Although most states have income and franchise taxes, some states have recently enacted variations of gross receipts taxes, changed the apportionment formula or tax base, and limited net operating loss carryovers. Maintaining current knowledge on these changes for all of the states in which a company does business can be burdensome and reduce the company’s focus on other areas of tax.
Our professionals specialize in state income and franchise tax issues covering many different industries such as manufacturing, construction, retail, oil and gas, real estate and other services. We understand state tax law and how it applies to the corresponding state tax return.
These state programs were created for companies to remedy income and franchise tax deficiencies. We can initiate the discussion with the state tax authority and assist with completing the applications, as well as other required documentation and tax returns associated with these programs. This is typically done on an anonymous basis.
In recent months, many states have changed methods of allocating sales from the cost-of-performance to a more market-based sourcing.
Last month, New Jersey, New York and Connecticut filed a suit against the IRS and Treasury Department challenging rules that restrict certain workarounds to the cap on state and local tax deductions.
Employees traveling to multiple states for work during the year may soon see some relief when filing taxes. Senate Democrats and Republicans have come to an agreement on a bill that would ease the filing process for these employees. The bill would simplify and standardize state income tax collection for traveling employees working out of state temporarily. The bill would also provide relief for employers who must comply with withholding and reporting requirements.
On Oct. 4, 2018, New Jersey adopted several changes to the New Jersey Corporation Business Tax including requiring combined reporting for tax years ending on and after July 31, 2019. This requires companies that have common ownership and are engaged in a unitary business to file a combined New Jersey return if at least one of the entities is subject to New Jersey Corporation Business Tax.
The program begins on November 15, 2018 and ends January 15, 2019.