Bloomberg Tax & Accounting Shares Findings From Its 22nd Annual State Tax Service Survey

ARLINGTON, Va., July 18, 2022 /PRNewswire/ — Although nearly every state offers a Voluntary Disclosure Agreement (VDA) program, the matters eligible for inclusion in these programs vary widely, according to Bloomberg’s 22nd Annual Tax & Accounting Department Survey. state taxes. State tax professionals interested in learning more about this year’s survey results and key trends can attend a free Bloomberg Tax & Accounting webinar at Thursday July 21 at 11:00 a.m. ET. To register for the event or to download a summary of the survey results, visit http://onb-tax.com/BOFY50JRBZj.

This is the first time Bloomberg Tax & Accounting has asked about VDA programs. The survey finds that only six states noted issues missed during a corporate income tax audit eligible for inclusion in these programs. Twenty-three states also indicated that receipt of a link survey will disqualify a state from participating in their state’s VDA program.

The 2022 State Tax Department Survey includes a wide range of questions on corporate income and sales tax from senior state tax officials from 41 states and washington d.c., clarifying how their jurisdictions address the gray areas of corporate and sales income tax and use tax laws, in addition to laws relating to the taxation of flow-through entities. The survey also examines the response to federal tax changes and the distribution and supply of state taxes.

“Each year, we seek advice from states to help tax practitioners navigate constant changes in laws and regulations and discern their best options in gray areas,” said Heather Rothmann, vice president of analytics and content, Bloomberg Tax & Accounting. “This year, we were excited to dig into Voluntary Disclosure Agreements and taxes impacting flow-through entities.”

“I am impressed with the quality and quantity of information compiled in the state tax departments survey,” said Sylvie Dion, Founder and Tax Managing Partner at PrietoDion Consulting Partners, LLC. “When I’m doing tax research, I can’t tell you how many times I’m like, ‘What does Bloomberg’s tax survey show?’ and participate in the investigation.

Other key findings from the survey include:

  • Twenty-two states, up from 15 last year, reported imposing an entity-level tax on flow-through entities. However, these states were divided on whether the entity must pay its tax at the entity level: seven states say their transmitting entity tax is mandatory and 15 states say their tax is optional.
  • In their responses, States provided key information on how their economic nexus thresholds are calculated. While most states use sales made in one calendar year to determine whether a seller has established economic nexus, 4 states report using sales made in the previous four calendar quarters. Additionally, nearly all states responded that they include sales of tax-exempt items in the calculation of their economic nexus thresholds, but only about half of the states include sales for resale in their calculations.
  • As companies adjust to a more remote workforce, the bond created by remote workers continues to create complexity for companies trying to determine where they have tax reporting and payment obligations. . Thirty-three states reported that one in six employees who perform activities other than solicitation would bond for an out-of-state company if the employee telecommutes from their state.
  • States continued to refine their responses to the CARES Act. All but three states responded that they are in compliance with Section 1106(i) of the CARES Act which provides that PPP loan forgiveness will not be included in taxable income. Conversely, only seven states reported compliance with IRC § 172 as amended by the CARES Act, which modifies the net operating loss deduction.

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SOURCE Bloomberg Tax and Accounting