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Wayne Berkowitz CPA, J.D., LL.M.

Wayne Berkowitz CPA, J.D., LL.M.
Wayne Berkowitz, a tax partner and head of the State and Local Tax Group at Berdon LLP, advises on the unique requirements of governments and municipalities across the nation.
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SALT TALK:  NY Governor Disdains Humble Pie as Evidenced by Budget Proposal Thirty Day Amendments

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Feb 19, 2018 11:58:17 AM

I like Humble Pie, the band that is. They were always considered to be the rock and rollers rock and rollers. Once I read Governor Cuomo’s thirty day amendments to his recently released budget proposals, I couldn’t get their song, Thirty Days in the Hole to stop resonating between my ears.

The Governor apparently doesn’t like humble pie. Not the band, but the kind defined by most dictionaries as “a figurative serving of humiliation usually in the form of a forced submission, apology or retraction.” Apparently he is serious about pushing back at the injuries inflicted upon New Yorkers and other high tax jurisdiction taxpayers by the recently enacted federal cap on deducting state and local taxes. While the New York State Tax Department recently issued a report addressing the perils faced by New Yorkers from the Federal Tax Cuts and Jobs Act (see my January 22, 2018 post), Governor Cuomo has gone from report to proposal in no time at all.

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SALT TALK: Sales Tax Planning Allows Building Boxes More Efficiently

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Feb 12, 2018 11:24:34 AM

Ask any accountant and they will tell you how tired they are of the stereotype that we are math geniuses. You don’t need to be a geometry expert to help a client make his/her idea a reality.   You do need the ability to listen carefully to the plan and use your knowledge and experience to implement it in the most efficient way.

Case in point: a client came to us looking to achieve the maximum benefit from the sales tax exemption that virtually all states grant to the construction of a capital improvement.

While most are aware that capital improvement projects are generally “exempt” from sales tax, most don’t understand that in virtually all circumstances, someone still pays the tax on the materials incorporated into the project. Contractors should almost never buy materials for resale. They pay tax on their purchases and build it into the price they charge the customer.

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SALT TALK:  They’re Here! – New York Governor Releases Fiscal Year 2019 Budget Proposals

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Feb 5, 2018 9:18:00 AM

Anyone who has seen the 1982 supernatural horror film Poltergeist certainly remembers four-year-old Carol Anne sitting up in bed and staring at the static filled TV screen acknowledging the arrival of her supernatural visitors by uttering the most well-known phrase from the movie, “They’re here!”  While no one would ever accuse our lawmakers of being supernatural beings, Governor Cuomo’s 2019 Budget Proposals are certainly responsible for “physical disturbances such as loud noises and objects thrown around the room.”

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SALT TALK:  Sticks, Stones and Why Did the Accountant Cross the Road?

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Jan 29, 2018 11:40:00 AM

Because that's what she did last year.  Yes lawyers, accountants get insulted too, and the worst insult that can ever be hurled at us is to be called a business historian.  Or at least that's what I used to think. Cutting edge ideas are great.  But who is going to help you decide when you've gone over the edge? That's right, it's us.

Based on my historical observations, tax cases often end up in court for one of two reasons:  Either someone had a cutting edge idea the taxing authorities didn't like, or someone took a bleeding edge position (knowingly or not) and is now backed into a corner.  Sometimes the taxpayer is lucky enough to get out of the corner, but as most lawyers know (I'm one as well so I get twice the insults), bad facts make bad law, sometimes overturned on appeal, but always making headlines (not of the NY Times variety but more along the lines of State Tax Notes).

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SALT TALK: NY Tax Department Fights Back – Comprehensive Report Offers Alternatives to Make New Yorkers Whole

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Jan 22, 2018 9:25:00 AM

A lot of things I thought would never happen, have. While some of this might be attributable to a lack of foresight, I’m convinced most of it has to do with the natural process of just getting older. I never wanted to believe that federal tax reform would severely restrict the deductibility of state and local taxes and was waiting for some heroic legislator to swoop in at the last minute and eliminate this provision from the final legislation. But it never happened.

Fortunately, the New York State Tax Department, in its “Preliminary Report of the Federal Tax Cuts and Jobs Act[1]” has proposed some courageous and creative solutions to Governor Cuomo. 

Listening to news radio was the first I heard of the Preliminary Report. And I have to admit, I had a good laugh at the expense of the Tax Department and the Governor. After all, who is going to make a charitable contribution to the State of New York? But after delving into all thirty seven pages, I have to admit that while the three pillars of the proposal push the envelope, this is exactly what is needed to keep New York taxpayers on an even keel with the rest of the nation. 

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SALT TALK: New York Enacts Incentive for Home Savings (I Think)

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Jan 15, 2018 11:40:00 AM

The music metaphor of the week takes me back to my high school swim team days. For Saturday practice only, our coach would let us bring in a record album of our choosing, which he would play over the public address system while we swam laps. The only catch, and it was a big one, was that if he didn’t like the music, the album would be dropped into the pool and its owner would have to retrieve the soggy vinyl from the deep end. I’ll never forget when the Cars first album was released in 1978 and “All Mixed Up” was blaring over the PA system. Shortly thereafter, one of my teammates was descending to retrieve his record.

So, I couldn’t help being all mixed up on the enactment of New York State’s brand new home savings incentive. You see, apparently the legislation was signed, sealed, and delivered in December of 2017, only to be postponed by another piece of legislation earlier this month requiring that “The Division of Housing and Community Renewal shall issue a report with detailed recommendations and findings to the governor . . .” 

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SALT TALK: Back to School, Back to Residency Issues

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Jan 8, 2018 11:30:00 AM

We all knew it was going to happen. It’s a little less light when we get up in the morning; the kids will be home from camp soon (very soon, remember when Summer camp was really for the Summer, not just seven weeks or less); and our vacation rentals will be coming to an end. I inevitably start to think of humorous school-related anecdotes to ease the transition. 

One of my favorites is straight out of the Rodney Dangerfield movie, Back to School. Mr. Dangerfield plays a well-seasoned, millionaire businessman who barely graduated high school but returns to college with his son. During his first economics class, Mr. Dangerfield asks the professor to explain exactly what a widget is. The professor annoyingly answers that it just doesn’t matter.  Mr. Dangerfield quickly snaps back, “Tell that to the bank.”

My other favorite anecdote comes from personal experience. During my first year of law school, more than two thirds of the way through our first semester of criminal law, our professor posed a question to one of my fellow students. She had no idea what the answer was, so the professor snapped back that she should try looking in her copy of the New York Penal Code. Without hesitation, she removed the Penal Code from her book bag and proceeded to unwrap it in front of the entire class.

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SALT TALK: Written in Reverse – Federal Tax Overhaul and Impact on the States

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Jan 2, 2018 9:17:00 AM

I'm writing this to you in reverse . . . No nothin' was planned . . . I've seen you blankly stare . . . I can see it all from here . . . From just a few glimpses . . . Now that lightbulb's gone off . . .

I apologize for the reference so soon again, to the band Spoon, but with just a little rearranging of the lyrics to their song “Written in Reverse, “ it becomes apparent to me that back in 2009 they must have been anticipating what state tax practitioners would be thinking upon the next major overhaul of the Internal Revenue Code.

While all of the questions and issues raised by the new federal tax law’s impact are a long way from being answered, I wanted to provide my readers with a preliminary and far from all-inclusive list of potential state and local issues we all need to start thinking about now.

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SALT TALK: State Tax Debts - Don't Believe Everything You Read

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Dec 18, 2017 11:40:00 AM

This week’s post is unusual in that it takes us to two very disparate points in time: The first being sometime last week, and the second being the third grade. This week, one of my clients received a “Notice of Intended Federal/NJ State Offset.” It’s a good thing I paid careful attention to my third grade teacher, Mrs. Maupin, who reminded us at least once a week not to believe everything we read.

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SALT TALK: Every Day I Hear Knock, Knock, Knock - Oh and it's You

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Dec 11, 2017 11:43:00 AM

The year 2017 is accelerating to its end and, as usual, I’ve spent a good part of the year looking at everything through the thought-bending prism known as state and local taxes. Hence the reason for my thoughts to turn paranoiac while hearing one of my favorite songs from the band Spoon. I can guarantee that upon hearing “Knock, Knock, Knock” most others would not have the image in their mind of the state taxing authorities knocking on the front door of your home or business with their hand out.

Fortunately, I’ve been assured everything is ok, since paranoia is characterized by delusions of persecution. And based on what has been happening in the world of state and local taxes, there have been no delusions.

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