If you work in my profession, you are likely aware of The Tax Foundation, the Multistate Tax Commission (MTC), the Council on State Taxation (COST) and the Streamlined Sales Tax Governing Board. However, were you aware of some of the resources they have?
History of Sales Tax
For example, I found this lovely webpage from the Multistate Tax Commission (MTC) which talks about the history of sales tax. https://www.mtc.gov/uniformity/sales-tax-on-digital-products/history/
According to the MTC, "this page is intended as background to aid in the review of the issues that arise when we consider a sales tax on digital goods. We begin by clarifying some of the terminology we use on this project, then move on to a brief history of the sales tax and some similarities and differences in how states treat the tax. You can use the links below to jump to a specific section."
I recommend you take a peek if you are looking for a quick and concise summary of the history of sales tax and basic terminology and some uniform rules shared by the states.
History of Indivual Income Taxes
The following link from the Tax Foundation provides a brief history of state individual income taxes. https://taxfoundation.org/data/all/state/when-did-your-state-adopt-its-income-tax/
The following link from the Tax Foundation provides additional insight into the history of state individual income taxes and the trend towards a flat tax rate structure. https://taxfoundation.org/blog/flat-tax-state-income-tax-reform/
Key State Tax Issues
The Council on State Taxation (COST) has several state tax resources. One of their webpages (https://www.cost.org/state-tax-resources/cost-policy-positions/) provides COST's policy positions regarding several key issues and areas of state taxation such as:
alternative apportionment
confidentiality of taxpayer informatoin
digital service taxes
financial reporting consequence of significant tax law changes
Gross Receipts Taxes
Independent Tax Appeals Tribunals
Mandatory Unitary Combined Reporting
Markeplace Facilitators Collection of Sales, Use or Similar Taxes
Property tax administration systems - fair and equitable
related company expense disallowance
Remedies for unconstitutional or otherwise judicially invalidated taxes
Reporting requirements for federal tax changes
retroactive tax legislation
sales taxation of business inputs
simplification of the sales, use or simliar transaction tax system
state corporate income tax filing methods
throwback and throwout rules
unclaimed property
Another COST webpage (https://www.cost.org/state-tax-resources/cost-studies-articles-and-reports/) provides links to COST studies, articles and reports on topics such as:
e-invoicing for sales tax
digital-business input exemptions
mandatory worldwide combined reporting: elegant in theory but harmful in implementation
COST scorecard: the best and worst of state tax administration
state digital services taxes: a bad idea under any theory
resisting the siren song of gross receipts taxes: from the middle ages to Maryland's tax on digital advertising
Remote Sellers and Marketplace Facilitators
The Streamlined Sales Tax Governing Board website has great sales tax information for sellers in general, but also specifically for remote sellers and marketplace facilitators.
Remote sellers - https://www.streamlinedsalestax.org/for-businesses/remote-seller-faqs
Marketplace facilitators - https://www.streamlinedsalestax.org/for-businesses/marketplace-facilitator
Marketplace sellers - https://www.streamlinedsalestax.org/for-businesses/marketplace-sellers
State Tax Climate, Trends and Maps
The Tax Foundation has a great page entitled, "Center for State Tax Policy" (https://taxfoundation.org/research/state-tax/) which has several articles and tools such as:
2024 State Business Tax Climate Index
State Tax trends
State Tax maps
State Reform guides
State and Local Tax collections
Excise Taxes
Taxes and Inflation
Cost Recovery
Be Aware
Regardless of whether you use any of these resources, you should be aware of these organizations that seek to provide support for taxpayers and/or influence state tax policy to create more uniformity and/or fairness among the states.
The "Mind-Field"
State taxation is ever changing and is influenced by many forces. Middle market companies struggle to stay on top of these changes and can't afford to litigate every matter or issue (that perhaps, should be challenged or raised by law firms as issues that should be challenged). Consequently, middle market companies are in constant need of clarity to reduce uncertainty, to mitigate risk of exposure and obtain practical solutions to navigate this "mind-field."
"Don't Burn your Popcorn"
As I've mentioned in other editions of this newsletter, the more I see artificial intelligence (AI) being used, the more I am convinced that the best "tool" or guide a company can have is human, real intelligence. The "easy button" or "microwave" may not be the most reliable tool.
Popcorn still gets burned in the microwave due to user error or incorrect correlations between the popping instructions and specs of the microwave. Don't burn your "popcorn."
Stay smart. Do the work. Don't settle.