50-State Tax Legislative Update Beth Cooley Council On State - - PDF document

4/22/2009 1

50-State Tax Legislative Update

Council On State Taxation Beth Cooley Council On State Taxation (COST) Albuquerque, New Mexico New Mexico Tax Research Institute April 30th, 2009

• The Good & Bad News
• State Budgets
• State Taxation Trends

– Combined Reporting – Internet Nexus – Amnesties – “Other”

Council On State Taxation

Outline

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Projected Budget Gaps: FY 2009

As a Percentage of General Fund Budget

AK HI ME RI VT NH NY CT PA NJ MD DC DE VA WV NC SC GA FL IL OH IN MI WI KY TN AL MS AR LA TX OK MO KS IA MN ND SD NE NM AZ CO UT WY MT WA OR ID NV CA

Key: More than 15% of the state’s general fund 10% to 15% of the state’s general fund Less than 10% of the state’s general fund Not applicable

MA

Council On State Taxation

Source: National Conference of State Legislatures “Update On State Budget Gaps: FY 2009 & FY 2010,” Jan. 30 2009

Projected Budget Gaps: FY 2010

As a Percentage of General Fund Budget

AK HI ME RI VT NH NY CT PA NJ MD DC DE VA WV NC SC GA FL IL OH IN MI WI KY TN AL MS AR LA TX OK MO KS IA MN ND SD NE NM AZ CO UT WY MT WA OR ID NV CA

Key: More than 15% of the state’s general fund 10% to 15% of the state’s general fund Less than 10% of the state’s general fund Not applicable

MA

Council On State Taxation

Source: National Conference of State Legislatures “Update On State Budget Gaps: FY 2009 & FY 2010,” Jan. 30 2009

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Combined Reporting: April 2009

AK HI ME RI VT NH NY CT PA NJ MD DC DE VA WV NC SC GA FL IL OH IN MI WI KY TN AL MS AR LA TX OK MO KS IA MN ND SD NE NM AZ CO UT WY MT WA OR ID NV CA

Key No corporate income tax Mandatory unitarycombined reporting Combined reporting – not on a unitary basis – “substantial intercorporate transactions” Provide for combined filing, but taxes are in the form of gross receipts or other hybrid taxes Pending combined reporting legislation in 2009

MA

Council On State Taxation

• – Alabama

– Connecticut – Florida – Louisiana – Maryland (dead for 2009) – North Carolina – Tennessee (likely dead for 2009) – Rhode Island Council On State Taxation

Prediction: Combined Reporting 2009 & Beyond

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Addback Statutes

Council On State Taxation

• Arkansas
• DC
• Pennsylvania
• Oregon
• West Virginia

Internet Nexus: New York “Starts Spreading The News”

• New York: 2008 Budget
• Proposals To-Date:

– California – Connecticut – Hawaii – Illinois (by regulation) – Maryland (dead for 2009, likely to resurface 2010) – Minnesota – North Carolina (pending introduction) – Tennessee (likely dead) Council On State Taxation

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Amnesties

• Arizona
• Louisiana*
• Maryland
• New Jersey
• New Mexico
• Vermont
• Virginia

Council On State Taxation

“Other”

• Sales Tax Base Expansion (Exemption

Review/Eliminations)

– FL, PA, SC

• Tax Commissions

– AR, CA, MN, RI, SC

• Vendor Compensation

– CO, IL, TX, VA

• Alternative Base Taxes

Council On State Taxation

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Questions?

Beth Cooley 202.484.5226 bcooley@cost.org

Council On State Taxation