State and Local Reporting: 1099 and SALT Issues (Currently Unavailable)

Author: Steven D. Mercatante

Join us and discover proven methods for more efficiently meeting your State level 1099 reporting and sales and use requirements as well as get updated on important changes in the law. This is one of the most important topics your organization needs to address.

More and more states are partnering with the IRS to concentrate enforcement efforts on payments made by US organizations within individual states that are currently not being reported. Understand the basics of state reporting and explore best practices for determining your reporting requirements - including those brought about by recent changes in state information reporting laws.

In this quarterly update, industry expert and corporate tax attorney Steven D. Mercatante Esq. takes a look at some of the more common problems related to state and local compliance while offering solutions and best-practices for addressing related reporting issues.

Publication Date: February 2022

Topics Covered

• Your Approach
  • Determine which states have jurisdiction over your business — "nexus" — we will talk more about this later
  • In those states where your business is subject, determine the Form 1099 (or equivalent) compliance & filing requirements
  • Cities or municipalities may also have Form 1099 compliance, reporting, and withholding requirements
  • Consider participation in the combined federal/state filing program (CFS)
• State Reporting Examples - California
  • Income Reportable to California
  • Solutions and best-practices for addressing related reporting issues
  • Watch your definitions: Non-reportable intangible income includes:
    • Dividends
    • Interest
    • Gains from the sale of stock
• State and Local Reporting Checklist
  • Identify states and cities where you may have reporting obligations
  • Get up-to-date information on state websites
  • Have tech department verify that form 1099 file includes "K" records (for combined fed/state program)
  • Use software that matches payee residence against states participating in combined fed/state program and also allows for manual overrides
  • Be aware of state withholding reports
  • Know city or municipality withholding and reporting requirements
    • Unclaimed Property Overview
    • Sales and Use
    • Protect Yourself

Learning Objectives

• Identify state tax rules that your organization's staff needs to understand
• Recognize how to determine which states have jurisdiction over a given organization's business operations
• Compare and contrast the combined federal state filing programs benefits and shortcomings
• Recognize how to analyze particular state 1099 reporting requirements in detail
• Describe which states have reporting requirements that apply to your organization
• Identify what sales & use, and combined federal/state program compliance risks face your organization and how you should respond
• Identify state tax rules that your organization needs to address now
• Recognize correct statements with respect to determining nexus

Level
Basic

Instructional Method
Self-Study

NASBA Field of Study
Taxes (2 hours)

Program Prerequisites
None

Advance Preparation
None