What used to be called the “off-season” in Major League Baseball, now enthusiastically referred to as the “Hot Stove” offers fans some of the most interesting and potentially impactful activity related to the sport. To a baseball fan there is no longer an “off-season.” And as we all have experienced, there is no longer an “off-season” for Multistate taxpayers or their advisors.
Over the next several posts we will discuss, explore and humbly prognosticate some of the Multistate tax “Hot Stove” areas that should warrant your attention during this “quiet” end of year holiday season including:
States’ Trend of Adopting Market-Based Sourcing and its Potential Ramifications
We’ll dive into how states’ adoption of market-based sourcing may not only increase a multistate taxpayer’s income tax in remote states but may be one of the linchpins in expanding states’ ability to assert income tax nexus on remote taxpayers.
Nexus and Due Process in the New Millennium
Are the Goodyear Dunlop Tires Operations, S.A. v. Brown and Daimler AG V. Bauman decisions the tip of the Due Process iceberg that may scuttle states’ long arm nexus provisions? We will explore how these decisions may ultimately provide a new basis for challenging states’ remote nexus provisions.
Water’s Edge “80/20” Provisions and “Tax Havens” Effect on Combined Filing
A number of states that have adopted “Water’s Edge” also have “80/20” provisions that may expand the definition of the “domestic” unitary group to require the inclusion of one or more foreign affiliates that have a presence in the United States.
In addition, we have noticed a trend in states adopting “tax haven” provisions that may significantly expand the members of a unitary group to include affiliates that are incorporated, formed or doing business in ‘tax havens’.
Just as in baseball, the most valuable skill set revolves around one’s ability to keep an eye on the ball. Keeping your eye on the Multistate tax ‘ball’ is just as essential in the Multistate Tax ‘offseason.’