. Recent trends towards super and single-weighted formulas will also be discussed.

Unleash the Potential - The Due Process Clause

March 26, 2015, 2:00 - 3:00 p.m. E.S.T.This session will provide an overview of due process analysis to date, with a focus on the U.S. Supreme Court cases addressing the Due Process Clause and the state tax cases that have applied it to negate the state’s taxing authority.


Best Practices for the Tax Administration of Income Taxes

Best Practices for Managing Audits and Litigation in Today’s Challenging Environment

Traps for the Unwary in Dealing with the Major Business Taxes – Income, Gross Receipts and Margin Taxes

State of State Taxation – Views from the Bench

Does PL 86-272 Cover More Than You Think?

Statutes of Limitation (RARs)

The Revival of Due Process - An Update on Economic Nexus

How to Build an Audit File on “Unitary-ness”

Combined Reporting – A Case Study

New MTC Rules on COP/ Business/Non-Business – Effect on MTC and Other States’ Flank Attacks on COP

Remaining Ethical During These Times of Cost Cutting

ABA/IPT Advanced Tax SeminarsMarch 16 - 20, 2015 ~ The Ritz-Carlton ~ New Orleans, LA

Brochure Registration

Hotel Reservations: King Bed Accommodations or Double Bed Accommodations

Remaining Ethical During These Times of Cost Cutting

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

The Tough Compliance Issues Associated with Taxing Services

Sales Taxation of Loyalty Programs

Local Tax Issues: Keeping up With the Other 9,948 Sales and Use Tax Collectors

Potpourri

Ask the Collector!

Economic Substance, Sham Transactions

National Multi-State Sales and Use Tax Update

Fact or Fiction? Cooperation and Communication between Tax Professionals and their Inside/Outside Advisors

Second Line Out (Audience Participation)

Bringing together business tax professionals

Fee Simple and Leased Fee Valuations: Distinctions with Real and Subtle Differences

Judges of General Jurisdiction: How to Present a Winning Case

Valuation Issues for Senior Housing

No Place but Up – Interest Rates, Rents, Prices, Real Estate and the Economy

Roundtable: Perspectives on Valuation Issues

Practical Applications of the Commerce Clause to Preempt Property Taxes on Inventory in Transit

Regional Mall Valuations . . . Market Solutions to Win Your Case

Murder, Mischief, Mayhem, and Property Values: What Happened Next Door?

Roundtable: Update on Key States

Are We Having Fun Yet? The Valuation of Entertainment Venues

Ethics in a Tax Practice: Are They Mutually Exclusive?

INCOME TAX SEMINARMARCH 16-17, 2015

SALES/USE TAX SEMINARMARCH 17-18, 2015

PROPERTY TAX SEMINARMARCH 19-20, 2015

Join Us in the Big Easy!


2015 IPT Sales Tax School IIntroduction to Sales and Use TaxesFebruary 22 - 27, 2015Georgia Tech Hotel & Conference CenterAtlanta, Georgia

Online Registration Registration Form

Brochure Hotel Reservation

Sales Tax School I is a five-day school that provides students with fundamental information on essential sales and use tax principles and concepts. Research, accounting, auditing and other technical skills are discussed and practiced. Emphasis is placed on small discussion groups and practical applications. Successful completion of a final examination is required.

This is an introductory school and a prerequisite for the Sales Tax School II being offered April 26 - May 1, 2015. Individuals who plan to take Sales Tax School II are required to successfully complete Sales Tax School I or pass a Sales Tax School I Challenge Exam.

2015 IPT Sales Tax School II:Theory and Practice for the Experienced Sales & Use Tax ProfessionalApril 26 – May 1, 2015Marriott Kingsgate Conference CenterUniversity of Cincinnati, Cincinnati, Ohio

Online Registration Registration Form

Brochure Hotel Reservation

This intermediate level, five-day school guides students through a review and analysis of many 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. Early registration is encouraged for this popular school.

The school is composed of 16 general sessions, shown below 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


Credits and Incentives SchoolApril 20 - 23, 2015

The Cliff Lodge Salt Lake City, Utah

IPT’ssecond Credits and Incen-tives School will take place at the Cliff Lodge near Salt

Lake City, Utah from April 20 - 23, 2015. The school covers the fundamentals of credits and incentives and is designed for individuals who have a basic knowledge of the topic.

There is one registration fee which covers 9.5 hours of pre-requisite web-based coursework, approximately 22.5 hours in a face-to-face school, and six hours of additional 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. Successful comple-tion of all three segments and the school ex-amination, which is administered throughout the coursework, is required. The faculty represents a broad-based set of backgrounds and many de-cades of experience in the field.

Online electives

Face-to-face 3 Day School

Online pre-requisite coursework

The 4th Edition of the Property Taxation Book is Now Available!The 4th edition of the Property Taxation book has been updated and is now available in a convenient new format! The book includes updated content, paired with the essential information that is useful to tax professionals at every stage of their career.

Member feedback revealed that at almost 650 pages, the book was too cumbersome to carry when traveling. This made it difficult to use the resource outside of the office. To solve some of these issues, the book was condensed into a flash drive, which is user-friendly, easily searchable and highly portable. You’ll notice the difference!

The flash drive costs $100 for IPT members, $125 for those employed by companies with IPT members and $175 for non-members. Order your copy today at ipt.org.

State Business Income Taxation Book

State Business Income Taxation includes contributions from some of the nation’s preeminent state business income tax practitioners, a virtual Who’s Who of SALT professionals. This treatise, derived from the authors’ many years of expertise in state business income taxation, is a vital reference tool. Let the leading state and local income tax experts provide you with the answers you need by purchasing this book and accompanying CD today!

Click here to order this vital resource.


2015 Real Property Tax SchoolAT&T Executive Education Center

July 19 - 24, 2015 ~ Austin, TX

This is a comprehensive, five-day school for property tax professionals who have at least three years of full-time experience in the real property tax area. The purpose of the program is to provide students with fundamental and integrated knowledge of property tax principles, concepts and technical skills essential to the field. The course is designed to provide a deep dive into the real property tax valuation process and related subjects. The Property Tax School must either be successfully challenged, or attended and passed, before an individual can take the Real Property Tax School.

Tools of the Profession

IPT Annual ConferenceJune 28 - July 1, 2015San Diego, California

Anchors Aweigh!Chart your course for success

The Institute for Professionals in Taxation®

brings together tax professionals from around the country to learn about new practices, exchange ideas, and stay on top of the latest tax developments. IPT’s 39th Annual Conference, June 28 – July 1, 2015, at the Hilton San Diego Bayfront San Diego, California, provides you an opportunity to learn about critical state and local tax issues.

The planning committees are focused on providing deep-dive sessions full of relevant information that is important to you. While you are there, you will have the opportunity to learn from your peers, socialize with colleagues, and interact with others experiencing similar industry issues.

We hope that you will invest in your professional development and attend this year’s Conference. For more information visit www.ipt.org.

See you in San Diego!

CODE OF ETHICS: CANON 11IT IS UNETHICAL for a member, in the performance of a tax assignment, to fail to exercise independent judgment in advising and representing a client


CMiCornerCERTIFIED MEMBER

CMI

• INST

ITUTE

FOR PROFESSIONALS IN TAXATION

® •

Continuing Education Tracking System for CMIs

IPT tracks CMI continuing education through an online system which allows CMIs to access

their status report through the IPT website. Please take a few minutes to sign in to the IPT website to review your CE Status Report and make note of your “term began” and “term ends” dates to ensure you fulfill your CE requirements in a timely manner. Non-IPT Continuing Education can no longer be submitted to the IPT office through email, fax or mail. Rather, you must sign in to the IPT website, fill out the form (see directions below) and upload supporting documentation. This process helps your CE get posted faster. Attendance at IPT programs will be automatically posted to this report with the exception of Local Luncheons. The Local Luncheon Chairs will continue to submit sign-in sheets to the IPT office.

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. Your status report 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 confirmation 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 his/her respective discipline (sales, property or income tax) within each five-year term. The last day to submit any CE credit earned during the 2014 calendar year will be March 31, 2015. 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].

T hank you to IPT members who have already joined the IPT LinkedIn group as we now have over 3200 members. We encourage you to join the IPT

LinkedIn Discussion group and share the group with oth-er tax professionals in your network.Follow IPT on Facebook and Twitter and like our Face-book page for updates on IPT event registration, photos, and other IPT news. If you have not already done so, please join these groups today by clicking on the icons below.Thank you for your continued support of IPT!



Candidate ConneCtion

CMi &

CCiP

Question of the Month

What is the CMI / CCIP Candidate Application Process?

Answer: 1. Submit Application2. Application is reviewed by IPT Staff & CMI or CCIP

Committee3. Applicant notified of candidacy

– Includes information on accessing study material online.

4. Applicant notified of eligibility – Met requirements: eligible to sit at next exam.– Lacking requirements: ineligible to sit without

further verification of requirements.5. Eligible candidates will receive an email 6 – 8 weeks

prior to each exam with the exam details. 6. Examinees are notified of the exam results in writing.

Please note: *Applicants have six consecutive testing opportunities from the date of application (not eligibility) to meet the requirements in effect for certification.

*Applicants must notify the IPT office in writing to update their applications as requirements are met.

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

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

Property Tax Calendar ~ March 2015

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 Due:

AK* HI* KS* MI* SC* SD* VA*AZ* 60 days after noticeCT* 3/20 or 2/20DE 3/15**NH 3/1**NM 3/31 or 30 days after noticeVA* Assessor ReviewsNY 3/1** - Nassau County 3rd Tuesday - Rochester 3/15** - AuburnOH 3/31PA 3/31 Allegheny CountySD Thursday preceding the third Monday

Personal Property Filing Dates: GA* MA MO MT OR TN VA* WI WY . . . . 3/1**UT (Salt Lake County) . . . . . . . . . . . . . . . . . . 3/1**ID KS OK . . . . . . . . . . . . . . . . . . . . . . . . . . 3/15**

Assessment Dates:IN 3/1**

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

Check Jurisdiction. Confirm all information with local taxing jurisdictions.


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 Manager (Louisville, Kentucky) –MCM LLP. Candidates may apply to [email protected]. Date Posted: 1/21/2015 (IPT1568)

Sales Tax Analyst II (Richmond, Virginia) – CarMax. Send a resume to [email protected]. To view all of our open positions please visit www.carmax.com. Date Posted: 1/20/2015 (IPT1567)

Virtual Marketing Team Member – Please contact Kitty Guinsler [email protected]. Date Posted: 1/16/2015 (IPT1566)

Unclaimed Property Consultant (Atlanta, Georgia) – Dixon Hughes Goodman LLP. Apply online at http://bit.ly/151TZKs. Date Posted: 1/16/2015 (IPT1565)

Sales & Use Tax Manager (Atlanta, Georgia) – Dixon Hughes Goodman LLP. Apply online at http://bit.ly/1xttpjb. Date Posted: 1/16/2015 (IPT1564)

Sale & Use Tax Senior Associate (Atlanta, Georgia) – Dixon Hughes Goodman LLP. Apply online at http://bit.ly/1DItZC6. Date Posted: 1/16/2015 (IPT1563)

Manager/Senior Manager Excise and Property Tax (Chicago, Illinois) – United Airlines. To apply, please go to www.united.jobs and reference job ID WHQ00006066-EA. Date Posted: 1/13/2015 (IPT1562)

Senior Tax Advisor, Sales & Use (Memphis, Tennessee) – To apply, https://career8.successfactors.com/sfcareer/jobreqcareer?jobId=14806&company=IPProd&username. Date Posted: 1/9/2015 (IPT1561)

Senior Sales Tax Accountant (Lawrenceville, Georgia) – Send resume to: [email protected]. Date Posted: 1/9/2015 (IPT1560)

Tax Team Manager (Libertyville, Illinois) – Tax Specialty: Sales Tax. VW Credit Inc. (VCI). Link to apply: www.vwgroupcareers.com (Click on search jobs and then VW Credit, Inc.). Date Posted: 1/9/2015 (IPT1559)

Tax Manager (Nashville, Tennessee) – HCA. Interested candidates should apply on HCA’ site directly at http://hca.jobs/job/144382 or you can also go directly on the job site http://hca.jobs and keyword search for job code 10201-14179. Date Posted: 1/8/2015 (IPT1558)

Operating Tax Manager (Fort Worth, Texas) – Pilot Thomas Logistics (“PTL”). Link to Apply: https://pls.applicantpro.com/jobs/160931.html. Date Posted: 1/8/2015 (IPT1557)

Consultant, Credits & Incentives – Apply online at www.ryan.com. Date Posted: 1/8/2015 (IPT1556)

Senior Income Tax Accountant (Dalton, Georgia) – Shaw Industries Group, Inc. To apply, https://shaw.taleo.net/careersection/professional/jobdetail.ftl?job=65765. Date Posted: 1/8/2015 (IPT1555)

Tax Data Analyst (Dalton, Georgia) – Sales and Income Tax. Shaw Industries Group, Inc. To apply, https://shaw.taleo.net/careersection/professional/jobdetail.ftl?job=65987. Date Posted: 1/8/2015 (IPT1554)

Property Tax Specialist (Ft. Myers, Florida and Houston, Texas) – GE. To apply for Ft. Myers, Florida – https://xjobs.brassring.com/1033/ASP/TG/cim_jobdetail.asp?partnerid=54&siteid=5346&OReq=2023853 or to apply for Houston, Texas – https://xjobs.brassring.com/1033/ASP/TG/cim_jobdetail.asp?partnerid=54&siteid=5346&OReq=2023846. Date Posted: 1/7/2015 (IPT1553)

Director of Tax (Pleasanton, California) – Temp to Perm Opportunity. MegaPath. Apply: https://careers-megapath.icims.com/jobs/2816/director-of-tax/job or email: [email protected]. Date Posted: 1/6/2015 (IPT1552)

Senior Tax Analyst Property (Pleasanton, California) – Temp to Perm Opportunity. MegaPath. Apply: https://careers-megapath.icims.com/jobs/2813/sr-tax-analyst---property/job or email: [email protected]. Date Posted: 1/6/2015 (IPT1551)





https://career8.successfactors.com/sfcareer/jobreqcareer?jobId=14806&company=IPProd&username

https://career8.successfactors.com/sfcareer/jobreqcareer?jobId=14806&company=IPProd&username


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IPT 2015 CALENDAR OF EVENTS

IPT Live Webinar 2014 Year in Review from a SALT Perspective February 3, 2015 1:00 - 2:00 p.m. E.S.T.

IPT Live Webinar Regional Sales Tax Update West Coast February 17, 2015 2:00 - 3:00 p.m. E.S.T.

Sales Tax School I Georgia Tech Hotel & Conference Center Atlanta, GA February 22 - 27, 2015

IPT Live Webinar Introduction to Formulary Apportionment February 26, 2015 1:30 - 2:30 p.m. E.S.T.

ABA-IPT Advanced Income Tax Seminar The Ritz Carlton Hotel New Orleans, LA March 16 - 17, 2015

ABA-IPT Advanced Sales/Use Tax Seminar The Ritz Carlton Hotel New Orleans, LA March 17 - 18, 2015

ABA-IPT Advanced Property Tax Seminar The Ritz Carlton Hotel New Orleans, LA March 19 - 20, 2015

IPT Live Webinar Unleash the Potential - The Due Process Clause March 26, 2015 2:00 - 3:00 p.m. E.S.T.

Credits & Incentives School The Cliff Lodge Salt Lake City, UT April 20 - 23, 2015

Sales Tax School II Marriott Kingsgate Conference Center Cincinnati, OH April 26 - May 1, 2015

Basic State Income Tax School The Cliff Lodge Salt Lake City, UT May 31 - June 5, 2015

Advanced State Income Tax School The Cliff Lodge Salt Lake City, UT May 31 - June 5, 2015

CMI Sales Tax Exams Hilton San Diego Bayfront San Diego, CA June 26 - 27, 2015

CCIP Exams Hilton San Diego Bayfront San Diego, CA June 27 - 28, 2015

CMI Income Tax Exams Hilton San Diego Bayfront San Diego, CA June 27 - 28, 2015

CMI Property Tax Exams Hilton San Diego Bayfront San Diego, CA June 27 - 28, 2015

IPT Annual Conference Hilton San Diego Bayfront San Diego, CA June 28 - July 1, 2015

Property Tax School Georgia Tech Hotel & Conference Center Atlanta, GA August 9 - 13, 2015

CMI Sales Tax Exams Renaissance Esmeralda Resort Indian Wells, CA September 25 - 26, 2015

Sales Tax Symposium Renaissance Esmeralda Resort Indian Wells, CA September 27 - 30, 2015

Value Added Tax Symposium Renaissance Esmeralda Resort Indian Wells, CA September 30 - October 2, 2015

Personal Property Tax School Georgia Tech Hotel & Conference Center Atlanta, GA October 11 - 15, 2015

CMI Income Tax Exams JW Marriott Austin Austin, TX October 31 - November 1, 2015

CMI Property Tax Exams JW Marriott Austin Austin, TX October 31 - November 1, 2015

Income Tax Symposium JW Marriott Austin Austin, TX November 1 - 4, 2015

Property Tax Symposium JW Marriott Austin Austin, TX November 1 - 4, 2015

Credits & Incentives Symposium JW Marriott Austin Austin, TX November 3 - 6, 2015

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

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