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Tag Archive for California

New State Tax Laws Effective October 1, 2019: What You Need To Know

Monika Miles

Are you curious what state tax updates are on the horizon? October 1, 2019 is a big date coming up; numerous states have new online sales tax provisions, amnesty programs and other legislative changes going into effect in just a few weeks. Keep reading for a quick summary of new laws and programs to keep an eye out for beginning next month.

Alabama’s Simplified Sellers Use Tax

As of October 1, Alabama requires remote retailers selling more than $250,000 in total sales (taxable and nontaxable) to begin collecting and remitting sales tax. Although sellers need to file their Alabama state tax returns monthly, these sales and use taxes fall into the “simplified” category because they’re a flat 8 percent on all purchases, regardless of the shopper’s locality in the state.

Arizona Eases Into Online Sales Tax

Arizona’s transaction privilege tax (TPT) is designed to ease the smaller out-of-state retailers into online sales tax compliance. As the Arizona Department of Revenue explains, the threshold for remote alleges to pay TPT is:

  • $200,000 in 2019 (beginning October 1)
  • $150,000 in 2020
  • $100,000 in 2021 and thereafter

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California: Relief For Marketplace Sellers?

Monika Miles

The state of California is at it again! But this time offering some relief for out of state sellers. In a continuing quest to require out of state sellers who created nexus as a result of engaging in programs like Fulfillment by Amazon (FBA) to register and retroactively file in the state, CA has passed SB 92 and the California Department of Tax and Fee Administration (CDTFA) has issued guidance. On July 1, 2019, the CDTFA issued Special Notice L-681 pertaining to Senate Bill 92 that discusses a special tax relief program. This program is only available for “qualifying retailers.”

Who Qualifies?

A “qualifying retailer” is a marketplace seller that meets certain requirements. Please note that all of the following conditions must be met:

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What You Need To Know About The Taxability Of SAAS In Nine Western States

Monika Miles

When it comes to Software-as-a-Service (SaaS) companies, there’s often confusion regarding both nexus and the taxability of this revenue stream.

And while the Wayfair decision seems like it’s directed only at online sellers, traditional multi-state sellers (including those that generate revenue from SaaS and software) are also affected, as nexus is now easier to establish. Once it is established – either by traditional physical presence or by sales volume – then companies will need to consider the taxability rules of SaaS in each state in which they have nexus.

Is SaaS even taxable? Because SaaS and cloud computing don’t always clearly fall into existing tax definitions, different states interpret its taxability in different ways. Some regard it as similar to electronically downloaded software, while others consider it a service, which may be taxable or not. And what about electronically downloaded software? Is it treated differently from SaaS?

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Sleeping Giants Awaken: California, Texas And Wayfair

Monika Miles - What Is Nexus.

In the United States, the sales tax landscape has changed drastically due to the recent U.S. Supreme Court Case of South Dakota v. Wayfair (June 2018). Following this landmark decision which made it easier for companies to create nexus in states, many states have enacted legislation which establishes guidelines, thresholds for economic nexus. In a previous blog, we talked about this epic decision.

What is Economic Nexus?

In the past, companies needed to have physical presence, or “boots on the ground,” in a state in order to have nexus (or taxable presence) in a state. This meant that a company needed to have offices, inventory, employees, or contractors in a state for a certain amount of time. Companies now don’t necessarily need to have physical presence in a state for them to create nexus; they now can have nexus in a state by virtue of economic nexus. Economic nexus essentially means that companies with sales of a certain dollar amount or a certain number of transactions with a state are required to register, collect and remit sales tax. Some states require both criterion. Additionally, note that some states base their economic threshold on taxable sales, while other states mention gross sales.

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Senior Tax Manager/Partnerships (Northern California)

Senior Tax Manager Job- Northern California

The Senior Tax Manager role requires partnership, S corp and individual tax consulting experience and the skills to effectively diagnose clients’ needs in order to develop and implement solutions. Primary responsibilities involve providing tax compliance, tax accounting, tax research and planning on partnerships, s corps and individual tax return for sophisticated clientele. We will build upon your technical strengths in order to expand your expertise in partnership, s corp and individual taxation. Our firm builds well-rounded tax experts to serve a myriad of client needs which leads to continued professional growth. Our culture is to develop trusted tax advisors with sound judgement with the highest ethical standards in the profession. The Senior Tax Manager/Partnerships will be responsible for a range of projects including:

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Director of Tax (Orange County, CA)

Director of Tax Job - Orange County, California

TaxConnections Inc. has been retained to conduct a search for a Director of Tax in Southern California/Orange County area. Our client is a 3B multinational holding company that offers an exciting and fun work environment aligned with a highly professional management team. This company offers an exciting dream job for a Head of Tax who wants to be located in Southern California.

The Tax Director will be responsible for overseeing and managing relationships with external and internal business partners to improve processes and procedures for the tax organization. The Tax Director must have the ability to identify areas of risk and tax opportunity for the company in all areas of international, federal, state, local, sales and use tax. Role involves a wide range of domestic and international tax matters including consolidated income tax provision, tax compliance and transfer pricing.

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Estate Planning In A Nutshell

Haik Chilingaryan, Estate Planning Tax Lawyer, Los Angeles, CA

What Is Estate Planning?

An estate plan includes trusts, wills, health care directives, financial directives, guardian designations, and living wills. However, proper estate planning does not merely include the delivery of these documents, but the process of identifying the objectives sought by our clients and putting in place the strategies that help them achieve their goals. Thus, estate planning primarily consists of the advice and guidance that you get from a professional who can be a steward in the preservation of your wealth.

In a nutshell, our firm takes the comprehensive approach to estate planning, which includes not only the methods in which a person’s assets are distributed upon death, but also the implementation of strategies that preserve the most amount of wealth during one’s life. It follows that the most amount of wealth that can be preserved during one’s life can increase the overall value of the estate, which the beneficiaries will receive upon one’s death. Our firm also uses the various tools available in the legal realm in order to protect the assets of our clients from creditors and predators.

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Tax Job – Tax Manager/ Partnerships – Northern California

Tax Manager/Partnerships (San Francisco Bay Area, CA)

The Tax Manager role requires partnership, S corp and individual tax consulting experience and the skills to effectively diagnose clients’ needs in order to develop and implement solutions. Primary responsibilities involve providing tax compliance, tax accounting, tax research and planning on partnerships, s corps and individual tax return for sophisticated clientele. We will build upon your technical strengths in order to expand your expertise in partnership, s corp and individual taxation. Our firm builds well-rounded tax experts to serve a myriad of client needs which leads to continued professional growth. Our culture is to develop trusted tax advisors with sound judgement with the highest ethical standards in the profession. The Tax Manager/Partnerships will be responsible for a range of projects including:

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Tax Manager/Partnerships – Northern California

Tax Job, TaxConnections Retained Executive Search

Kat Jennings, TaxConnections CEO and internationally recognized tax search consultant, has worked with many firms over the years. One of her clients is an East Bay Area boutique tax practice with former Big Four Tax Partners and has grown to around a 50-person tax practice. They offer a culture of support, respect, flexibility, and opportunity that is refreshing to experience these days.

Tax Manager/Partnerships (Pleasanton, CA)

The Tax Manager role requires partnership, S corp and individual tax consulting experience and the skills to effectively diagnose clients’ needs in order to develop and implement solutions. Primary responsibilities involve providing tax compliance, tax accounting, tax research and planning on partnerships, s corps and individual tax return for sophisticated clientele. We will build upon your technical strengths in order to expand your expertise in partnership, s corp and individual taxation. Our firm builds well-rounded tax experts to serve a myriad of client needs which leads to continued professional growth. Our culture is to develop trusted tax advisors with sound judgement with the highest ethical standards in the profession. The Tax Manager/Partnerships will be responsible for a range of projects including:

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California And Market Based Sourcing Of Revenue As Related To Income Tax Apportionment

Market-Based Sourcing of revenue for services as related to income tax apportionment purposes is becoming a trend among states. As our economy becomes more service intensive, determining how to properly source service and intangible revenue is vital to the states. According to Bloomberg BNA, California’s latest draft rules for market-based sourcing of sales of intangibles are confusing and could affect defense contractors, asset managers, and R&D service companies.

On May 18, 2018, the California Franchise Tax Board (FTB) held its third Interested Parties Meeting (IPM) regarding proposed amendments to California Code Regulations, Title 18 (CCR), Section 25136-2. This section of the CA Regulations describe the provisions of market-based sourcing rules for California taxpayers.

Background

California shifted from the cost-of-performance method to the market-based sourcing method when assigning income from sales of services and intangibles, such as software.  The shift came with California’s switch to elective single-sales-factor apportionment for multistate taxpayers in 2011 and mandatory single-sales-factor apportionment in 2013.

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What You Need To Know About California’s SB 993

Sales tax is a major revenue source for many states, including California, which is why its legislature has been looking for additional ways to collect fees under the ‘sales tax’ umbrella.

For years, State Senator Bob Hertzberg has been trying to extend the state’s reach by imposing sales tax on services. Although 2015’s Senate Bill 8 didn’t pass, there’s another bill recently heard in the Senate Governance and Finance Committee: Senate Bill 993 (SB 993).

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Understanding Marginal Income Tax Brackets

By any measure, the tax code is huge. According to Commerce Clearing House’s Standard Federal Tax Reporter it’s up to 74,608 pages in length.¹

And each Monday, the Internal Revenue Service publishes a 20- to 50- page bulletin about various aspects of the tax code.²

Fortunately, it’s not necessary to wade through these massive libraries to understand how income taxes work. Understanding a few key concepts may provide a solid foundation. Read more