SALTovation: Making Sense of State and Local Tax

In this episode of the SALTovation podcast, we speak with Sandra Wiley, President of Boomer Consulting - an organization dedicated to guiding CPA firms towards success by leveraging leadership, talent, growth processes, and technology. Sandra shares her unique perspective and critical strategies that drive CPA firms. Building a connected community through meaningful relationships can enable firms to create a culture that fosters collaboration and allows individuals to thrive. Listen this week as we discuss the progressive edge of CPA firms today, focusing on community, leadership, and diversity.

Topics discussed in this episode:

• CPA firm consultation: focusing on community, holistic leadership, and innovation
• Community building is crucial, particularly with remote work, fostering relationships and collaboration 
• Holistic leadership: considering the whole person, integrating personal and professional lives for a balanced approach to management.
• How CPA firms are evolving in an increasingly competitive space
• Proactive adaptation to automation and resource diversification is key to future-proofing CPA firms 

Quotables

• “When I think of holistic leadership today, it's looking at the whole person. When we look holistically at who people are, the human side of them, they are personal and professional. Diversity and inclusion and feeling like you belong somewhere, that is a part of well-being.” -Sandra Wiley [13:15]

• “Young people are coming into firms today with a long list of all the questions they have for ‘what are you going to do for me?’ There are a lot of people who hate that, but that's what they're doing. They're going to come through the door and ask ‘What kind of training are you going to give me?’, ‘What do I do if my kids are sick? Can I work from home three days a week? If we don't have good answers, they will walk down the street and find another company that will give them what they want.” -Sandra Wiley [25:00]

Connect

This week we continue our discussion with Paul Miller, Vice President & Deputy Director of the ACMA, and David Swetnam-Burland, Partner at Brann & Isaacson. As remote sellers navigate the new state tax laws and consumer privacy regulations, the need for federal legislation to provide clarity and consistency for businesses operating across multiple states has increased. Listen as we discuss the impact of local home rule cities, such as in Colorado, on compliance efforts and how the ACMA advocates for federal solutions to protect their members and promote industry growth. 

Topics discussed in this episode:

• The MTC's updated interpretation attempts to align tax laws with the digital era, impacting businesses that operate online.
• The definition and application of 86-272 is a central point of contention, with states leveraging different interpretations to expand their tax bases.
• Legal challenges, especially in California and New York, are proving pivotal in establishing how nexus laws apply and are enforced.
• Local compliance, notably in Colorado's home rule cities, adds complexity to the remote sellers' tax obligations and merits close legal attention.

Quotables

• “From the ACMA's perspective, our approach, as I mentioned earlier, is always to try to get a federal bill passed into law, because organizations like ours, we're very small comparison to, say, the milk industry or something. We're serving a pretty specific constituent, and they are located throughout the states and they're being chased by different states, and we don't have the means to chase after those states to defend them.” -Paul Miller [17:51]
• “It is one thing for the Supreme Court to say we created a rule in 1992, now we're in 2018. We don't like our rule as much as we did then, or the composition of our court has changed sufficiently so that we no longer have five votes in favor of that rule.” -David Swetnum-Burland [03:50]

Connect

In this episode of the SALTovation podcast, Meredith interviews Paul Miller, Vice President & Deputy Director of the ACMA, and David Swetnam-Burland, Partner at Brann & Isaacson. Both discuss the changes in tax regulations that have taken place after the Wayfair decision, the ACMA's mission, and the legal challenges that businesses face today. They also talk about the efforts being made to address the complications that arose after the Wayfair ruling, which led to a significant shift in sales and use tax obligations for remote sellers.

In this episode of the SALTovation podcast, we continue our conversation with Mike Bernard, VP of Tax Content and Chief Tax Officer at Vertex, a global provider of indirect tax software solutions. We examine the threefold increase in fee impositions within three years, underpinning the expectation of continued expansion in this domain. We also explore the burgeoning landscape of state and local taxation, where green fees, neighborhood assessments, and intricate policies intertwine with local economies and legislative nuances. Mike also shares insights on the future of sales and use taxes, the impact of commercial real estate devaluation, and the potential taxation of services. 

Topics discussed in this episode:

• There's been a significant increase in environment-related fees, which is reflective of a broader trend towards eco-conscious taxation.
• Fees are emerging as a preferred alternative to sales tax increases due to the ease of implementation and their transaction-based nature.
• Diverse new fees create operational and compliance challenges for businesses, requiring sophisticated tax software and calculated strategies.
• The sales and use tax is positioned to become more prominent in funding state budgets, especially considering economic downturn resistance and recovery.
• Professional services taxation complexity may continue to be addressed indirectly through audit practices, while explicit taxation of services remains a point of debate.

Quotables

• “Fees can be passed with relative ease. They're easy to audit because it's on normally a per-transaction basis. And so I think if you think about how local communities or local districts want to continue to raise revenue without raising the sales tax rate, these are going to be a significant portion of that. And I will tell you this, a lot of our customers are very aware of this and they want to make sure that at least we stay apprised of making sure that in our monthly data update, we get those fee positions updated with that as well, so that they're charging proper fees as well.” -Mike Bernard [01:43]

• “The devaluation of commercial real estate in the urban cores puts pressure on budgets. So you're seeing this massive kind of revaluation because people are either hybrid work or they're not having to go in five days a week. And so now these commercial buildings are being revalued. And so property tax revenues are starting to be greatly impacted.” -Mike Bernard [13:37]

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