Multistate Tax Issues for Financial Services

Author: K. Craig Reilly, Hodgson Russ LLP

Financial services businesses and professionals face unique state and local tax issues. From industry-specific income and receipt apportionment and allocation rules; to mobile workforces and nationally dispersed customers who can create nexus in numerous jurisdictions; to significant spends on expenses that often create unexpected sales and use tax exposure (or refund opportunities), such as software and information services. Financial services businesses are also often early investors in asset categories that remain poorly defined in state tax statutes, such as cryptocurrency and non-fungible tokens (NFTs).

During this two-hour CPE course, New York-based tax attorney, K. Craig Reilly, Esq., from Hodgson Russ LLP, will outline the potential state and local tax pitfalls and opportunities to consider when engaging in a multistate financial services business. A working knowledge of industry-specific nexus, income apportionment and allocation, self-trading exemption, and tax computation rules is absolutely critical for tax practitioners, business owners, executives, fund managers, and other professionals that assist financial service businesses with state and local tax compliance.

Publication Date: October 2022

Designed For
All CPAs, enrolled agents, tax return preparers, tax attorneys, corporate attorneys, and other practitioners who advise on multistate tax issues will benefit from this insightful webinar.

Topics Covered

• Industry Overview
• Unique SALT Considerations
• Nexus
• Nexus Exemptions / Exceptions
• Income Allocation and Apportionment
• Choice of Entity — Wall Street Apportionment Examples
• Sales and Use Tax Considerations
• Pass Through Entity Taxes
• Voluntary Disclosure Programs

Learning Objectives

• Recognize how to describe economic nexus rules
• Identify and advise on industry-specific receipt and income apportionment and allocation rules
• Recognize how to assist financial services businesses in general sales and use tax compliance
• Identify a fancy word for "connection"
• Identify the approximate number of individual states moving to an "economic nexus" approach
• Identify the state that uses a factor presence of $500,000 of receipts
• Identify the Public Law passed by the federal government to minimize the potential income tax burden of operating in numerous states
• Identify the state that provides specific sourcing provisions for other receipts from broker or dealer activities and receipts from investment companies

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None