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Multistate Tax: The Top 3 State Tax Issues For 2017



Monika Miles

Happy New Year!

I always like the fresh feeling of a New Year – a clean desk, a new calendar, and a relaxed and grateful frame of mind from coming off of the holidays. I’m particularly excited about 2017 because it’s a year of special milestones and anniversaries for me – both personally and professionally, and I’m a big believer in celebrating those special occasions. I’m not sure exactly what the year will bring, but I have big expectations for it.

As we begin 2017, here are three things to keep in mind from a multi-state tax perspective:

—New Sales Tax Rates – The first of the year often brings rate changes! Many of our readers have automated systems and software to calculate their sales tax. But not everyone! Be mindful of changes – particularly in your “home jurisdictions”. In my home jurisdiction – the San Francisco Bay Area – there were changes in many counties, cities, etc. And some of those rates will change again in the upcoming quarters as a result of decisions made by local voters. So, be aware!

—“Nexus” continues to be the word of the year for state tax professionals. Cliché, you say? Yet, states continue to aggressively challenge the concept of physical presence, and are more apt to pass laws which fly in the face of the US Supreme Court’s 1992 ruling in Quill which said that companies had to have substantial physical presence before a state could assert a sales tax collection responsibility.

—Related to nexus and Quill, will 2017 be the year that Congress makes some legislative decisions about the “online sales tax” debate? Perhaps you’ve seen our blog about the pros/cons of the various previously proposed legislation . With a new Congress and a new President, what can we expect? Stay tuned. If something DOES get passed, it will affect most companies who engage in on-line sales.

Those were all global topics for all states, but here’s an addition to the “Top 3” for companies looking to expand in California:

The “California Competes Tax Credit” is still in action and available to businesses expanding within the Golden State. The latest application period is open now through January 23rd. $100 million is available to be distributed to companies growing within California and expanding into the state from elsewhere. 25% is earmarked for small businesses. So, if your company is planning to add significant headcount or property within California in the upcoming year(s), consider applying for the program.

I hope that, you, our readers, enjoy this blog, and its dedication to both multi-state hot topics AND also Rainmaking tips and reminders. I think the two go hand in hand and even if you’re more interested in one topic than the other, you can probably pick up a few useful pointers about the other along the way.

Whatever you find interesting about our community, we wish you and yours a very happy new year filled with health, happiness and prosperity. And we invite you to keep coming back!

Happy 2017!

Monika Miles

Monika founded Miles Consulting Group which focuses on multi-state tax consulting, helping clients navigate state tax issues such as sales tax and income tax in interstate commerce, including e-commerce.

Prior to forming the firm, Monika worked for 12 years combined in Big 4 Public Accounting and private industry. Monika has provided such services as federal and state income/franchise tax compliance and consulting, sales/use tax consulting, audit support, and credits and incentives reviews. She has served clients in a variety of industries including manufacturing, technology, telecommunications, construction, utility, retail and financial institutions.

Monika graduated from the University of Texas at El Paso (UTEP) with a BBA in Accounting/Finance and has a Masters in Taxation from San Jose State University.