On Sept. 30, 2021, the Massachusetts legislature enacted an elective pass-through entity (PTE) tax. The PTE tax is intended to enable Massachusetts taxpayers that are PTE owners to deduct state and local (SALT) taxes exceeding the annual $10,000 deduction limitation ($5,000 for married individuals filing separately) for federal income tax purposes.
Topics: Massachusetts, tax, pass-through entities, PTE
The Tax Cuts and Jobs Act (TCJA) of 2017 caught many states off guard. The speed at which the federal legislation moved did not allow much time for states to react before the calendar year 2017 ended and the 2018 calendar year began, particularly related to the creation of the "so-called" SALT cap.
Topics: pass-through, pass-through entities, PTE
On April 19, 2021, New York Governor Andrew Cuomo signed the FY2022 New York State (NYS) budget bill (“the Bill”)(S.2509-C/A.3009-C). which among other items, includes various temporary tax increases and provisions affecting certain individuals, pass-through entities, and corporations operating in the state. Below is a recap of the most significant tax provisions included in the comprehensive budget legislation.
Topics: Cuomo’s Budget Proposal, New York Tax Reform, New York, Cuomo's Budget Bill
On April 7, the Virginia Department of Taxation announced that certain corporations subject to Virginia state income tax must file a one-time report by July 1, 2021. Corporate taxpayers that fail to file the report timely, or make a material misstatement or omission, may be subject to a $10,000 penalty. The purpose of the report is to show the difference between the amount of tax the corporation would pay if it filed as part of a unitary combined group and the amount of the corporation’s tax based on the current filing requirements.
Topics: reporting requirements, Virginia, Virginia Department of Taxation
The Paycheck Protection Program (PPP) created by the Coronavirus Aid, Relief, and Economic Security (CARES) Act and extended by the December 2020 year-end appropriations bill provides a direct incentive for small businesses to keep their workers on payroll. It is backed by the Small Business Administration (SBA) and provides potentially forgivable, low-interest loans for small to medium-sized organizations who can demonstrate expenses were used toward retaining their headcount.
Topics: Independent Contractor, COVID19, Coronavirus, Coronavirus Aid, Relief, and Economic Security Act, PPP Loan, Small Business Administration, PPP Loan Forgiveness, Payment Protection Program
On June 21, 2018, the U.S. Supreme Court ruled in favor of South Dakota in the widely-watched South Dakota v. Wayfair case. This ruling overturned the long-held precedent of Quill Corp. v. North Dakota, which stood for the proposition that a state could not impose a collection requirement on a retailer unless that retailer had a physical presence in the state.
Topics: economic nexus, Sales Tax, The Massachusetts Department of Revenue, sales and use tax, tax nexus, new england state and local tax, Wayfair, South Dakota vs Wayfair, Rhode Island Department of Revenue
In June, the Supreme Court ruled that a taxpayer’s economic activity could be used as the standard for whether a taxpayer owes state and local taxes. The decision in Wayfair v. South Dakota opened the door for states to collect sales taxes on remote retailers with substantial in-state activity. Prior to the decision, states followed the physical presence standard to determine whether a taxpayer would be subject to state and local taxes.
Topics: economic nexus, Sales Tax, The Massachusetts Department of Revenue, sales and use tax, tax nexus, new england state and local tax, Wayfair, South Dakota vs Wayfair, Rhode Island Department of Revenue
In the aftermath of the Wayfair Supreme Court decision, Massachusetts recently released additional information about its sales tax policy for remote vendors. The Technical Information Release 18-8, Tax Jurisdiction Over Internet Vendors Prior to and Subsequent to Wayfair, Inc. v. South Dakota (TIR 18-8) clarifies the state Department of Revenue’s position on the types of activities that would require an out-of-state business to collect and remit sales tax in Massachusetts.
Topics: Massachusetts, economic nexus, Sales Tax, sales and use tax, nexus, Wayfair, South Dakota vs Wayfair, remove vendors
The recently enacted tax reform legislation represents the most significant change to federal tax law since 1986. But while much of the focus has been on the direct effect of the new federal provisions, there are major indirect implications for state income taxes as well.
Topics: Taxes, Massachuetts, Tax Cuts and Jobs Act, TCJA
Roughly 90,000 taxpayers in Rhode Island have a significant tax relief opportunity available to them. That’s the estimated number of taxpayers who owe the state taxes, and Rhode Island is offering a tax amnesty period to assist taxpayers with becoming compliant.
Topics: Tax amnesty program, Rhode Island, Overdue taxes
