Monday, June 21, 2010

SALT To Taste: Is Your Company Paying Too Much Texas Margin Tax?

This article discusses the alternative methods of computing the Texas margin tax and potential ways to mitigate the tax.  Many taxpayers fail to fully understand the underlying computations of the alternative methods of computing the tax.

Read this SALT To Taste newsletter here.

Tuesday, June 8, 2010

How to Fight Back Against State Tax Audit Assessments: Developing an Advantageous Relationship with Your Auditor

To many taxpayers, the average audit is a nuisance—and the temptation to simply settle and move on is very strong. In an earlier article, Geoffrey J. Christian, of Dow Lohnes Price Tax Consulting LLC, laid out a case for the long-term benefits that arise when a taxpayer pushes back against audit assessments. In this article, Marshal Kline of Dow Lohnes Price, discusses one of the most effective tools available to any tax professional—creating a good rapport with the auditor.

In our present environment, where state tax audits in all areas of taxation are on the rise, many tax professionals find themselves spending more and more time being reactive than proactive. Fewer are the days tax professionals go to work and actually find themselves devoting their time to the things they intended. Instead, they are being pulled in a variety of directions, scheduling field audits, responding to information document requests (IDRs), reviewing notices of deficiency along with the related workpapers and analyses, drafting protests in response to same, and, when there is time, preparing the tax returns that begin the whole process anew.

To continue reading entire article, click here .

Reprinted with permission from BNA Tax Management Weekly State Tax Report.  Authored by Marshal Kline, Dow Lohnes Price Tax Consulting Group, and published by BNA Tax Management Weekly State Tax Report on May 28, 2010.

Thursday, May 6, 2010

SALT To Taste: It Serves an Operational Function to Whom? Many States are Applying 'Operational Function' in the Wrong Direction

One of the many areas of confusion and misapplication that we see, when states assert taxation of income based on an operational function concept, is determining in which taxing jurisdiction the operational function is served, thereby resulting in that state’s ability to tax non-domiciliary income earned from a separate asset.  In evaluating application of the operational function concept, the basic questions with which to begin are who or what is serving the operational function; to whom is the operational function being served; and where is the recipient of this benefit located?  It’s very possible the state has itself turned around and is lost on the operational function path.

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Friday, March 26, 2010

SC Supreme Court Hears Oral Arguments on Combined Filing Case

On March 16, 2010, the South Carolina Supreme Court heard oral arguments in the appeal of Media General Communications, Inc. & Media General Broadcasting of South Carolina Holdings, Inc. v. S.C. Dept. of Rev. & Media General, Inc. v. S.C. Dept. of Rev., Admin. Law Ct. Docket Nos. 07-ALJ-17-0089-CC, 07-ALJ-17-0090-CC (May 4, 2009).

View announcement here.

Monday, March 15, 2010

Are Your State Audits Ridiculous? It's Time to Push Back!

It's important to stand firm against aggressive state auditors who attack your tax reporting positions. This article examines how you can successfully navigate through an arbitrary or unreasonable assessment and use the "push back" approach to gain favorable results in the audit battle.

Please click here to view the full article.  Reprinted with permission from BNA Tax Management Weekly State Tax Report.

Authored by Geoffrey J. Christian, Dow Lohnes Price Tax Consulting Group and published by BNA Tax Management Weekly State Tax Report on January 22, 2010.

Thursday, March 4, 2010

SALT To Taste: How Important is Consistency Among "Uniform" States that are not so Uniform?

Many states have adopted and incorporated uniform acts into their tax statutes.  Recently, an Oregon case considered whether consistent reporting positions among such states should be mandatory regardless of each state's distinct interpretation and application of their own tax statutes.  This article looks at the Oregon court's conclusion that a taxpayer's facts can result in disparate treatment among states and that the treatment of any item is controlled by a state's laws.  As a result, great diligence should be taken to analyze the laws of each state when establishing tax reporting positions.

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SALT To Taste: To What Extent Should Taxpayers Rely on State Statutes and Regulations in Flowing Through Apportionment Factors of a Partnership to Corporate Partner?

Properly acknowledging critical U.S. Constitutional principles when apportioning the income of a partnership is key when preparing state corporate income tax returns and guarding against erroneous state assertions involving the state's interpretation of statutes and regulations. In this article, see an example of how a state could misapply these Constitutional principles.

Read this SALT To Taste newsletter here.