2019 Year-End Tax Guide

THE MARCUM 2019 YEAR-END TAX GUIDE | www.marcumllp.com

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MAJOR STATE UPDATES California

New York In January, New York published taxpayer guidance on the Wayfair decision. New York decided to begin to enforce its sales tax economic nexus rule, which was already law but not enforced. The original New York threshold for sales tax economic nexus was $300,000 of sales of tangible personal property and 100 transactions. New York subsequently increased the sales threshold to $500,000, but kept the 100 transactions requirement in place. On April 12, the New York State Budget Bill (S01509) was officially signed. The bill included changes, such as the adoption of a marketplace facilitator law for sales tax (defined below) and conformity to the federal treatment of global intangible low taxed income (GILTI)(as defined within the Tax Cut and Jobs Act), for income tax purposes. Oregon On May 16, Governor Kate Brown signed House Bill 3427, establishing Oregon’s Corporate Activity Tax (CAT). Effective January 1, 2020, Oregon’s CAT will be imposed on all business entities and individuals with substantial nexus in Oregon. Substantial nexus is defined by a physical presence in the state, being authorized to do business in the state, or exceeding the bright-line factor amounts. The bright-line factor presence standard is met if a taxpayer exceeds $50,000 of property; $50,000 of payroll; or $750,000 of sales. TCJA CONFORMITY Since the passage of the Tax Cuts and Jobs Act (“TCJA”) in 2017, states have begun releasing more guidance regarding conformity to the federal law.

Effective April 1, an economic nexus provision in related to sales tax was established, with a threshold of $500,000. Beginning October 1, a marketplace facilitator law took effect. Florida On June 28, House Bill 7127 was signed by Governor Ron Desantis. The bill requires Florida corporate income taxpayers to supply additional information to the Florida Department of Revenue. Details of the required submissions were supplied to each filer. The additional information is required to be uploaded to a Florida Department of Revenue site separate from the income tax filings. (Due to Hurricane Dorian, the submission date was extended to October 27, 2019.) Illinois On June 5, 2019, Illinois Governor Pritzker signed Public Act 101-0009 which updates the existing language regarding the state’s current manufacturing and Assembly Sales and Use Tax Exemption. On August 26, 2019, Illinois established a 30 day threshold for non-resident taxability. Effectively, a non-resident earning compensation from services in Illinois is only taxable if they exceed 30 days in the state during the tax year. This is effective for tax years starting after December 31, 2020. Nevada As of June 13, pursuant to Senate Bill 497, Nevada updated its Commerce Tax Filing requirements, eliminating the need for taxpayers with less than $4 million in Nevada-sourced gross receipts to file.

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