Current Tax Trends and Developments at the Hartman SALT Conference

SALT Report 1185 – The 18th annual Professor Paul J. Hartman Memorial State and Local Tax Forum took place October 25–27 in Nashville, Tennessee. The annual conference addresses developments and trends with regard to state and local taxation. The forum focused on sales and use taxes in regards to their impact on the state tax arena along with various nexus issues.

State and Local Tax Topics

Combined reporting and apportionment issues were discussed throughout the forum. One session specifically, discussed how many states believe that combined reporting will eliminate the ability of taxpayers to “game the system” and addressed some of the problems that may arise with combined reporting.

Developments in Sales & Use Tax

A session on e-commerce sellers, nexus, and “Amazon” laws touched upon whether Quill, 504 U.S. 298 (1992), is vulnerable in light of pending federal legislation, and whether the element of an out-of-state server farm should factor into the click-through nexus analysis. Also discussed was whether Congress will or should legislate away Quill with a monetary threshold in place of physical presence.

A Streamlined Sales Tax forum discussed the small number of certified service providers despite the large number of small sellers, and examined the viability of the business model involving large sellers collecting and remitting tax on behalf of the small sellers they host, such as Apple’s app store or Barnes & Noble.  Also, on the topic of remote sellers, the Deputy Director of the Multistate Tax Commission stated that any vote the MTC might take on a proposed model uniform notice and reporting statute for remote sellers will remain on hold until July 2012, though the issue will be discussed at the MTC’s upcoming meeting this December.

A session on cloud computing and the taxation of digital goods and services where software is remotely accessed noted that many states are attempting to tax these models under antiquated definitions. The session also touched upon whether allocation of the tax base might be a solution to provide uniformity.

Finally, the trend of states offering an amnesty program when they face a deficit was noted, as was the trend of states (such as Georgia) looking into the possibility of adding an independent tax tribunal.

For Further Information:

Professor Paul J. Hartman Memorial State and Local Tax Forum