The State and Local Tax Burden of Inc. 500 Companies

What is the greatest state and local tax expense of Inc. 500 companies? 

Sales and use tax

Property taxes

Payroll taxes

Income taxes

Franchise taxes

The answer may vary by company and industry, but regardless, state and local taxes can be a burden on a start-up company or mid-size company trying to grow. 

Each company as it adds employees, expands across state borders, acquires equipment and facilities, hires sales people, sells goods, services or software over the Internet, etc. creates more state and local tax obligations.  The liabilities can grow out of control without proper oversight and focus.  The "right size" or "right amount" of resources focused on a company's state and local tax burden can make all the difference.

What is your company currently experiencing?  What tax is holding your company down like an anchor?

What tax would you eliminate if you could? 

Rhode Island Tax Amnesty Program Begins September 2, 2012!

The Rhode Island Division of Taxation is offering a Tax Amnesty program which will allow certain taxpayers to pay the full amount of overdue taxes plus 75% of any interest due, without having to pay the remaining interest and any penalty amounts due, and without being subject to any other civil or criminal penalties.

Rhode Island's Tax Amnesty Program will run from September 2, 2012 through November 15, 2012 and applies to taxes that were due on or before December 31, 2011. The amnesty includes 2011 Rhode Island personal income tax returns, which were due April 17, 2012.

Rhode Island's Tax Amnesty program includes, but is not limited to, the following types of taxes:

Corporate income tax

Estate tax

Fiduciary income tax

Personal income tax

Sales tax

Use tax

Cigarette and tobacco products taxes

Employer taxes - unemployment, temporary disability insurance

Some exclusions to the Tax Amnesty program are:

Taxpayers facing criminal investigation are not eligible for tax amnesty.

Taxpayers party to any civil or criminal proceeding pending in any court of the United States or the State of Rhode Island, for fraud in relation to any State tax imposed by the laws of the State and collected by the Tax Administrator.

If a taxpayer is eligible for tax amnesty, a payment plan may be set up. However, the full amount of the tax and 75% of any interest due must be paid no later than December 14, 2012.

For more info, go to Rhode Island Tax Amnesty.

RESET BUTTON - Do You Have One?

I like mornings because it feels like a new beginning, an opportunity to do something new or to make up for yesterday's mistakes.  It can be a fresh start, or for lack of a better term, a "reset button."

In life we all make mistakes and don't always handle every situation in the best manner.  The same can be said for our lives at work.  During your career, I'm sure you have said or done something that you regret.  The next day allows you to think about it more clearly, gain a fresh perspective, lose the emotion (which usually helps), and try to correct or soften the situation. 

In the state tax world, a company can often use a "reset button" to gain control of their state and local tax positions.  Why?  Well, whether the company is large or small, it probably has expanded its activities in multiple states either organically or via acquisition.  When this happens, nexus may be created or changed, income tax and sales and use tax filing obligations may change, apportionment methods may not be applied in the most beneficial manner, and the organization structure may have grown to the point that it is not producing a state tax-efficient result.  This is when a "reset button" can be helpful.

In the context of state tax consulting, that "reset button" could be presented as a lookback review or reverse audit in which the company itself, or an outside firm reviews a company's business activities, returns, records, structure, etc. to identify opportunities and issues, and provide positive resolutions or remediation.  At the end of the review, the company should be operating in a structure that is not only tax-efficient but also aligns with the company's business.  The company should also be meeting its state and local tax obligations in a tax-efficient manner.  Hence, the company should be "reset" to not only remediate any prior issues, but place the company in a great position prospectively.

Does your company need a "reset button"?

Enjoy your day and take advantage of your daily "reset."

20 Years and Counting: IT GOES FAST!!

Today is my 20th wedding anniversary.  I can hardly believe it.  I know, I don't look like I could be married for 20 years, but yes it is true.

We got married when we were 19 years old and a lot has happened over the years including: college, career, kids, 9 moves, and the death of family members, in particular my dad.  My dad died 4 years ago from lung cancer.  He never smoked a day in his life.  The doctors said it was from second hand smoke.  Hence, I am a very strong advocate for not smoking.  It not only kills you, but it could kill your loved ones and innocent bystanders.  Sorry for changing the subject from my anniversary to my dad, but this day also makes me think of him.  I miss him so much.

As for my anniversary, my wife and I have been extremely blessed over the years.  Regardless of where we have been, what we have accomplished, etc., the favorite part is that I was with her.  She is my best friend.  There is no one else I would rather spend time with.

On this day, I hope you have someone to share your life with.  Someone you would rather spend time with than anyone else.  It makes the great times better and the not so great times, still good. 

In this field of state and local taxes and public accounting, it often feels like family isn't first.  In my mind, family will always be first.  My wife and kids are the most important thing to me. 

Succeed and achieve, but please keep your priorities straight! 

The last words my dad said to me was:  focus on the right things (family and God), because IT GOES FAST!

Texas "Fresh Start" Amnesty Program Ends August 17, 2012 - What Should You Do?

The Texas "Fresh Start" Amnesty Program ends August 17, 2012.  Should you take advantage of it? 

Before you do, please review all of the qualifications and determine what the potential impact will be (past, present and future).  A Voluntary Disclosure Agreement may be a better option.

THE DETAILS

The program applies to reports originally due before April 1, 2012, but does not apply to underpaid tax returns (i.e., reported but not paid) or filing periods that are under audit.

For taxpayers that participate in the amnesty program and pay the full amount of tax due, the Comptroller will waive penalies and interest.

The program applies to all state and local taxes and fees administered by the Comptroller (i.e., sales and use taxes, franchise tax, insurance tax, local-option taxes, fuels tax, etc.) except for Public Utility Commission gross receipts assessment.  Amnesty does not apply to the sports and community venue tax and property taxes.

LOOK BEFORE YOU LEAP

Please take note that the amnesty program does not limit the lookback period.  Hence, returns will be required for all unfiled prior years where the taxpayer has nexus or a filing obligation.  This is in contrast to using a Voluntary Disclosure Agreement (VDA) or program.  Under a VDA, the lookback period is limited usually to the most recent three or four tax years.

For more information on the amnesty program, go to Texas Fresh Start.

For more information on Texas Voluntary Disclosure Agreements go to Texas VDA.