Due to the COVID-19 pandemic, millions of people have been telecommuting from their home state or another location. Allowing employees to telecommute from states in which they do not normally work can create a host of issues for companies, but the two biggest tax issues relate to nexus and income apportionment. Will the presence of an employee working from home create income tax nexus for the employer in that state? What if the business relied on the protection of P.L. 86-272 prior to the pandemic? How should a business apportion and allocate income among multiple states?
This course looks at how corporations can navigate the complex maze of state allocation and apportionment rules, particularly as many businesses have established a wider multistate footprint during and after the pandemic.
Publication Date: October 2021
Topics Covered
- Income/Franchise Tax Nexus
- P.L. 86-272
- COVID-19 Impact on Nexus
- Brief History of Apportionment Formulas
- COVID-19 Impact on Apportionment
- Discretionary Apportionment Relief
- Nexus Compliance Options
Learning Objectives
- Identify how to resolve the two biggest tax issues related to nexus and income apportionment when telecommuting from home state or another location
- Recognize how corporations can navigate the complex maze of state allocation and apportionment rules
- Recognize which type of presence only enters the analysis when an out of state business has no physical presence in a state
- Identify which state ended its COVID-19 Nexus exception in June 2021
- Identify which state continues to have a COVID-19 Nexus exception throughout 2021
- Differentiate between apportionment and allocation
- Identify the number of states that still use three factor apportionment that includes a "payroll factor"
Level
Basic
Instructional Method
Self-Study
NASBA Field of Study
Taxes (2 hours)
Program Prerequisites
None
Advance Preparation
None
Instructors
Hodgson Russ LLP
Hodgson Russ has approximately 200 attorneys in offices in Albany, Buffalo, New York City, Rochester and Saratoga Springs, New York; Hackensack, New Jersey; Palm Beach, Florida, and Toronto, Canada.
We serve a wide range of clients, from multinational and privately held corporations to nonprofit organizations, governmental entities, and individuals. Our attorneys practice in every major area of law and use multidisciplinary work teams to serve the specific, often complex, needs of our clients.
Open Weaver Banks
Open focuses her practice on State and Local Taxation. Her extensive experience includes representation of taxpayers in administrative and court appeals in New Jersey, New York and Illinois on a variety of complex issues, including apportionment of business income, combined reporting, constitutional nexus, the Internet Tax Freedom Act, nonresident and resident personal income taxation, sales and use taxation, and the imposition of various industry specific taxes, including telecommunications, utilities, and amusement taxes.
Open has represented both public and private companies engaged in a wide range of activities, including manufacturing, retail, telecommunications, banking, transportation, construction, sports, television and radio production, publishing, and insurance. She has also represented individuals challenging residency determinations and assessments arising from adjustments to income and credits. In addition to a wealth of experience at conducting discovery, witness selection and preparation, motion practice, brief writing, trials and appeals, Open is experienced and adept at identifying efficient and practical pre-decision settlement strategies to resolve tax controversies.
Open is a frequent author of articles on tax topics in State Tax Notes, Bloomberg Tax and Law360, and has spoken on state and local tax issues before such groups as the Tax Executives Institute, the American Bar Association, the Council on State Taxation, and the Georgetown University Law Center Advanced State and Local Tax Institute.
Prior to joining Hodgson Russ Open was counsel with a multistate tax practice located in New York City.
K. Craig Reilly
Craig is a partner in the firm’s State & Local Tax Practice. Craig counsels businesses and individuals in a range of state and local tax issues, with a focus on New York State, New York City, New Jersey, and multistate tax issues.
Prior to joining Hodgson Russ, Craig was a judicial intern for the Honorable Jane A. Resanti of the U.S. Court of International Trade and an investigative analyst at the New York County District Attorney's Office.
Craig advises clients on all aspects of state and local tax from planning and compliance to controversy and litigation. He represents clients in disputes with the New York State Department of Taxation and Finance, New York City Department of Finance, and New Jersey Division of Taxation and is experienced in handling sales tax, corporate franchise tax, personal income tax, and residency audits.
Craig works closely with remote retailers and cloud-based software vendors on a variety of multistate tax compliance issues, including filing requirements, sales and use tax collection obligations, income allocation and apportionment, tax registrations, and applications for voluntary disclosure and other amnesty programs.
Katherine Piazza
Katherine is a member of the firm's State and Local Tax Practice where she focuses on state and local tax litigation and planning. She represents clients in a wide range of multistate tax issues, from planning and compliance to audit and litigation. Katherine also advises on issues concerning income, gross receipts, sales and use, and franchise taxes. In addition, she works with clients on tax planning, residency planning and other administrative law matters.
Prior to joining the firm, Katherine was a state and local tax associate in an international law firm where she represented multinational and domestic corporations, limited liability companies, partnerships, and individuals in a variety of multistate tax issues. She also worked in an accounting firm's state and local tax practice where she advised clients on a variety of state and local tax issues.