SALTovation: Navigating the Complexities of State and Local Tax by Aprio

In this episode of the SALTovation podcast, Meredith Smith, and Tram Le talk with Dan DeLau, a founding partner of TaxOps, and Professor at the School of Business at Colorado Christian University, with decades of domestic and international experience in accounting. DeLau and the team discuss why the number of students enrolling in accounting is down, what that means for businesses, and the future of the accounting profession.

They also talk about how globalization has created complexities in accounting and tax laws, and the additional requirements it places on smaller organizations.

Topics discussed in this episode:

1. How globalization and the internet have changed tax laws
2. The decline in accounting enrollment over the past 30 years
3. Present-day hurdles to excelling in accounting and tax law

What You Will Learn:

1. [01:44] Daniel DeLau on globalization
2. [07:35] Complexities in the accounting profession
3. [13:10] State-by-state requirements for obtaining an accounting degree

Quotables:

1. “There are a majority of reasons we have seen a decline in the profession over the last twenty to thirty years. One of them is if you look at the traits of a good accountant they have good time management skills, pay attention to detail, and have good organizational skills. Those are the same traits that are important for someone who wants to focus in computer information systems.” - Daniel DeLau [09:13]
2. “In finance and data analytics students don’t need that extra year of education. In Texas, we require one hundred and fifty hours, but in most states candidates need one hundred and twenty hours to sit and take the accounting exam. It is another big hurdle.” - Tram Le [12:38]
3. “I have to put on my sales hat and entice students to pull the trigger on an accounting major today. I talk to them about the benefits associated with the profession but many of them ultimately have those critical thinking skills you need and they just get it. It is like a puzzle to them and they enjoy solving it.” - Daniel DeLau [14:19]
4. “I think when you are younger people talk about different careers. But in terms of becoming an accountant, I feel I was recruited by my advisor in undergrad who was an accounting professor. He encouraged me to take this path and I’m not sure I would be in this field if it wasn’t for career mentorship.” - Tram Le [15:48]

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Talk To A Tax Advocate Today

TaxOps Website: https://taxops.com/contact/

Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

Mentioned in this episode:

Schedule a Call with the Aprio Team Now!

Introductory Call

In this episode of the SALTovation podcast, Alex Korzhen, Tram Le, Meredith Smith and Stacey Roberts discuss how companies are increasingly agnostic about hiring as they gain trust and confidence in their remote workforces. This is giving employees more freedom to move about and creating some interesting tax ramifications when either employees fail to tell their employers they are on the move or interdepartmental communications fail. The employer may not even hear about an employee move until tax issues arise.

Learn what happens when employee and internal communications fail to account for employees on the move, and what it looks like when they do.

Topics discussed in this episode:

• Navigating the internal communications ecosystem 
• The differences between a VDA and VCA
• State-by-state income tax ramifications

What You Will Learn:

• [01:44] Client story: Voluntary Compliance Program
• [06:49] Sales tax by state 
• [10:01] Data mining within departments 

Quotables:

• “Recruiting, HR, IT, Finance, and Tax all have regular business activities as part of their daily function and they make decisions that affect state tax obligations. If those decisions are made without the proper steps being taken to get some sort of governmental or departmental licensure, then one department will begin to data mine another.” - Alex Korzhen [09:17]
• “As we have come out of covid, companies are still barely agnostic about where they hire and allow employees to move around, whether they know it or not. That is where issues arise. Payroll is maybe not getting notified about it until that person goes to file their return. Unfortunately, some companies are behind the eight ball on that. - Stacey Roberts [04:40]
• “The sales department does a disservice to the finance and accounting department because they either don’t get the right information to charge the right tax in the right jurisdiction, or the right tax at all. It screws up the sourcing for many things.” - Tram Le [08:00]
• “It is not just payroll we have to worry about. We have to worry about the income tax and the sales tax. Payroll can be messy but finance needs to work with us to make sure all the accounts and files are set up properly. It is a domino affect.” - Meredith Smith [08:40]

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https://saltovation.captivate.fm/listen

https://linktr.ee/taxops 

Follow Us on Socials

https://www.linkedin.com/company/taxops-llc

https://www.youtube.com/channel/UCMB1ZQNGXM_F777SIEl8Vjw 

Talk To A Tax Advocate Today

TaxOps Website: https://taxops.com/contact/

Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

In this episode of the SALTovation podcast, we talk about voluntary disclosure agreements and why you would want to recommend them to a client. Alex Korzhen, Tram Le, and Meredith Smith discuss how a VDA can be an efficient self-audit that is cost-effective. They also discuss how to evaluate the pricing of the VDA process and consult with your clients, if it is determined a voluntary disclosure agreement is necessary.

Topics discussed in this episode:

• The VDA process and determining the value of them for clients
• How VDA’s are priced state to state

What You Will Learn:

• [00:49] Defining a VDA
• [05:54] How to advise clients
• [09:40] Working on a state-by-state basis

Quotables

• “A VDA is a legal agreement that provides documentation that says I took my taxes seriously so I can provide this in due diligence in funding, in acquisition activity. So we do a lot of clean up and remediation as a result of due diligence.” - Meredith Smith [02:47]
• “States are much easier to deal with under a VDA scenario than if they caught you if you received a nexus questionnaire or if you are being audited. It is not hostile but there is this undertone of “Gotcha!”. So you either approach on your terms or you are reviewed on their terms. ” - Alex Korzhen [04:06]
• “The cost of a VDA, to negotiate that agreement as well as provide that self-audit to a state, pretty much pays for itself. I think that is a great reason for a client to do it.” - Tram Le [04:50]
• “Determining if a VDA is worth it depends on the process at the state level or local jurisdictions. I think it really depends on what that process entails. Are we having to fill out a ton of forms or provide a narrative? The timing factor plays a big role as well. If we are dealing with bad data we can’t do the self-audit efficiently. ” - Tram Le [06:00]

Subscribe on your favorite podcast app:

https://saltovation.captivate.fm/listen

https://linktr.ee/taxops 

Follow Us on Socials

https://www.linkedin.com/company/taxops-llc

https://www.youtube.com/channel/UCMB1ZQNGXM_F777SIEl8Vjw 

Talk To A Tax Advocate Today

TaxOps Website: https://taxops.com/contact/

Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

Mentioned in this episode:

Schedule a Call with the Aprio Team Now!

Introductory Call

In the second episode of a two-part series, we continue our conversation with Paul Williams, Senior Tax Correspondent at Law 360, and our own Judy Vorndran. Paul discusses boomerang issues, which are when old concepts get new life in the court system, and trending issues across the nation.

Topics discussed in this episode:

• Halstead Bead’s case in Louisiana and other cases related to home rule cities
• Wayfair’s lawsuit against Lakewood for a $600K sales tax bill

What You Will Learn:

• [00:26] Halstead Bead’s case in Louisiana and home rule jurisdictions
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• 
  
• [07:27] Wayfair’s lawsuit against Lakewood
• [11:02] Trends from a litigation perspective

Quotables:

• “There’s a push and pull there is to how much power the local governments wanted to retain for the local tax collection versus what the sponsors thought that the state may need to do is what some would argue to comply with Wayfair.” - Paul Williams [02:53]
• “It’s very interesting how we’ve given this authority to the locals, which I appreciate why they need it. I appreciate why our states need authority, because the federal government doesn't give them enough money, but it does create a lot of complexity in tax compliance.” - Judy Vorndran [06:04]
• “When you look at both Wayfair’s case now and the Halstead Bead case, it does bring up the question of to what extent, if any, do home rule jurisdictions… what are limitations to their authorities potentially or what burdens can varying local rules create for companies that just want to comply with the Wayfair decision?” - Paul Williams [07:34]
• “Since Wayfair came down, and different practitioners we’ve talked to and different tax conferences we’ve reported on, practitioners have raised the question as to whether or not Wayfair gave local governments the authority to also impose economic nexus for sales and use tax.” - Paul Williams [08:17] 

Relevant Links:

Paul Williams on Law360: law360.com/tax-authority/search?q=reporter:%22Paul+Williams%22

Paul Williams on LinkedIn: linkedin.com/in/paul-williams-56183567

Subscribe on your favorite podcast app:

https://saltovation.captivate.fm/listen

https://linktr.ee/taxops 

Follow Us on Socials

https://www.linkedin.com/company/taxops-llc

https://www.youtube.com/channel/UCMB1ZQNGXM_F777SIEl8Vjw 

Talk To A Tax Advocate Today

TaxOps Website: https://taxops.com/contact/

Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

Mentioned in this episode:

Schedule a Call with the Aprio Team Now!

Introductory Call

In the first episode of a two-part series, we talk with Paul Williams, Senior Tax Correspondent at Law 360, and our own Judy Vorndran. Paul talks about how he selects which newsworthy topics to cover in the state and local tax universe. He also discusses boomerang issues, which are when old concepts get new life in the court system, and trending issues across the nation.

Topics discussed in this episode:

• How Paul determines what to report for Law360
• Zilka v. Tax Review Board City of Philadelphia and why Paul felt this case was worth following

What You Will Learn:

• [00:44] Paul’s initial thoughts on covering SALT
• [02:16] The hardest concept to grasp
• [04:59] How Paul determines what to report on
• [11:35] Zilka v. City of Philadelphia’s Tax Review Board 

Quotables:

• “I learned very quickly that there’s a lot here in the state and local tax world, and I had to hit the ground running and get up to speed as quickly as I could.” - Paul Williams [01:59]
• “At the end of the day, it just comes down to news judgment as well.” - Paul Williams [06:20]
• “There’s a large volume out there, but we do spend a good amount of time trying to track those to the extent we can, just to see as soon as something moves again. Maybe it’s picked up interest in the legislature.” - Paul Williams [08:41]
• “It had a lot of elements there that just seem really newsworthy, and certainly we’re dealing with a lot of complex multistate issues that the other taxpayers or tax practitioners are following.” - Paul Williams [14:32]

Relevant Links:

Paul Williams on Law360: law360.com/tax-authority/search?q=reporter:%22Paul+Williams%22

Paul Williams on LinkedIn: linkedin.com/in/paul-williams-56183567

Subscribe on your favorite podcast app:

https://saltovation.captivate.fm/listen

https://linktr.ee/taxops 

Follow Us on Socials

https://www.linkedin.com/company/taxops-llc

https://www.youtube.com/channel/UCMB1ZQNGXM_F777SIEl8Vjw 

Talk To A Tax Advocate Today

TaxOps Website: https://taxops.com/contact/

Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

Mentioned in this episode:

Schedule a Call with the Aprio Team Now!

Introductory Call

In the second episode of a two-part series, Meredith Smith and Stacey Roberts, from TaxOps’ SALTovation Team, continue their conversation with Michael Cataldo, of Cataldo Tax Law in California. Michael continues to share his insight on the publications released by the Franchise Tax Board, that discuss sales of services and market-based sourcing in California. He also talks about some of his favorite cases outside the state.

Topics discussed in this episode:

• Recent ruling regarding California’s sales of services and market-based sourcing
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• 
  
• California’s most recent ruling on sales of service
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What You Will Learn:

• [00:28] California’s policy on alternative proportment
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• 
  
• [01:51] Sales of services in California
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• 
  
• [09:51] Michael’s favorite cases outside of California
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• [15:05] Retroactive tax laws
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• [19:05] What creates nexus
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• 
  
• [21:06] Regulations on market-based sourcing
• 
  

Quotables:

• “It’s very hard to articulate exactly what was going on, what they’re doing. You have to do a lot of reading between the lines, see what they’re trying to do.” - Michael Cataldo [02:21]
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• 
  
• “The things I get interested in is where’s this going from here? And it takes a long time for things to develop in the state and local tax world to where this is going.” - Michael Cataldo [11:29]
• 
  
• 
  
• “Technology is moving so fast and what’s not going online. There’s going to be some challenges for them to figure out how to comply.” - Michael Cataldo [14:27]
• 
  
• 
  
• “But the constitution applies to all the states, so these constitutional arguments apply to all of them.” - Michael Cataldo [20:11]
• 
  

Relevant Links:

Cataldo Tax Law: cataldotaxlaw.com

Michael Cataldo on LinkedIn: linkedin.com/in/michael-cataldo-aaa9205/

Subscribe on your favorite podcast app:

https://saltovation.captivate.fm/listen

https://linktr.ee/taxops 

Follow Us on Socials

https://www.linkedin.com/company/taxops-llc

https://www.youtube.com/channel/UCMB1ZQNGXM_F777SIEl8Vjw 

Talk To A Tax Advocate Today

TaxOps Website: https://taxops.com/contact/

Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

Mentioned in this episode:

Schedule a Call with the Aprio Team Now!

Introductory Call

In the first episode in a two-part series of the SALTovation podcast, Meredith Smith and Stacey Roberts, from TaxOps’ SALTovation Team, speak with Michael Cataldo, of Cataldo Tax Law in California. Michael shares his insight with his experience on Franchise Tax Board, public accounting and private law on the publications released by the Franchise Tax Board. He also talks about tax issues and cases related to Public Law 86-272 and business versus non-business income.

Topics discussed in this episode:

• Current issues discussed by Franchise Tax Board including market-based sourcing and multi-state practice
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• 
  
• Business vs. non-business income and what qualifies as doing business in the state
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• Public Law 86-272 and alternative proportment
• 
  

What You Will Learn:

• [00:57] An introduction to Michael Cataldo
• 
  
• 
  
• [03:21] Current tax issues
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• [10:20] Business vs. non-business income
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• [17:55] What qualifies as doing business in the state
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• [22:05] Interpreting Public Law 86-272
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• [29:28] The procedure for alternative proportment
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Quotables:

• “Over the years, there’s been this sort of gradual shift where my clients used to be mainly located in California, and now more and more of them are located outside the state.” - Michael Cataldo [04:09]
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• 
  
• “It used to be a little more debatable and it’s still not completely decided, but is it business or non-business income? You have to look at that question.” - Michael Cataldo [11:38]
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• 
  
• “Trying to explain that concept of business income vs. non-business income to the unknowing, it’s like ‘But I’m not in the business of selling land.’ But ‘Ok, fine, but did you use that land in order to create your other business income?’ It’s almost a given that if you call something non-business income, you will be audited. Like 100%” - Meredith Smith [14:03]
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• “These issues come all the time and there is room to argue about it. Now California has their rule and regulation on substantial and unusual sales are thrown out of the sales factor but the income is still in there. The question is ‘Hey, is this a fair reflection of income?’ Sometimes it’s not.” - Michael Cataldo [17:00]
• 
  

Relevant Links:

Cataldo Tax Law: cataldotaxlaw.com

Michael Cataldo on LinkedIn: linkedin.com/in/michael-cataldo-aaa9205/

Subscribe on your favorite podcast app:

https://saltovation.captivate.fm/listen

https://linktr.ee/taxops 

Follow Us on Socials

https://www.linkedin.com/company/taxops-llc

https://www.youtube.com/channel/UCMB1ZQNGXM_F777SIEl8Vjw 

Talk To A Tax Advocate Today

TaxOps Website: https://taxops.com/contact/

Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

In this episode, Meredith Smith and Connie Zoerink, from TaxOps’ SALTovation Team, share their thoughts and key takeaways on Colorado’s Retail Delivery Fee after attending a meeting with the Department of Revenue. The delivery fee that retailers must collect for any deliveries by a motor vehicle in Colorado goes into effect on July 1.

Subscribe on your favorite podcast app:

https://saltovation.captivate.fm/listen

https://linktr.ee/taxops 

Follow Us on Socials

https://www.linkedin.com/company/taxops-llc

https://www.youtube.com/channel/UCMB1ZQNGXM_F777SIEl8Vjw 

Talk To A Tax Advocate Today

TaxOps Website: https://taxops.com/contact/

Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

Mentioned in this episode:

Schedule a Call with the Aprio Team Now!

Introductory Call

In this episode of the SALTovation podcast, we speak with Jaye Calhoun, a partner in the New Orleans office of Kean Miller, about some of the challenges businesses face when dealing with state and local tax. They discuss some of the current constitutional amendments and bills advancing through the state legislature and how it could potentially affect taxpayers. Jaye also shares how her broad exposure to many tax organizations has influenced the issues she chooses to dig into as an attorney.

Topics discussed in this episode:

• How state and local tax issues impact taxpayers who do business in Louisiana
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• 
  
• What it means to be a remote seller
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• The current constitutional amendment on the ballot called The Louisiana Adjustment of Ad Valorem Tax Rates Amendment
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• The bill advancing through the state legislature that deals with the interest on payments made under protest
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• The leadership position Jaye has held
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• What tax issues to look out for in the future
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What You Will Learn:

• [04:56] How SALT issues impact Louisiana businesses
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• [08:01] Louisiana’s version of uniformity
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• [15:12] City rate differentials
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• [15:43] What are remote sellers 
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• [18:18] How big companies handle home rule city taxes
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• [23:31] The bill that deals with payments made under protest
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• [30:33] Why Jaye likes to the collaborate aspect of tax practice
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• [37:53] The leadership positions Jaye has held
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• [44:18] Tax issues to watch out for
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Quotables:

• “The real issue that you face when you deal with Louisiana and the sales and use tax area, is that the parishes each get to independently administer and collect their own taxes. So, you don’t really have one centralized collector.” - Jaye Calhoun [05:46]
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• “We don’t want people gaming the system, essentially paying and then we have to pay them back with interest later, but you’re not investing with the tax collector….I can’t even imagine a client coming to me saying, you know, I looked at options in the market and I think I’m going to go invest with the tax collector.” - Jaye Calhoun [27:56]
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• “So we as TaxOps are actively engaged in this Colorado tax auditor coalition….They don’t want to be the bad guy. They want to teach people to do the right thing. But at the same time, they’re there to  collect money for their cities, but it is a lot of like open sharing information resources..So there is a lot of collaboration and inviting in.” - Meredith Smith [32:08]
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• “I think the federal government does a really good job of educating the public as to what the rules are. They do the enforcement, they do the collection, but they understand their mission to educate as well. As Meredith was saying, departments don’t have a lot of money now, but maybe that is where your tax bar or professional organizations can help.” - Jaye Calhoun [34:57]
• 
  

Relevant Links:

Jaye Calhoun at Kean Miller: https://www.keanmiller.com/jaye-a-calhoun.html

Jaye Calhoun on LinkedIn: https://www.linkedin.com/in/jaye-calhoun-8b9b459/

Subscribe on your favorite podcast app:

https://saltovation.captivate.fm/listen

https://linktr.ee/taxops 

Follow Us on Socials

https://www.linkedin.com/company/taxops-llc

https://www.youtube.com/channel/UCMB1ZQNGXM_F777SIEl8Vjw 

Talk To A Tax Advocate Today

TaxOps Website: https://taxops.com/contact/

Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

Mentioned in this episode:

Schedule a Call with the Aprio Team Now!

Introductory Call

In the second episode of a two-part series, we continue our conversation with Leah Robinson, an attorney and state and local tax partner with Mayer Brown in New York. Leah continues to discuss some of the most interesting tax cases she has litigated, her thoughts on what could be deemed government overreach, and where she has seen some recent state auditor “gotchas” that we should all be aware of.

Questions asked and answered in this Episode:

• How Leah approaches each case
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• 
  
• After being at the IRS and then representing clients against the state, how does she feel about the mentality with the IRS and the state?
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•  Where she sees government overreach beyond what is allowable under the constitution
• 
  

What You Will Discover:

• [00:24] How Leah decides how to approach each case
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• [02:38] The mentality between the IRS vs the state
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• [06:24] Looking how a product functions from a tech point of view
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• [10:27] Examples of overreach
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• [15:09] Where she sees government overreach
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• [28:06] An interesting thing about the compliance effort
• 
  

Quotables:

• “There definitely are cases where we want an answer. We need the answer, and if we can have a settlement that also gives us a going forward answer, fine, but you can’t always get that.”- Leah Robinson [01:57]
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• “And I get it. The business folks in a company want to describe themselves a certain way. They want to appeal to their client base, but that doesn’t mean that that’s what the technology really is doing.”- Leah Robinson [06:45]
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• “I think post-Wayfair, there’s been an assumption that economic nexus is the end of the story.”- Leah Robinson [15:45]
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• “I still think physical presence is an easier standard, and cookies, even though they are intangibles, they still take up space, right? My hard drive has a limited amount of space. So even things that are intangible like software, they still take up space on the server, on a hard drive, etc.”- Leah Robinson [25:35]

Subscribe on your favorite podcast app:

https://saltovation.captivate.fm/listen

https://linktr.ee/taxops 

Follow Us on Socials

https://www.linkedin.com/company/taxops-llc

https://www.youtube.com/channel/UCMB1ZQNGXM_F777SIEl8Vjw 

Talk To A Tax Advocate Today

TaxOps Website: https://taxops.com/contact/

Production Support

This episode was produced with support from Truth Work Media. www.truthworkmedia.com

Mentioned in this episode:

Schedule a Call with the Aprio Team Now!

Introductory Call