Bus. 225F - State Income Taxation

Professor Annette Nellen

Summer 2011

The reading material at this website is in addition to the reading assignments noted in the syllabus.  Take a careful look at what is written below. Sometimes the instructions are to just skim it (online) or to just read specific pages.

• Syllabus

• Research Questions

• Questions you should be able to answer by the end of the course

• Desire2Learn:  Instructions       Log-in page

• How to access RIA, CCH and BNA research tools available for SJSU MST students - here

  Reference Materials (do not print these unless you want a few of the pages; these are long codes and manuals)

• California Revenue & Taxation (R&T) Code  [Personal income tax starts at §17001 and corporate income tax starts at §23001; allocation, water's edge election and UDITPA start at §25101]

• R&T Regulations can be found on CCH or RIA as needed

  • CA Regs list from Westlaw (free, but easier to pull from CCH or RIA)  -  go to link for Section 18

• Public Law 86-272 (1959)

  • Statement of Information Concerning Practices of Multistate Tax Commission and Signatory States Under Public Law 86-272

  • MTC Info on Nexus:  Cases       Selected State Nexus Standards

  • Economic nexus in the states

  • Additional information on PL 86-272 and efforts to reform it - here

• Uniform Division of Income for Tax Purposes Act (UDITPA)

  • MTC Allocation and Apportionment Regulations

• Multistate Tax Compact

• CA Board of Equalization Legal Opinions

• Franchise Tax Board Multistate Audit Techniques Manual  [provides a nice overview to CA law wrt unitary reporting and apportionment]

• Franchise Tax Board Water's-Edge Manual

• Franchise Tax Board Residency and Sourcing Technical Manual

• Franchise Tax Board - Index of Forms and Publications

• Franchise Tax Board - Definitions

• FTB Law and Legislation website

• FTB 2006 Annual Report (lots of data and background information) + other years

• State Comparison Data:

  • State Corporate Income Tax Rates (Tax Foundation) and more

  • Various state data (Federation of Tax Administrators)

  • Tax mix (US Census Bureau)

• Academic Integrity and Avoiding Plagiarism

• State tax collections compared by source and state - (Federation of Tax Administrators)

• "Chasing Tax Revenue Across State Lines," Business Week, 5/21/09

• The potential broad reach of income tax nexus when PL 86-272 does not apply - Colorado Ruling GIL-2009-010 (2/24/09)

• Public Law 86-272 (read text of PL 86-272 and 50th Anniversary article)

• State Income Tax Terminology, Concepts and Laws - Part I

  • Authority to tax multistate businesses - Northwestern Cement v. Minn., 358 US 450 (1959). This case led Congress to enact PL 86-272 a few months later.

  • Authority to tax a portion of a unitary business - Allied Signal, Inc. v. Director, Division of Taxation (NJ), 504 US 768 (1992)

  • AICPA State Corporation Tax Issues Practice Guide - review of some key corporate income tax concepts (skim/reference)

   

• State Income Tax Terminology and Key Concepts - Part II

  • Assuming nexus exists, how much can a state tax?

  • Uniform Division of Income for Tax Purposes Act (UDITPA) - skim  (for reference and we will be using this in class and for homework

    • MTC outline on revising UDITPA (2009) - read pages 3 - 6 on background on UDITPA)

  • UDITPA and uniformity across the states - Oracle v. Oregon (TC-MD 070762C; 2010)

  • UDITPA and Sales Factor - General Mills v. Franchise Tax Board (2009); in July 2009, the CA Supreme Court denied to review the case

  • "Unity"  - FTB Multistate Audit Technique Manual on this topic - just read pages 1 - 3, 8 - 13

  • Combined reporting and its pros and cons - see excerpts from tax reform commissions in Md and SC included in Day 1 handout

   

• California:

  • Form 100 + instructions (review)

  • Schedule R, Apportionment and Allocation of Income (review) Schedule R instructions (review)

  • FTB Pub 1061 - Guidelines for Corporations Filing a Combined Report (reference)

  • FTB - common errors found on combined returns  (skim)

  • FTB Notice 2004-5 and Notice 2006-3 relating to Section 18 of UDITPA and R&T 25137 on using a different apportionment or allocation rule

• Nellen, Not Flat: State Income Tax Nexus, 6/08

• Statement of Information Concerning Practices of Multistate Tax Commission and Signatory States Under Public Law 86-272  (skim)

•     California - FTB Pub 1050

• Geoffrey case from South Carolina (1993)

• Tax Commissioner of the State of West Virginia v. MBNA America Bank (S Ct. WV 2006)

• New (2011) California rules on "doing business"

  • California R&T §23101

• Information from State of Connecticut on economic nexus

• Information from State of Washington on its economic nexus rule

• 2008 Income Tax Nexus Developments

• Multistate Tax Commission (MTC) Factor Presence Nexus Standard

• MTC, Nexus Program Bulletin 95-1, Computer Company's Provision of In-State Repair Services Creates Nexus (California did not adopt this)  (skim)

• Virginia Tax Commissioner Ruling 10-252 (11/10/10) - how does it compare to the MTC Nexus Program Bulletin 95-1 (above)?

• Sampling of state nexus questionnaires: (skim)

  • Louisiana

  • South Dakota

  • Utah

• Access the slides and video presentation on Desire2Learn

• LLCs in California - info from FTB

• S Corporations in California - info from FTB

• FTB Mission

• Minimum tax (FTB Info)

• FTB Pub 984 - State/Federal Differences for Businesses

• Container Corp v. FTB, 463 US 159 (1983) - can "unitary" include foreign entities?

• FAQ on California taxes (skim)

• FTB FAQ on assignment of credits within a combined unitary group (skim)

• FTB Audit Information

• California - Statute of limitations on assessments (skim)

• FTB Regulatory Activity

• Professor Nellen presentation on various state tax procedures:  Presentation (25 minutes)        Powerpoint file

  • BOE Pub 142 on hearings process

  • BOE Meeting schedule and webcasts information

• California tax credits (FTB Info)

• CA FTB Legal Division Guidance 2011-06-01 on gross receipts for the research credit

• Checklist for Utilizing Sustainable Building Tax Incentives, by Nellen and Miles - page 70 only (items on list are relevant for other types of incentives too)

• "Calls for Accountability - Will It Help the Overall Incentives Process?" by Nellen, Multistate Taxation and Incentives (on Desire2Learn) - read it

• FTB Monthly newsletters (and how to subscribe)

• Gross Receipts Taxes, AICPA Corporate Taxation Insider, 4/24/08

• Gross Receipts Taxes - Panacea or mistake? AICPA Corporate Taxation Insider, 5/22/08

• Moving State Tax Systems into the 21st Century, AICPA Tax Insider, 3/12/09

• State Examination of Corporation Taxation, AICPA Corporate Taxation Insider, 6/23/11

• Minnesota's 21st Century Tax Reform Commission Final Report (2/09) - call for repeal of the state corporate income tax (pages 14 - 19)

Professor Annette Nellen                                                                                                                                 June 30, 2011