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Presented by:Presented by:
State and Local Taxation of Banks and Financial Institutions
Presented by:
Notice
The following information is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.
Presented by:
Presenters
Walter Doggett – E*TRADE Financial Corporation Dan McGuire – KPMG, LLP Tysons Corner Dave Turzewski – KPMG, LLP New York Tracy Graham – KPMG, LLP Charlotte
Presented by:
Agenda
State of the states
Apportionment
New York state and city legislation
MTC litigation update
Other developments
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STATE OF THE STATES
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State Revenues – Total Taxes
Source: Federation of Tax Administrators.
‐20
‐15
‐10
‐5
0
5
10
15
20
Year over year percentage change on a monthly basis –September 2000 through July 2015
Percentage Change
Presented by:
State Spending Growth
35%
27%
19%
9%
7%
General Fund Expenditures, Fiscal 2014
All Other Medicaid Higher Education
Corrections Public Assistance 1.4% Transportation 0.9%Source: National Association of State Budget Officers
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Tax Amnesty Programs
No 2015‐16 amnesty in place
Amnesty program
SC: Not yet specified
OK: 9/14/2015 – 11/13/2015AZ: 9/1/2015 – 10/31/2015
IN: 9/15/2015 – 11/16/2015
MD: 9/1/2015 –10/30/2015
MA: Not yet specified
MO: 9/1/2015 – 11/30/2015KS: 9/1/2015 ‐ 10/15/2015
AL: Not yet specified
NH: 12/1/2015 – 2/15/2016
Source: KPMG, LLP
Presented by:
State Amnesty Program Information
Jurisdiction Penaltiesabated?
Interest abated? Amnesty Period Applies to Taxes Due and Payable
forForfeit appeal
rights?Applies to outstanding
assessments?
AL Yes 50%
Dates not set, but two months no
later than 8/31/2016
Tax due prior to January 1, 2015, or taxes for taxable periods that began before January 1, 2015
Yes No
AZ Yes Yes 9/1/2015 ‐10/31/2015
Annual filers: Tax periods ending before 1/1/14
Other filers: Tax periods ending before 2/1/2015
Yes Yes
IN Yes Yes 9/15/2015 ‐11/16/2015
Tax periods ending before1/1/2013 Yes Not specified
KS Yes Yes 9/1/2015 ‐10/15/2015
Tax periods ending on or before 12/31/2013 Yes No
MD Yes 50% waived 9/1/2015 ‐10/30/2015 Returns due before 12/31/2014 No Yes
MA Yes NoDates not set, but will expire no later than 6/30/2016
Tax periods beginning before 1/1/2014 Not specified Not specified
MO Yes Yes 9/1/2015 ‐11/30/2015
Returns due on or before12/31/2014 Yes Yes
NH Yes 50% 12/1/2015 –2/15/2016
Tax due and unpaid on or before February 15, 2016 Not specified Yes
OK Yes Yes 9/14/2015 ‐11/13/2015
Tax periods ending before 1/1/2015 Not specified Not specified
SC Yes Yes Not yet specified Not yet specified No Yes
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Combined Reporting (2003)
Combined Reporting Required (AK, HI)
Separate Return States
No Corporate Income Tax
Source: KPMG, LLP
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Combined Reporting for Corporate Income Tax Purposes (2015)
Combined Reporting Required (AK, HI, DC)
Separate Return States
No Corporate Income Tax
Combined Reporting Under Limited Circumstances
CT (2016)
Source: KPMG, LLP
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Correlation between Sales Factor Weighting and Market‐Based Sourcing
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
Three Factor,Equal Weights
Double Weighted Single Sales
10
10
7
1
5
12
Percen
tage
of S
tates U
sing
IPA/
COP (or service perform
ed) vs. M
BS
Sales Factor Weighting
IPA / COP / Other Market
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2015 Sales Factor Weighting for Financial Institutions
Double‐weighted sales factor
Equally weighted 3 factor
No net income based tax
SSF phasing in
SSF required
AZ generally double‐weighted; elective SSF phase‐in for most taxpayers2015: 90%2016: 95%2017: 100%
NYC phase‐in (80% for 2015)
DC payroll and sales
MO elective SSF (now applies to financial institutions)
ND elective SSF phase‐in beg. in 2016
Alaska
HawaiiLA – service businesses in which property is not a substantial income factor uses 2 factor – payroll and sales; otherwise 3 factor equally weighted
Presented by:
Sourcing for Services – General Corporations
Market‐Based Sourcing
• Benefit Received• Arizona (election)• California• Iowa• Michigan• Missouri (if ultimate beneficiary is in MO)
• Ohio (CAT)• Rhode Island• Utah• Washington (B&O)• Wisconsin
Market‐Based Sourcing
• Service Delivered/Received
• Alabama• District of Columbia• Massachusetts• Pennsylvania• Tennessee (for tax years beginning on or after 7/1/2016)
• Illinois• Maine• Minnesota
• Customer Located• Georgia• Maryland• Nebraska• New York• Oklahoma
Service Performed
• Colorado• Connecticut• Delaware• Louisiana• New Jersey• North Carolina• South Carolina• Texas (Franchise tax)
Income Producing Activity / Costs of Performance
• Alaska• Arkansas• Florida• Hawaii• Idaho• Indiana (Benefit)• Kansas• Kentucky (Delivered)•Mississipi (Benefit)• Montana• New Hampshire• New Mexico (Delivered)• North Dakota• Oregon• Tennessee (pre‐7/1/2016)
• Vermont• Virginia• West Virginia
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2015 Sourcing for Services – Financial Institutions
NOTE: Different sourcing rules may apply to intangibles
Delivered/received/customer in state
Benefit in state
No net income based tax
NOTE: Different sourcing rules may apply to intangibles
Service performed in state (%) AZ – Eff. for 2014, an election is available to phase‐in market‐based sourcing for multistate service providers
TN – market‐based sourcing for tax years beginning on or after 7/1/2016
MO – market‐based sourcing for taxpayers electing SSFAlaska
Hawaii
DC
No special rules for financial institutions
Note: other rules may apply to income from intangibles, including interest or gain on sale of loans
Cost of performance
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APPORTIONMENT
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Apportionment Trends
State tax apportionment rules continue to evolve and become more complex Ongoing trend by the states to source various revenues based on location of the
customer rather than where the service was performed New York and California are the two most recent examples (approximately 20% of
the U.S. population) Market‐based methodology can have a material effect on individual state
apportionment, resulting in significant change to effective tax rate Customer data not usually found in the general ledger or other systems and not
readily available to tax department– As a result, many taxpayers find compliance challenging
California FTB is concerned that taxpayers will not be able to comply and will underreport apportionment to California
With the ongoing trend toward single factor market‐based sourcing and unitary combined filing, what else will the auditors have to audit?
Presented by:
Apportionment Challenges
States are not uniform in the way they are determining the “market” state for service and intangible receipts– Certain states look to the location where the benefit of the service is received– Other states look to the location where services are delivered
Different sourcing rules generally apply to intangibles; typically states look to where the intangibles are used– Often times there are differing rules based on the type of intangible and/or
customer Many of the new market states have also adopted “throwout” rules
– Thus, taxpayers will need to determine whether receipts attributed to states where the taxpayer is not taxable will be thrown out of the sales factor entirely
Certain states that statutorily adopt the IPA test will interpret the test narrowly to reach a market‐based result
Presented by:
California
Regulation adopts “look through” approach for sourcing investment advisors’ management fees California adopted market‐based sourcing effective January 1, 2013
– Receipts from services are sourced to California to the extent “the purchaser receives the benefit of the service” in California
– Per regulations, this means, “the location where the taxpayer's customer has either directly or indirectly received value from delivery of that service”
FTB has proposed amendments to California Code of Regulations (CCR) section 25136‐2 (the “‐2 regulation”) to be consistent with CCR section 25137‐14 (the “‐14 regulation”)— The ‐14 regulation provides the current rules applicable to advisors providing investment services to regulated
investment companies (RICs) Per FTB interpretation, benefit of the services is received by the shareholders, beneficial owners, or investors (the
“owners”) of the plans or accounts that ultimately pay the investment manager’s fees Therefore, income related to those services is sourced to the location of those owners
— If domicile of owners is determinable through books and records kept in the normal course of business, gross receipts are assigned to California based on the ratio of owners in California over owners everywhere
– If not determinable, sales are to be assigned by reasonably approximating the domicile of the owners using zip codes or other statistical data
– If unable to determine domicile based on zip codes or statistical data, the receipts are disregarded and not includable in the sales factor numerator or denominator
Presented by:
MassachusettsMassachusetts regulation does not adopt look‐through Sales of other than tangible personal property are sourced to Massachusetts if the taxpayer’s market for the sales is in Massachusetts
Services with respect to real estate are based on location of property Professional services provided to an individual customer are based on individual’s primary residence
Professional services provided to a business customer is based on hierarchy: – Contract of sale is principally managed by the customer– Customer’s place of order– Customer’s billing address– If >5% of sales from services are derived from a customer, the taxpayer has an affirmative duty to identify the state in which the contract of sale is principally managed by the customer
If source cannot be determined by the taxpayer, using a reasonable amount of effort, undertaken in good faith, assignment shall be reasonably approximated
Presented by:
Massachusetts, cont.
Regulation example 11: – Bank Corp provides its financial consulting services to Investment Co, a multistate business
client that uses Bank Corp to provide services in connection with investment accounts that Investment Co manages for individual clients, who are the ultimate beneficiaries of Bank Corp’s services.
– Assume that Investment Co’s individual clients are persons that are resident in numerous states, which may or may not include Massachusetts.
– Assuming that Bank Corp knows that its agreement with Investment Co is principally managed by Investment Co in Massachusetts, the sale of Bank Corp’s services shall be assigned to Massachusetts.
– It is not relevant for purposes of the analysis that the ultimate beneficiaries of Bank Corp’s services are Investment Co’s clients, who are residents of numerous states.
See 830 CMR 63.38.1(9)(d)4.d.i, ii(A) and iv, effective for tax years beginning on or after January 1, 2014
Presented by:
• What amount does the fund manager source to each state?
Massachusetts – $100 (sourced where service is delivered) California – $100 (sourced where benefit is received) New York – $100 (sourced where service is performed)
Hypothetical Example
Fund(Mass)
Investors(All located in California)Management Services
$100 fees
Manager(New York)
Presented by:
MTC Financial Institution Model Apportionment
MTC approved two major changes to its financial institutions’ model apportionment regulation at its July, 2015 meeting:
Loans removed from the property factor‒ Previously, loans sourced based on five elements: where loan was solicited,
investigated, negotiated, approved, and administered (the "SINAA" elements) Shift to market‐based sourcing for sales factor‒ Previously, market‐basis apportionment applied to many types of income;
however, unspecified services were sourced on a “cost of performance” basis‒ New rule provides two options for sourcing unspecified service receipts:
• Apply the state’s generally applicable rule• Apply MTC’s amended apportionment regulation, which sources service
income on a market‐basis
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NEW YORK STATE AND CITY LEGISLATION
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New York Tax Reform Highlights
Enacted March 31, 2014 generally effective January 1, 2015 Article 32 Banking Franchise Tax is repealed Banks and all other corporate taxpayers subject to substantially revised Article 9‐A Franchise
tax Significant changes impacting banks include:
— Adoption of economic nexus— Rate reduction to 7.1% in 2015 and 6.5% in 2016 and after— Increase in capital tax cap to $5 million but phased out by 2021— MCTD tax rate increased to stay revenue neutral— Tax on subsidiary capital and alternative minimum tax repealed — Significant revisions to taxation of investment capital and investment income— New net operating loss regime and transition rules
Single gross receipts factor with market based sourcing— Special rules for certain qualifying financial instruments (QFIs)
Unitary combined reporting
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New York State
Assembly Bill 3009 and Senate Bill 2009 (signed April 13, 2015) Adopts “technical corrections” to the New York State reform enacted last year. These
include:– A more narrow definition of investment capital‐ to constitute investment capital
stocks are subject to a number of restrictions – In addition, instead of a six‐month holding period, taxpayers must now hold
investments in non‐unitary stock for more than one year for the stock to constitute investment capital.
– Eight percent cap on investment income‐ any investment income in excess of the eight percent cap will be treated as business income
– Election to use ½ the NOL conversion subtraction pool in 2015 and 2016 is revocable
– Revised definition of qualified financial instruments; new apportionment provisions for marked‐to market gains
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New York City
Assembly Bill 6721 and Senate Bill 4610 (signed April 13, 2015) These bills largely conform New York City to the New York State corporate and bank
tax reforms enacted last year New York City conformity is retroactive to January 1, 2015 and includes the following:
— Replaces the New York City general corporate and banking taxes with a new tax applicable to most corporations
— Implements new customer‐based apportionment rules— Requires combined reporting if corporations are engaged in a unitary business
and meet a greater than 50% ownership test (no more SIT requirement)— Makes numerous tax base changes—NOL changes are similar to state changes
• Stops short of adopting full economic nexus provisions (credit card bank provisions included)
• No rate reduction and maintains existing SSF phase‐out provisions
Presented by:
Investment Capital Identification
Technical Memorandum TSB‐M‐15(4)C, 5l Income from qualifying investment capital is excluded from the business income
base and investment capital is excluded from the capital base Technical memorandum provides that stock not clearly identified as investment
capital in the manner required will not qualify as investment capital. Additionally, — Beginning Oct. 1, 2015, stock purchased as investment capital must be
identified as such on the day that it is purchased— Each taxpayer in a combined report must maintain separate account
information— A partnership must identify investment capital on behalf of corporate partners— The identification procedures additionally satisfy the investment capital
requirements of New York City
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Draft Nexus Regulation
New York Draft Regulations Amendments, Rule 20 §1‐3.1‐1.3.5 Under the statute, a corporation will have nexus with New York if it has $1 million or
more of receipts attributable to New York under the state’s apportionment laws Apportionment statute
― Allows corporation to elect to treat 8% of receipts from qualified financial instruments (“QFIs”) as New York receipts
• QFIs generally are assets required to be marked‐to‐market and include federal state and municipal debt, federal funds, and asset‐backed securities or other securities issued by government agencies
― For certain instruments, including private asset‐backed securities, 8% of the income MUST be treated as New York receipts
Draft regulation provides that a corporation will not have nexus with New York if the only receipts included in the numerator of its apportionment factor are
– Interest and net gains from sales of municipal debt instruments– Interest income from federal funds– Other securities issued by government agencies
It appears that investors in private asset backed securities may still have to contend with potential nexus under the 8% sourcing rule
Presented by:
Matter of TD Holdings, Inc. (N.Y. Div. Tax App. Jan. 22, 2015) Taxpayer was not required to use state NOL to reduce New York entire net income in
a tax year when it paid banking franchise tax on one of the alternative bases On audit, state had required taxpayer to use NOLs to reduce income to zero, even
though tax on the alternative “assets base” would be higher than the tax on net income even without the NOL deduction
ALJ rejected state’s position, reasoning that:– New York law requires that state NOL deduction cannot exceed federal NOL
deduction– But this did not mean NOL deduction could not be less than federal NOL deduction
Consider potential impact in determining prior NOL conversion subtractionunder NY State and City tax reform
New York Net Operating Losses
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MTC LITIGATION
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Multistate Compact Litigation
In 1964, the U.S. House of Representatives “Willis Commission” recommended that Congress adopt uniform state apportionment and tax base provisions
19 states and the District of Columbia entered into the Multistate Tax Compact, which included the Uniform Division of Income for Tax Purposes Act (UDITPA), in part to forestall Congressional action at the federal level
The Compact provides for equally weighted three‐factor (property, payroll, sales) apportionment formula election for taxpayers subject to an income tax (non‐financials)
Notwithstanding the Compact, California and other Compact states enacted different apportionment formulas over the years, with heavier weighted sales factors
The original compact legislation with the elective provisions remained on the books
Taxpayers filed under the Compact provisions, protested, and litigation ensued
Presented by:
Compact Activity in California
Gillette Co. v. Franchise Tax Bd. (Cal. Ct. App. Oct. 2, 2012) California appeals court held that taxpayers could elect to use Compact’s evenly‐weighted
three factor formula, rather than the double‐weighted sales factor formula mandated under Cal. Rev. & Tax. Code § 25128– In court’s view, when California became a signatory to the Compact, it entered into
binding agreement that, absent repeal of Compact in its entirety, obligated California to offer taxpayers the option to use Compact’s allocation and apportionment provisions
— California lawmakers could not unilaterally modify the Compact’s terms— Note that the decision was originally issued on July 24, 2012; however, on its own
motion the court vacated the original decision and subsequently reissued an opinion essentially identical to the original
Oral argument before the California Supreme Court were held Oct. 6, 2015; court has 90 days to issue decision
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Other Recent Compact Activity
Health Net, Inc. v. Oregon Department of Revenue (Ore. Tax Ct. Sept. 9, 2015) Taxpayer made evenly‐weighted three‐factor apportionment Compact election on amended
2005‐2007 tax returns following a federal audit The Oregon Tax Court held that the adoption of ORS 314.606 in 1993 was intended to disable
the Compact election, as evidenced by the testimony of Department of Revenue and Legislative Revenue Office representatives recorded during 1993 legislative hearings – ORS 314.606 reads: “In any case in which the provisions of [OR’s code] are inconsistent with
the provisions of [the Compact] ,the provisions of [OR code] shall control” The court further held that adoption of ORS 314.606 did not violate any procedural or
substantive provision of the Oregon Constitution, nor did it violate any provision of federal statutory law, the Compact Clause, or Federal Contract Clause
Thus, the taxpayer was not entitled to make the Compact election in determining its Oregon corporate excise for the tax years at issue
Presented by:
Multistate Tax Compact Litigation
Compact Status – Big PictureRepealed Repealed &
Re-enactedNo Change
California DC Alaska Alabama Arkansas ColoradoMinnesota Oregon Hawaii Idaho Kansas MissouriMichigan Utah Montana New Mexico North Dakota TexasSouth Dakota Washington
Litigation Status – Big PictureFinal State Sup. Court Court of Appeals Tax Court Below
IBM (MI) 11/14/14
Gillette (CA) Graphic Packaging (TX)
Health Net (OR) “Over 200 cases” (MI)
Lorillard (MI) –vacatedon 7/28/15 to consider retroactive Compact repeal
Anheuser-Busch, Yaskawa, Ingram Micro, Lorillard, IBM (MI)
Kimberly-Clark (MN)
“Numerous” (MN)
“17” (TX)
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OTHER DEVELOPMENTS
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California Nexus
Harley‐Davidson, Inc. & Subs. v. Franchise Tax Bd. (Cal. App. Ct., May 28, 2015), petition for review denied, California Supreme Court, No. S227652, September 16, 2015 Two bankruptcy‐remote special purpose entities (SPEs) that had no physical presence
in California were doing business in California through a financing subsidiary agent— The SPEs bundled and sold loans generated by the financing subsidiaries that
continued to earn fees from servicing the loans The court rejected the taxpayer’s argument that in‐state conduct performed on
behalf of an out‐of‐state taxpayer must be sales‐related to create income tax nexus— Rather, it is sufficient if the in‐state conduct is an “integral and crucial aspect of
the business”
37
Presented by:
Adoption of mandatory unitary combined reporting
‒ Effective retroactively to tax years beginning on or after January 1, 2015
‒ Unitary group defined as > 50% common ownership and engaged in a unitary business
• “Enterprise is sufficiently interdependent, integrated, or interrelated through its activities so as to provide mutual benefit and produce a significant sharing or exchange of value…”
‒ Water’s edge default methodology, worldwide election
‒ Affiliated group election allowed regardless of whether engaged in unitary business
‒ Income computed by each member separately, then aggregated
‒ Each members apportionment percentage computed with its own separate company numerators (plus a pro‐rata portion of sales of non‐taxable members) divided by entire group’s denominators; then multiplied by group’s aggregated net income.
‒ ASC 740 fix – entitles taxpayers to a deduction to offset financial statement impact
Extension of 20 percent corporate surtax to January 1, 2018
NOL generally limited to 50% of apportioned net income
Connecticut Combined Reporting
Presented by:
Illinois Economic Nexus
Capital One Financial v. Hamer An Illinois circuit court determined on summary judgment that Capital One
Financial’s subsidiary, Capitol One Bank, had sufficient nexus in Illinois to be subject to Illinois corporate income tax, and thus its receipts could be considered Illinois income, even though the subsidiary lacked a physical presence in Illinois– Although there were no Illinois cases interpreting “substantial nexus,” the
court found the reasoning in the West Virginia Supreme Court’s decision in Tax Comm’r v. MBNA to be persuasive
– The court noted that Capitol One Bank collected millions of dollars in fees and interest from Illinois residents, continuously engaged in solicitation of Illinois customers, and used the Illinois judicial system to recover debts and enforce liens on delinquent accounts
The court also determined that Capital One is not entitled to a dividends paid deduction for dividends paid by Capital One’s REITs because no provision for the deduction existed in Illinois
Presented by:
First Marblehead Corp. v. Comm’r of Revenue (Mass. Jan. 28, 2015)
Taxpayer was wholly owned subsidiary of corporation engaged in various aspects of post‐secondary student loan market
Taxpayer owned interests in trusts that purchased and securitized student loan portfolios
‒ Not engaged in originating loans
Taxpayer had no employees, payroll, tangible assets, or office space, but maintained books and records and had commercial domicile in Massachusetts
Massachusetts law sources income from loans based on SINAA factors
‒ Solicitation, investigation, negotiation, approval, and administration
Although only factor conducted in Massachusetts was administration, the court determined that the other factors were not considered because they were performed by third parties
The taxpayer has petitioned the U.S. Supreme Court for review
Massachusetts Sourcing of Purchased Loans
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Adopts a new business license fee based on gross revenue – Resembles B&O tax with 30 different licensing categories with different rates
Commerce tax applies to “business entities” including corporations, passthroughentities, joint ventures, and other persons engaged in business in Nevada‒ Excludes 501(c)(3) organizations, credit unions, certain REITs and REMICs,
passive entities, and persons whose activities in Nevada are limited to owning, maintaining, and managing the person’s intangible investments
Base of tax is “gross revenue;” includes 25 different deductions― First $4 million Nevada gross revenue is deductible
Service receipts attributed to Nevada in proportion to benefit received Effective July 1, 2015 Department of Taxation issued “Questions and Answers” on Sept. 8, 2015 http://tax.nv.gov/uploadedFiles/taxnvgov/Content/FAQs/Commerce_Tax_FAQs.pdf
— Every business entity subject to the tax must file a return even if they fall under the $4 million threshhold
Nevada Commerce Tax
Presented by:
North Carolina Budget Package
North Carolina House Bill 97 (signed Sept. 18, 2015) Long delayed budget bill includes a number of corporate income and franchise tax
changes; ― Corporate income tax rate reduction to 3% for the tax year that begins on the
January 1st (of any calendar year) following the fiscal year when the amount of net General Fund taxes collected exceeds $20,975,000,000
― Phase‐in of single‐sales factor apportionment for general corporations― Changed the adjustment required for expenses related to dividends. Now
capped at 15% of dividends for all types of corporate taxpayers.
Presented by:
North Carolina Budget Package (cont.)
Market sourcing informational report requirement:– Per the new law, the information report must be filed by the original due
date (without extension) of the 2015 corporate income tax return Basically, taxpayers will need to compute their 2014 apportionment using market
sourcing rules– Statute sets forth market‐based sourcing rules; taxpayers must use Multistate
Tax Commission’s model market‐sourcing regulations to aid in making apportionment determinations
– $5000 penalty can be applied for failure to file a timely information return
Presented by:
North Carolina Budget Package (cont.)
Repeal of IBF deduction Franchise tax base changes effective for taxes due on or after January 1, 2017
– Franchise tax is imposed on a corporation’s net worth (determined by GAAP), rather than the amount of issued and outstanding capital stock, surplus and undivided profits, apportioned to North Carolina
– Excludes deposits from a bank’s borrowed capital for the affiliated indebtedness addback exception
Bank privilege tax is repealed effective July 1, 2016
Presented by:
Ohio Financial Institutions Tax
OCC Opinion Letter Issued to First Bank of Dennison – September 17, 2015
Congress authorizes states to a tax national bank as though it were a bank organized under the laws of the state in which the bank’s principal office is located. 12 USC § 548
Ohio Financial Institutions Tax (“FIT”) grants a credit for regulatory assessments paid by Ohio chartered state banks to the Ohio Division of Financial Institutions, but it provides no corresponding credit for regulatory assessments paid to other financial regulators by a national bank that has its principal office in Ohio
The Ohio Comptroller of Currency determined that the FIT violated 12 USC § 548. As a result, the imposition of the FIT on a national bank is not authorized by federal law
Presented by:
Governor’s Budget released March 3 contains various tax proposals, which were introduced as bills in the General Assembly, but rejected by the Republican controlled General Assembly. The current budget (required to be adopted by June 30, 2015) is currently at an impasse. Proposals include:
Bank and Trust Company Shares Tax – Repeal tax decrease, effectively increasing tax rate from 0.89 percent to 1.25 percent
effective for 2014 and forward– Clarify the apportionment of receipts from investment and trading activities
Corporate Net Income Tax
– Adopts mandatory unitary combined reporting
– Lowers rate from 9.99% to 4.99% in 2018
– Existing NOLs combined and limited to greater of $3 million or 12.5% of taxable income per member
Capital Stock and Franchise tax repealed after 2015
Pennsylvania Budget Proposal
Presented by:
QUESTIONS?
Presented by:
Contacts
Walter Doggett – E*TRADE Financial Corporation703‐236‐8778 Walter.doggett@etrade.com
Dan McGuire – KPMG, LLP Tysons Corner703‐286‐8275dmcguire@kpmg.com
Dave Turzewski – KPMG, LLP New York212‐872‐5628dturzewski@kpmg.com
Tracy Graham – KPMG, LLP Charlotte704‐371‐8249tracygraham@kpmg.com
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