Multi-state – 2016 CFO State Tax Survey

www.cfo.com – May 4, 2016  by Edward Teach

“From a tax perspective, the 50 states are in better shape today than they were before the Great Recession. Adjusted for inflation, they collected 5.6% more tax revenue in mid-2015 than at the peak in the third quarter of 2008, according to the Pew Charitable Trusts.

But the recovery has been uneven. More than 20 states still collect less tax revenue than they did at their prerecession peaks, says Pew, as economic conditions vary widely across the country. Meanwhile, a number of states face serious long-term fiscal challenges in the form of debt and unfunded retirement costs.

As a result, states are increasingly reaching beyond their borders for more tax revenue. Some have enacted nexus rules to levy income taxes on out-of-state companies with a significant economic presence, but no physical presence, in their states. Others are widening the notion of physical presence to collect sales tax from remote sellers through “click-through nexus.”

Many states now have sales-only apportionment formulas, hoping to shift some of the tax burden from in-state businesses to out-of-state companies and encourage more investment within their borders. And an increasing number of states are taxing companies’ service revenue based on where their customers benefit from the service…”

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