This article originally appeared in Law360 and is reprinted with permission.
The New Year is in full swing here at “NY Tax Minutes,” and we’re sticking with our resolution to deliver all the month’s New York City and state tax news in a way that’s made for New Yorkers. Fast.
This article originally appeared in Law360 and is reprinted with permission.
Much of the fanfare around last year’s federal tax reform was around the special 20% deduction applicable to income from flow-through entities like partnerships, S corporations and LLCs under IRC § 199A. But the new law generated more questions than answers, requiring the IRS to issue new regulations to help taxpayers and practitioners sort through all the details. Just recently, the IRS issued final regulations, and they came with some bad news for owners of your favorite sports team. Specifically, the new regulations confirm that sports team ownership falls within the definition of “athletics” and, therefore, is a disqualified activity, meaning team owners generally will be unable to qualify for the 20% deduction with respect to income generated from the team. In this post, we’ll explain what all the fuss is about.
On January 15th, Governor Cuomo released the FY 2020 Executive Budget, which is available here. The highlights of certain proposed revenue provisions are summarized below. Keep an eye out for further updates in mid-February when the “thirty-day amendments” to the Executive Budget will be out.
New York is one of the most, if not the most, aggressive states when it comes to tax enforcement. That’s why it was a bit confusing when the New York State Department of Taxation and Finance (the “Tax Department”) remained uncharacteristically silent following the landmark Supreme Court decision in South Dakota v. Wayfair. But that’s finally changed! On January 15, 2019, the Tax Department issued a Notice explaining its position on economic nexus for sales tax purposes. In this article, we’ll (1) provide a brief review of how the Wayfair case changed tax administration, (2) discuss New York’s new guidance, and (3) address some of the potential issues that are likely to arise as a result of this new guidance.
This article originally appeared in Law360 and is reprinted with permission.
It’s a new year here at “NY Tax Minutes,” but don’t worry, we’re still delivering all the month’s New York City and state tax news in a way that’s made for New Yorkers. Fast. But as we close the books on 2018 and look ahead to another year of tax updates, we’re adding a new wrinkle to this month’s column. We’re pulling out our crystal balls and predicting whether the news that brought 2018 to a close will continue into the New Year or whether we can turn the clock on these issues.
As the calendar flipped to 2019, we’ve seen continued activity in states looking to find some way to combat the loss of SALT deduction to “help” its in-state taxpayers. The Tax Cuts & Jobs Act (“TCJA”) (P.L. 115-97) capped the individual state and local tax deduction at $10,000 per year beginning January 1, 2018, making it even harder for folks in high-tax states to stomach the payment of state and local taxes. To alleviate this burden, various states have offered up a myriad of “workarounds” usually in form of charitable contributions or new taxes designed to shift the tax burden from individuals (whose SALT deductions are capped) to businesses (which face no such cap). As we move into a New Year, let’s examine some of the recent developments.
This promises to be the most “exciting” tax season ever for your friendly neighborhood accountants! It makes me a little relieved that I declined to follow in the footsteps of my father and grandfather (both CPAs) and turned to the legal world instead! With so many changes in the federal tax law, it’s going to be tough for accountants (and software companies) to keep up. And because most states’ tax laws are based on federal law or use federal tax rules as a starting point, so many of these federal changes will flow-through to state tax returns as well.
This article originally appeared in Law360 and is reprinted with permission.
We’re back with the fifth installment of “NY Tax Minutes.” And once again, we’re delivering all the month’s New York City and state tax news in a way that’s made for New Yorkers. Fast.
Earlier this month, those who oppose the SALT cap must have been pleased to see the results in the mid-term elections. With Democrats taking over the house, there’s already talk (here and here) that the next Congress will take aim at the cap. But quietly, on the other side of the battle lines, shots were fired by the federal government, as attorneys for the United States Department of Treasury and IRS filed a Motion to Dismiss the Complaint in State of New York, State of Connecticut, State of Maryland, and State of New Jersey v. United States Department of Treasury, The Internal Revenue Service and The United States of America, 18-cv-6427 on November 2 as noted here in the corresponding Memorandum of Law Supporting the Government’s Motion to Dismiss.
South Dakota Governor Dennis Daugaard and State Attorney General Marty Jackley announced on October 31, 2018 that the State of South Dakota has entered into a settlement agreement and stipulation of dismissal resolving all issues that had remained in the landmark Wayfair case. The settlement agreement and stipulation of dismissal were made with Wayfair Inc. and its co-litigants, Overstock.com Inc. and Newegg Inc., to resolve all remaining issues in South Dakota v. Wayfair Inc. State circuit court must still give its final approval to the settlement agreement reached by the parties and to the dismissal of both cases.