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Tag Archive for California

California: Pass -Through Entity Elective Tax

California: Pass Through Entity Elective Tax

Governor Newsom signed California Assembly Bill 150 into law on July 16, 2021. This new law allows certain pass-through entities to annually elect to pay an elective tax in the amount of 9.3% of the pro rata share or distributive share of the entity’s partners, shareholders, or members. The partners, shareholders and members then receive a tax credit equal to that amount. The law is effective for taxable years beginning on or after January 1, 2021, and before January 1, 2026.

The pass-through entities that can elect to pay this tax are S corporations, general partnerships, limited liability companies taxed as partnerships, limited liability partnerships or limited partnerships. To qualify to make this election, the pass-through entity’s owners must consist solely of individuals, fiduciaries, trusts, estates or entities taxable as corporations. The pass-through entity cannot have a partnership as an owner, cannot be a publicly traded partnership, and the pass-through entity cannot be permitted or required to be in a combined reporting group.

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California Sales And Use Tax Audit Tips

California Sales And Use Tax Audit Tips

The state of California has the highest state sales tax rate at 7.25%, and the eighth-highest average combined state and local tax rate at 8.68%, according to the Tax Foundation. This means sales tax mistakes in The Golden State are typically going to be much more costly than those made in others. Therefore, if you are audited, you want to ensure that you are prepared.

Why You Might be Under Audit

Generally, a state has a system for how they select taxpayers for a Sales and Use tax audit. This can be triggered by many different reasons such as having a large presence in the state, amending returns, making late filings and payments, or even red flags auditors identified when they came across your business while auditing one of your suppliers or customers.

It is important to understand why your company may be under a Sales and Use tax audit. If you can understand why, it can help you have a clearer understanding of what the auditor is expecting from you during the time of your audit.

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Tax Implications Of California’s Vax For The Win Program

Tax Implications Of California's Vax For The Win Program

On May 27, 2021, California Governor Newsom’s “Vax for the Win” program with awards to vaccinated and to be vaccinated Californians provides:

  • $1.5 million to each of 10 individuals
  • $50,000 cash prize for 30 individuals
  • $50 gift cards to the first 2 million individuals vaccinated on or after May 27; prize not awarded until vaccination series is completed.

The total cost is $116.5 million.

So, what are the tax consequences?

Accession to wealth, clearly realized so taxable (§61, §74, and Glenshaw Glass, 345 US 426 (1955)) unless an exclusion applies.

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Senior Tax Manager – International (Sunnyvale, CA)

Senior Tax Manager - International (Sunnyvale, CA)

TaxConnections has been retained to conduct a search for a Senior Tax Manager – International for a global technology company headquartered in Silicon Valley, CA. .This position is responsible for providing international tax guidance for U.S. compliance and reporting; managing Americas region income tax compliance and related issues.

Responsibilities include:Review/provide technical guidance for international portion of company’s income tax return including Forms 8858, 5471, and 1118, GILTI, FDII, Subpart F and FTCs, as needed; Prepare/provide technical guidance for §861/other expense allocations for FDII benefit and foreign tax credits; Co-ordinate and manage review and approval of the international portion of Company’s U.S. tax return by external service providers, including technical analysis and discussion of issues raised; Research relevant international tax matters, new proposed and final regulations, tax law updates, and provide guidance for tax compliance and reporting; Prepare and manage U.S. tax return disclosures for international issues and transactions; Provide technical guidance to international compliance team for quarterly and year-end reporting. Review calculations for technical accuracy; Manage, supervise and train team member supporting international provision in direct tax hub offshore; Coordinate with Finance shared services centers, GL accounting, revenue and other teams on various international tax issues and more.

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Senior Tax Manager- International (San Jose, CA)

Senior Tax Manager- International (San Jose, CA)

TaxConnections has been retained to conduct a search for a Senior Tax Manager – International for a global technology company headquartered in Silicon Valley, CA. .This position is responsible for providing international tax guidance for U.S. compliance and reporting; managing Americas region income tax compliance and related issues.

Responsibilities include:Review/provide technical guidance for international portion of company’s income tax return including Forms 8858, 5471, and 1118, GILTI, FDII, Subpart F and FTCs, as needed; Prepare/provide technical guidance for §861/other expense allocations for FDII benefit and foreign tax credits; Co-ordinate and manage review and approval of the international portion of Company’s U.S. tax return by external service providers, including technical analysis and discussion of issues raised; Research relevant international tax matters, new proposed and final regulations, tax law updates, and provide guidance for tax compliance and reporting; Prepare and manage U.S. tax return disclosures for international issues and transactions; Provide technical guidance to international compliance team for quarterly and year-end reporting. Review calculations for technical accuracy; Manage, supervise and train team member supporting international provision in direct tax hub offshore; Coordinate with Finance shared services centers, GL accounting, revenue and other teams on various international tax issues and more.

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Tax Manager – Investments (San Francisco, CA)

Tax Manager - Research And Planning (San Francisco, CA)

The top driver that keeps tax professionals in an organization longer is how they are treated by management. Our client has an extraordinary retention rate due to the fact they treat their tax team with a high degree of respect and support you in ways you rarely experience in companies.

TaxConnections has been retained by an investment group to locate a Tax Manager in San Francisco, CA. It is an opportunity of a lifetime for a tax professional with the requisite skills.

The Tax Manger will be responsible for assisting senior tax management with tax research and planning and all aspects of the tax compliance and forecasting for a very significant investment partnership and the related investment management entity. Individual must have a solid understanding of current tax laws including knowledge of investment partnership structures. Researching and communicating the tax consequences of current and proposed investments will be a part of the responsibilities of the successful candidate.

In addition, the position will require both the preparation and review of highly detailed complex Federal, California and multi-state income tax returns, foreign investment reporting implications, preparation of tax forecasts and researching complex tax issues.
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Senior Tax Manager – International (Sunnyvale, CA)

Senior Tax Manager-International, Sunnyvale, California

TaxConnections has been retained to conduct a search for a Senior Tax Manager – International for a global technology company headquartered in Silicon Valley, CA. .This position is responsible for providing international tax guidance for U.S. compliance and reporting; managing Americas region income tax compliance and related issues. The ideal individual will also be highly versed in US/Canadian and US/Mexican operations although our client is in more than 100 countries worldwide.

Responsibilities include:Review/provide technical guidance for international portion of company’s income tax return including Forms 8858, 5471, and 1118, GILTI, FDII, Subpart F and FTCs, as needed; Prepare/provide technical guidance for §861/other expense allocations for FDII benefit and foreign tax credits; Co-ordinate and manage review and approval of the international portion of Company’s U.S. tax return by external service providers, including technical analysis and discussion of issues raised; Research relevant international tax matters, new proposed and final regulations, tax law updates, and provide guidance for tax compliance and reporting; Prepare and manage U.S. tax return disclosures for international issues and transactions; Provide technical guidance to international compliance team for quarterly and year-end reporting. Review calculations for technical accuracy; Manage, supervise and train team member supporting international provision in direct tax hub offshore; Coordinate with Finance shared services centers, GL accounting, revenue and other teams on various international tax issues and more.

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California Department Of Tax Fee Administration Amends its “Collection of Use” Tax Regulation (Part 2)

California Department Of Tax Fee Administration Amends its “Collection of Use” Tax Regulation (Part 2)

If you’ve been following along with our blogs, you know that we talked about some new amendments taking place under California Sales and Use Tax Regulation 1684, “Collection of Use Tax by Retailers”. In the first part of our blog, we discussed how California implemented on April 1, 2019 an economic nexus threshold for retailers in addition to the longstanding physical nexus threshold. The State now requires out of state sellers to register and collect use tax in California as soon as they exceed $500,000 of sales of tangible personal property in either the preceding or current calendar year.

In the first blog we focused on three examples from the amended regulation for when economic nexus would be triggered for an out-of-state retailer. In this second part of the blog we will talk about the circumstances that will allow out-of-state retailers to discontinue their obligation to collect and report use tax to California. In other words, when will California no longer require an out-of-state retailer to hold a Certificate of Registration – Use Tax and to collect and report use tax?
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Tax Manager – Investment Partnerships (San Francisco, CA)

Tax Manager - Investment Partnerships (San Francisco Bay Area)

TaxConnections has been retained by an investment group to locate a Tax Manager in the San Francisco Bay Area. The Tax Manger will be responsible for assisting senior tax management with tax research and planning and all aspects of the tax compliance and forecasting for a very significant investment partnership and the related investment management entity. Individual must have a solid understanding of current tax laws including knowledge of investment partnership structures. Researching and communicating the tax consequences of current and proposed investments will be a part of the responsibilities of the successful candidate.

In addition, the position will require both the preparation and review of highly detailed complex Federal, California and multi-state income tax returns, foreign investment reporting implications, preparation of tax forecasts and researching complex tax issues.

The Tax Manager must be able to perform multiple tasks, have proven project management skills and produce high quality, accurate and detailed work on a timely basis. Also, must be able to timely identify and communicate issues, positions, and opportunities both orally and in writing to management.
Responsibilities include the following:
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AB 5 Alternative Or How Business Owners Can Better Spend $800 Per Year

AB 5 Rules

In September 2019, California enacted a new worker classification approach called the ABC test (AB 5 – see Oct 2019 post). Basically, AB 5 starts with the presumption that all workers are employees rather than independent contractors (unless they work for the State of California which is exempt from many state labor laws). If A, B and C of the law are met, the worker is a contractor.  If A, B and C are not met, the parties need to see if any of about 50 exemptions apply and if yes, then apply the pre-AB 5 classification system which primarily looks at factors to determine if the employer has the right to control the manner and means of how the worker does his/her work.

While one goal was to be sure workers are not disadvantaged by some employers who may pay low amounts, I believe the law has far more disadvantages than advantages, there were definitely better and more modern ways to improve the law, and there are a lot of new complexities and confusion.  The new legislative year also started with over 25 proposals to add more exemptions and clarifications or even to repeal AB 5.

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How To Navigate The California Manufacturing Partial Sales And Use Tax Exemption

MONIKA MILES

The California Manufacturing Partial Sales and Use Tax Exemption, which went into effect July 1, 2014, allows certain manufacturers and biotech companies to exempt a portion of sales and use tax on purchases of qualified equipment used in manufacturing and R&D (research and development). While it’s been around for a few years, it’s still a viable benefit for companies purchasing equipment.

How To Take Advantage Of The California Manufacturing Partial Sales And Use Tax Exemption
Qualifications

To qualify, you need to meet the following criteria:

  • Be engaged in certain types of business primarily engaged (50 percent or more of the time) in those lines of business described in the NAICS Codes for:
    • Manufacturing (311100-339999)
    • R&D in biotechnology (541711)
    • R&D in the physical, engineering and life sciences (541712)
    • Generation and production, or storage and distribution of electric power (22111-221118, 221122)

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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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