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Online retailers that rely solely on third-party logistics providers like Amazon for tax compliance may still face tax liability for direct sales through their own websites.
Many states enacted marketplace facilitator laws in the years since the Supreme Court's 2018 ruling in South Dakota v. Wayfair, shifting tax collection responsibilities to platforms like Amazon or Walmart. But individual vendors can still face additional tax obligations because of direct sales, how their inventory is controlled, or state-specific sales thresholds.
As of October, most of the 24 states in the Streamlined Sales and Use Tax Agreement, which aims to simplify sales tax codes, said inventory in a third-party warehouse creates a physical nexus—a connection that triggers tax responsibilities. Rules vary even more outside the Streamlined pact. In New York, for instance, storage alone is sufficient for nexus, while in Arizona, inventory beyond a seller’s control likely doesn't.
Bloomberg Tax reporter Angélica Serrano-Román and Diane L. Yetter, founder of the Sales Tax Institute, discussed how businesses using third-party logistics services navigate tax compliance, the inconsistency in court decisions on who is liable for tax collection and remittance, and the contentious issue of retroactivity where states might seek uncollected taxes from before the Wayfair decision.
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A new White House administration and Republican-led Congress are slated to disrupt how the IRS operates.
Republicans' taste for cuts to the agency's annual appropriations and the tens of billions of added funding from the 2022 tax-and-climate law is putting the IRS and the Treasury Department on offense, as they make a case for why a well-funded IRS is good for everyone.
The Treasury Department has warned that further clawbacks would mean customer service—a bipartisan concern—as well as enforcement efforts, would take a hit.
Bloomberg Tax's Erin Slowey spoke with Charles Rettig, a shareholder at Chamberlain Hrdlicka, on why the IRS needs its funding and how a new commissioner could shake up the agency. Rettig, who served as commissioner during the first Trump administration, also addressed what he is telling his clients amid the uncertainty.
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Fuel producers are trying to prepare for a tax credit regime change, even though the Treasury Department has failed to issue rules around those credits.
The clean fuel production tax credit under Section 45Z takes effect next year, replacing a longstanding blenders credit. The new credit gives tax breaks to fuel according to its carbon intensity score. But the yet-to-be-released Treasury and IRS rules will explain how to calculate that score.
Debbie Gordon, leader of RSM US LLP's excise and energy tax practice, told reporter Erin Schilling on this week's episode of Talking Tax podcast that fuel producers are still trying to prepare for the new credit, even amid that uncertainty. It's unclear when the clean fuel production tax credit rules will come out, though a Treasury spokesperson said the Biden administration expects to put out some guidance before the administration change in January.
Many also are trying to push to start construction on clean fuel projects before the end of this year to qualify for the current credits. Gordon gives insight on what fuel producers are doing to safeguard their projects, how they're preparing for the new credit, and what the new administration means for the future of the credit.
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US companies are ramping up their efforts to lobby Congress on the international tax provisions they'd like to see in a comprehensive 2025 tax bill.
Among their priorities is retaining the current rates on foreign income, which were included in Republicans' 2017 tax law and are poised to increase in 2026.
But there are open questions about how lawmakers can pay for these extensions and make good on President-elect Donald Trump's domestic corporate tax proposals.
On this week's episode of "Talking Tax," reporter Lauren Vella sits down with Rohit Kumar, co-leader of PwC's National Tax Office, to discuss which international tax provisions could be addressed in a 2025 bill. He also offers insight into how companies are thinking about the 15% global minimum tax with Republicans taking full control of the White House and Congress.
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The re-election of Donald Trump and Republican sweep in Congress makes an extension of the 2017 GOP tax cuts more likely, but there will be hurdles.
Republicans want to use a fast-track process to move legislation—but that maneuvering comes with various rules and procedures.
Meanwhile, senators in the party elected John Thune (R-S.D.), a long-time member of the Finance Committee, to become majority leader in January, succeeding Sen. Mitch McConnell (R-Ky.) Thune's experience on the Finance panel when the law known as the Tax Cuts and Jobs Act was crafted could help smooth the process.
On this episode of Talking Tax, Bloomberg Tax Deputy Team Leader Kim Dixon and reporter Zach C. Cohen discuss the new GOP Senate leader and how the fast-track process known as reconciliation could play out when Republicans take power in Washington next year.
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The IRS is winning more cases in the US Tax Court over companies' valuation of intangible assets, such as patents and trademarks, through transfer pricing.
The wins have caught the attention of companies and practitioners as they mull the growing risks of transfer pricing, which governs transactions between related companies that are part of the same multinational group.
Disputes between the IRS and companies such as Coca-Cola and 3M have showcased the agency's newfound ability to audit their positions and win in Tax Court when challenged. Both cases are being appealed.
In addition, a new IRS policy to assess more penalties when documentation is lacking could make companies' transfer pricing positions much riskier than in the past, practitioners say, and taxpayers may have to start factoring that in.
In this week’s Talking Tax podcast, Bloomberg Tax reporter Caleb Harshberger spoke with Grant Thornton LLP Transfer Pricing Technical Leader Steve Wrappe and Greenberg Traurig LLP shareholder Sharon Katz-Pearlman about how the IRS has changed its approach and what additional funding from the 2022 Inflation Reduction Act means for taxpayers moving forward.
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The nation is unpacking what comes next with Donald Trump's second presidency and with a Senate that flipped from Democratic to Republican. One of the biggest questions that remains unanswered is how this impacts upcoming talks over myriad provisions in the GOP's signature 2017 tax law that expire at the end of 2025.
Idaho Republican Sen. Mike Crapo—no stranger to tax policy and negotiations—becomes chair of the Senate Finance Committee and will have a major hand in what happens with those expiring provisions that were part of the legislation known as the Tax Cuts and Jobs Act. Crapo is seen as a behind-the-scenes operator but his new role puts him at the center of talks to decide what to keep and what to jettison from a tax package that could have a price tag in the trillions of dollars.
A second Trump presidency also has implications for the IRS. Republicans have threatened to claw back supplemental IRS modernization funding, and have criticized the agency's focus on the Direct File program, offering free filing to certain taxpayers who qualify.
In this week's Talking Tax podcast, Bloomberg Tax reporters Erin Slowey and Chris Cioffi discuss what changes at the Senate Finance Committee, Trump's presidency, and new players in the landscape could mean for tax policy this year and into the next Congress. They spoke with Bloomberg Tax Deputy Team Lead for Federal Tax Kim Dixon.
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California regulators are prepared to walk away from strict licensing rules that require accountants to earn the equivalent of five years of college to qualify.
The California Board of Accountancy has proposed reforms that would grant the certified public accountant license to candidates with a traditional bachelor’s degree plus two years of work experience in addition to passing the CPA exam. The proposal would unwind current rules that call for 150 hours of college credits to qualify—a requirement that is seen as a barrier to entering the profession.
Instead, the board's draft legislation would strip the specific number of college credits from its rulebook to focus on the degree earned or the candidate’s coursework. State lawmakers would have to approve any changes.
Bloomberg Tax senior reporter Amanda Iacone spoke with Dominic Franzella, the executive officer of the state accountancy board, about how California's proposal matches up against related reforms the American Institute of CPAs introduced in September and whether the state’s plans could help address the shrinking pipeline of future accountants.
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Artificial intelligence is becoming a bigger part of tax practice and policy every day. The Big Four are spending billions of dollars on AI models, and even mid-tier accounting firms seem willing to at least tread into generative AI transformation, albeit slowly.
These investments raise questions about how corporate in-house tax departments are evaluating AI integration. In this special edition of Talking Tax, Bloomberg Tax Insights editor-at-large Rebecca Baker chatted with three different in-house tax leaders to hear their views on the emergence of AI in the profession, and in their lives.
While they all agree AI must be part of the conversation now, they have different takes on how it should be used—or if it should even be used at all.
Kurt Lamp, vice president of global tax at Amazon, is the most bullish on pulling AI tools into the corporate tax function, noting the ability to extract data and automate tasks. Jessica Reif-Caplan, legal principal in tax and business development at Edward Jones, takes a longer view on understanding functionality before moving to simplify. Then Sandhya Edupuganty, vice president of tax at Sabre Corporation, grapples with what can be gained from using AI and also what can be lost.
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The fate of the 2017 GOP tax overhaul is top of mind for corporations in the weeks leading up to the election.
Many of the law's provisions are expiring in 2025, setting Congress up to negotiate another major tax law. Corporations are closely watching what happens to bonus depreciation, interest expense deductions, and research and development expensing, S&P Global Rating Managing Director Shripad Joshi said. Plus, both presidential candidates have campaigned on changing the corporate tax, which the 2017 law permanently lowered to 21%.
Without knowing who will control the White House and Congress next year, it's difficult for corporations to plan ahead. Right now, they're reviewing tax proposals that may be considered and modeling how different scenarios could impact them. That means figuring out where their tax weaknesses lie and parsing out which changes could hurt or help cash flow the most.
On this episode of Talking Tax, Bloomberg Tax reporter Erin Schilling talks with Joshi about how corporations are dealing with this uncertainty and which tax policy changes will affect them the most.
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After more than two years, the Treasury Department has proposed rules to implement the new minimum tax on companies’ book income. Now comes the hard part.
The regulations, which Treasury issued last month, would govern how the corporate alternative minimum tax is applied and calculated. CAMT, enacted in 2022, requires big companies to pay at least 15% in taxes on the income they report on their financial statements—a crackdown on companies that have been able to pay little or nothing in the past by taking advantage of tax breaks and tax-planning strategies.
The proposed regulations run to more than 600 pages, and set up a highly complex regime for companies that fall under CAMT. Tax professionals and companies continue to pore over the rules, to see what kind of effects they’ll have.
Bloomberg Tax senior reporter Michael Rapoport spoke with Monisha Santamaria, a principal in KPMG LLP’s Washington National Tax practice about the complexity of the CAMT regulations; some notable aspects of the rules; how CAMT will affect more than just the 100 or so companies that Treasury says will have to pay it; and the chance for companies to persuade Treasury to revise its plans. -
The European Court of Justice's ruling against Apple Inc. over a $14.4 billion Irish tax bill stunned members of the international tax community, who said it throws the high court's precedent on tax state aid cases into disarray.
The EU high court ruled last month that the company's tax positions in Ireland, which were agreed to by Irish authorities in 1991 and 2007, amounted to illegal state aid. EU law stipulates that member states shouldn't give companies preferential treatment—state aid—over other businesses. Unlawful state aid could come in the form of preferential tax benefits.
The decision was particularly perplexing to tax observers because it didn't rely on rulings in similar, previous high-profile cases involving Fiat Chrysler or Amazon, where the ECJ sided with the companies rather than the European Commission.
This week, Bloomberg Tax reporter Lauren Vella chats with University of Virginia professor Ruth Mason and Stephen Daly, reader in tax law at King’s College in London, who say that there is a possibility companies with structures similar to Apple aren't safe from EU probes into their tax positions. They also discuss what effect the decision could have on the court's reputation and the European Commission's power to investigate tax matters.
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The Multistate Tax Commission dates to the 1960s, yet the intergovernmental tax agency and its mission on behalf of state revenue departments are often not well understood. The map of tax laws and regulations across the 50 states would be much more complicated and inconsistent without the efforts of committed attorneys, auditors, and administrators working on behalf of the commission.
On this episode of Talking Tax, Bloomberg Tax senior reporter Michael J. Bologna discusses the MTC's goals and achievements with former general counsel Nancy Prosser, who retired Sept. 24. Prosser talks about the agency’s essential mission to promote uniform and consistent tax policies across the states, and assist taxpayers in achieving full compliance. She also stresses the MTC’s efforts to advocate for state and local sovereignty in the development of tax policy.
Prosser retired after four years as general counsel and a 16-year career in tax administration with the Texas Comptroller for Public Accounts, including two years as the Texas tax agency’s general counsel. In the interview, Prosser also talks about her career in state tax administration and her hopes for improved state tax uniformity going forward.
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The GOP's 2017 tax law—the biggest change in the US tax code in three decades—left a mammoth task for the IRS and Treasury Department.
It resulted in the Treasury and a severely underfunded IRS creating the blueprint for taxpayers and tax practitioners trying to follow the law, releasing over 200 pieces of formal guidance and more than 300 pieces of informal guidance.
Many of these provisions are set to expire next year and face an uncertain fate as the November election approaches with control of the House and Senate in play.
Dave Kautter, a partner at RSM US LLP, spoke with Bloomberg Tax reporter Erin Slowey on his time as the Department of Treasury's assistant secretary for tax policy and acting IRS commissioner during that major tax code overhaul. He also spoke about the agencies' role in policy making and how they can prepare for changes in 2025—if at all.
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Rep. Brad Schneider (D-Ill.) likes to be prepared.
Schneider and fellow House Democrats are getting behind-the-scenes briefings that started this summer to bone up on their tax policy knowledge ahead of what's likely to become a big battle in 2025. The Illinois Democrat is a member of the tax-writing Ways and Means Committee and he's running to lead the influential New Democrat Coalition.
The hope, he said, is to find agreement on tax policy that will be permanent so lawmakers don't once again find themselves addressing provisions such as pieces of the 2017 GOP-led tax law that expire next year.
Schneider, a critic of the state and local tax deduction cap, said he's optimistic that lawmakers can come together on policy areas ranging from global tax to the child tax credit.
On this edition of Talking Tax podcast, Bloomberg Tax reporter Chris Cioffi talks with Schneider about the upcoming talks over expiring provisions in that 2017 tax overhaul and other priorities.
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Lawmakers return to Washington next week for the final sprint of legislating before the November elections, on the heels of a failed tax bill vote, and with an appropriations deadline fast approaching.
Congress will be under pressure in the next few weeks to reach a deal on government funding to avoid a shutdown on Sept. 30. The Democratic-controlled Senate is set to clash with the GOP House over whether to slash IRS funds or keep them steady, though with so little time left in session lawmakers will likely use a short-term continuing resolution to punt the fight.
Also up in the air is whether tax writers will come back to the negotiation table on the $78 billion bipartisan tax package that failed to clear a procedural vote in the Senate just before the August recess. Some lawmakers already are attempting to peel off parts of that tax package—including disaster tax relief and an expansion to the low-income housing tax credit—and it's unclear if those efforts will heat up in September or the lame-duck session.
On this episode of Talking Tax, Bloomberg Tax congressional reporters Chris Cioffi and Samantha Handler discuss the weeks ahead in Congress, and how lawmakers are preparing for the 2025 tax cliff.
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The market for clean energy tax credits has been booming, with demand and supply skyrocketing since the 2022 tax-and-climate law established new credits and launched a way for energy developers to easily sell those credits to investors.
A midyear report by the energy tax marketplace Crux forecasts that energy tax credit transfer deals could total between $20 billion and $25 billion this year, while financial services firm Evercore ISI estimates that more than $100 billion in transferable credits will be generated annually by 2030.
Still, risks remain around certain energy tax credits that have yet to see final rules from the Treasury Department, and 2025 will bring additional changes, including the launch of so-called "tech-neutral" credits that aren't tied to any one piece of technology.
On this episode of Talking Tax, Bloomberg Tax reporter Caleb Harshberger talks to Crux CEO Alfred Johnson and Hannah Hawkins, principal at KPMG, about how the new market for these credits is developing and what uncertainty remains.
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When Microsoft Corp. won a $94 million income tax refund from the California Office of Tax Appeals in February, it was considered one of the biggest victories for corporate taxpayers ever in California. Now it’s unclear if Microsoft will get that refund, or if other multinationals with similar claims will either. A law passed in June reversed the ruling upholding Microsoft’s refund, and the first two lawsuits challenging the reversal landed last week.
The intent of the new law (S.B. 167) is to avoid $1.3 billion in refunds to companies with similar claims pending for past tax years and $200 million a year in refunds going forward. The law does this by declaring that the California Franchise Tax Board’s position in Microsoft’s case pertaining to the tax treatment of income repatriated from abroad has been law since it issued a legal notice on the subject in 2006.
The newly filed lawsuits from the California Taxpayers Association and National Taxpayers Union make it unclear when the dust will settle.
On this episode of Talking Tax, Bloomberg Tax senior correspondent Laura Mahoney talks to Gina Rodriquez and Josh Booth, principals in the Sacramento office of global tax services firm Ryan LLC, about what the tax changes mean for other multinationals and for California.
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Ernst & Young LLP is developing a generative AI tool for tax professionals that's meant to automate repetitive data work and make tax planning more efficient.
The Big Four company is investing $1.4 billion into gen AI globally. Other Big Four firms have made similar pledges. The investments are in part a bet that the technology can fill in some gaps from the longstanding accounting shortage.
But implementing the technology in tax departments is difficult, in part because of how often policies change and the vast amount of data. Daren Campbell, leader of EY Americas Tax Technology and Transformation team, gave Bloomberg Tax an inside look at how his team seeks to overcome these challenges, where the technology is today, and what's next.
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Nearly 75% of cannabis businesses operate at a loss, and many in the industry point to a feature of the Internal Revenue Code as the reason why.
Cannabis companies are prohibited from deducting ordinary business expenses—like rent or payroll—from their federal taxes as long as marijuana remains under the most restrictive portion of the Controlled Substances Act.
That could change if marijuana is moved from Schedule I to Schedule III of the act, as the Biden administration has proposed. But in the meantime, 22 states plus Washington, D.C., have allowed medical or recreational cannabis businesses to take some deductions on their state returns, by decoupling their tax codes from Section 280E of the Internal Revenue Code, which imposes the federal ban. Pennsylvania was the most recent to make that change with a state budget adopted last month.
In this episode of Talking Tax, Bloomberg Tax reporters Angélica Serrano-Román and Owen Racer talk about their recent look into how states are increasingly decoupling their tax from 280E at the state level.
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