21st Century Taxation

Improving the US and California tax systems: 
What's wrong, why we should be concerned, how to fix the problems

Quick list of California tax problems

Table of Contents

California's Tax Issues and Solutions

1. Several Weaknesses Exist: An Introduction to Some of the Problems  (web)  (pdf) (podcast)

   • Most of these weaknesses can be solved by fixing the tax base - they cannot be solved with a rate increase. A rate increase would make most of these problems worse.

   • Revamp tax laws to support California spending, San Jose Mercury News 8/20/07 
     (examples of ways to improve California revenues as one way to address spending needs)

2. Sales and Use Tax: Issues

   1. Tax Base is Too Narrow (web) (pdf) (podcast)

      • Download or pick up: Why is one tax-free?  SF Chronicle 7/11/07

      • California's 20th Century Sales Tax  LA Times 7/18/07

      • Obstacles to Taxing Services — Are They Insurmountable? AICPA Corporate Tax Insider, 2/28/08

      • Taxing Some Services Could Help if It's Fair and Simple, San Jose Mercury News, 6/29/08

   2. Challenges in Collecting the Use Tax (web) (pdf) (podcast)

      • The Practitioner’s Role in Use Tax Compliance, AICPA Tax Insider, 8/9/07

      • California's Use Tax Collection Challenges and Possible Remedies, California Tax Lawyer, Fall 2007 

   3. Pyramiding Nature of the Tax (web) (pdf)

   4. Nexus Uncertainty (web) (pdf)

      • Nexus Confusion: Sales and Use Tax, AICPA Corporate Tax Insider, 9/27/07

3. Personal Income Tax Weaknesses

   1. The tax is too volatile  (web) (pdf)

      • 'Spending problem?' - some of it's hidden in our tax laws, SF Chronicle, 2/10/08

      • Know New Taxes (a look at environmental taxes), SF Chronicle, 9/19/07 (one possible partial solution)

   2. Complexity due to lack of conformity with federal rules, various special rules and not using simplification techniques  (web) (pdf)

   3. Too many costly and unnecessary tax breaks (web) (pdf) 

      • 'Spending problem?' - some of it's hidden in our tax laws, SF Chronicle, 2/10/08

4. Corporate Franchise Tax Issues

   1. Conformity with the federal income tax is low  (web) (pdf)

5. Property Taxes Reform Considerations

   • Splitting the Roll   Real Estate Taxation, 3rd quarter 2004

6. Alternative Taxes

   • Know New Taxes (a look at environmental taxes), SF Chronicle, 9/19/07

   • Carbon taxes

7. Telecommunications Taxes   (2003 policy brief by Prieger, Sexton and Nellen)

   • Taxes have not kept up with changes in technology 

   • State and local simplification is possible through coordination 

8. Tax Administration

   1. Tax agency coordination proposals [coming soon]

9. Chokeholds on the Tax System - [coming soon]

10. Tax Reform Process/Issues

    • Don't link school spending to oil companies' profits, San Jose Mercury News, 3/21/08

    • California's tax loopholes that aren't, San Diego Union Tribune, 7/11/08

    • A Tax Commission for California? How It Can Be Made to Work, California Progress Report, 7/27/08

     

Multistate Tax Issues & Solutions

• Sales and Use Tax Nexus Issues

  • Nexus Confusion: Sales and Use Tax, AICPA Corporate Taxation Insider, 9/27/07

  • Grabbing Remote Vendors, AICPA Corporate Taxation Insider, 7/31/08

• E-Commerce Taxation Issues

  • Internet Era Questions for Individual Clients, AICPA Tax Insider, 1/10/08

  • Overview to federal and state e-commerce tax issues   presentation outline 11/3/06

  • Let's say goodbye to the Internet tax moratorium  Silicon Valley/San Jose Business Journal, 8/10/07 and Portland Business Journal, 8/17/07

  • E-Traits

  • E-Commerce Taxation Information by Annette Nellen:

    • Guide (7/03), 81 pages

    • Chapter from the Internet Encyclopedia, 2004, 11 pages

• Public Law 86-272

  • The 50th Anniversary of Public Law 86-272, AICPA Corporate Taxation Insider, 3/27/08

  • Blog on this topic - what do you think: Should PL 86-272 be updated and if yes, how?

  • 50th Anniversary of PL 86-272 website

  • Not Flat - State Income Tax Nexus, AICPA Corporate Taxation Insider, 6/26/08

• Gross Receipts Taxes

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

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

• Tax Reform Issues - General

  • New Taxes and Tax Policy, AICPA Tax Insider, 4/10/08

Federal Tax Issues & Solutions

• Federal Tax Reform and Strategy

  • Tax Reform Information (website - background information on major federal tax reforms, links to legislation and state tax commission reports and links to relevant policy reports)

  • The Future of the Corporate Income Tax, AICPA Corporate Taxation Insider, 10/25/07

  • Strategy for Major Tax Reform, AICPA Tax Insider, 11/8/07

  • Corporate Tax Under the Microscope, AICPA Corporate Taxation Insider, 1/24/08

  • Goodbye State Tax Deduction, AICPA Tax Insider, 5/8/08

  • Pot of Gold in the Employer-Provided Healthcare Exclusion, AICPA Tax Insider, 6/12/08 (the benefits of and need to link health care and tax reforms)

  • Rethinking IRAs, AICPA Tax Insider, 7/17/08

  • Small Business Tax Reform, AICPA Corporate Taxation Insider, 8/28/08

  • Tax Déjà Vu, AICPA Tax Insider, 10/9/08

  • Policy approach to analyzing tax systems and proposals (Nellen)

• AMT

  • Simplicity and transparency versus the dread AMT, Silicon Valley/San Jose Business Journal, 12/7/07

• Worker Classification

  • Worker Classification - Is Congress Ready to Take Action? AICPA Tax Insider, 12/13/07

• Tax Gap

  • Property Transactions of Individuals Can Contribute to the Tax Gap, AICPA Tax Insider, 9/13/07

  • Closing the Tax Gap, AICPA Tax Insider, 8/14/08

• Budget Problems

  • Tough Tax Questions for Presidential Candidates, from The AICPA Tax Insider, 2/14/08

• Environmental Taxes

  • Warming up to a Carbon Tax, AICPA Corporate Taxation Insider, 11/29/07

  • Policy Considerations of a Carbon Tax, AICPA Corporate Taxation Insider, 12/11/07

  • Taxes and Sustainability, Journal of Green Building, Fall 2007

  • Green Taxation, AICPA Tax Insider, 9/11/08

• E-Commerce

  • E-Commerce Taxation - Guide to Understanding the Current Discussion & Debate + Links (website)

  • E-Commerce Taxation - update presentation of 8/15/08

• Miscellaneous

  • What’s Your Tax System IQ?, AICPA Tax Insider, 3/13/08

  • Our Neglected Federal Research Credit, AICPA Corporate Taxation Insider, 9/25/08

Helpful Links

• California Tax System: A Primer by the California Legislative Analyst's Office (LAO)

• California Revenue & Taxation Sales & Use Tax rules 

• California Board of Equalization

• California Franchise Tax Board

• California Department of Finance

Personal Information

• Annette Nellen is a professor of accounting and taxation in the College of Business at San José State University where she teaches graduate tax courses (MST).  She is also the director of the SJSU MS Taxation Program, director of the SJSU Campus Reading Program, director of faculty development for the College of Business and is chair of the Athletics Board.