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Avoiding State Income Tax Nexus and Apportionment Surprises

4.6 (57)

Jack Schmoll, CPA

Schmoll CPA PLLC

Monday, May 25, 2020 | 04:00 PM EDT

  • CPA
  • EA

1 Credit

FREE

Subject Area

Taxes

Upcoming Webinars

Course Description

As states scramble to increase revenues, out-of-state businesses are an easy target. States are being more aggressive in imposing nexus and in calculating how much of a business’s income is taxable. For years states have been trying to find ways to force businesses to collect sales tax as well as pay gross receipts, franchise, and income taxes. Because of the US Supreme Court’s position if South Dakota v. Wayfair, we have seen dramatic changes in how nexus is established for sales tax with the imposition of economic thresholds. Many states have been using similar thresholds for years in imposing income tax nexus and that number of states is increasing.

In addition to expanded income tax nexus, states are adjusting apportionment formulas to increase the portion of out-of-state business income that is taxable. Because various states use different formulas businesses can end up paying state tax on more than 100% of their income. Additionally, throwback and throw out rules can create unexpected tax burdens. Since states are expanding their taxing jurisdictions and power, it’s vital to advise your company or clients on the delicate issues of nexus. This seminar will help you to determine when a company must pay income taxes. This webinar will focus on making you aware of the current Income tax nexus and apportionment environment, how to avoid surprises, and what to expect in the future.

Learning Objectives

  • Understand how to properly assign service sales using the market based or the cost-of-performance/income-producing-activity approachs.
  • Understand how throwout and throw back requirement impact your apportioment calculation.
  • Understand the processes used to identify income that would be allocated versus apportioned.
  • Understand the interplay between physical presence nexus and economic nexus.
  • Understand Public Law 86-272 nexus protections and the limits of that protection.

Who Should Attend?

  • CPA - Large Firm
  • CPA - Mid Size Firm
  • CPA - Small Firm
  • CPA in Business
  • Enrolled Agent
  • Entrepreneurial CPA
  • Tax Firm
  • Tax Pros
  • Young CPA

Testimonial

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4.6

(57)
74%
19%
5%
2%
0%