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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:  Who Wants to RAP[P] About NYC Taxes?

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Nov 7, 2016 11:00:00 AM

The New York City Department of Finance held its 2016 Tax Representatives and Practitioners Program (“TAXRAPP”) this past Wednesday.  Based on the filled-to-capacity banquet room at the New York Athletic Club, it seems that a lot of us wanted to “rap” about taxes.

Being too young to have participated in any meaningful “rap sessions” and too old to have grown up with rap music, I always wondered what the creator of the TAXRAPP acronym had in mind.  Nonetheless, while a lot of useful information was exchanged, none of us were sitting barefoot on the floor or riffing poetically to a techno inspired beat. Instead, what we were treated to were the insights of the key policymakers for the New York City Department of Finance as well as the New York State Department of Taxation and Finance. 

I have attended many a TAXRAPP over the years and this was perhaps the most informative ever.  I attribute this in part to the major overhaul of the New York State and New York City corporate tax structure over the past two years.  Many practitioners attended to find out the latest changes to the rules and the impact on their clients.  While useful, those attending only to find out the rule changes are really missing the point.

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Topics: SALT TALK

SALT TALK:  NJ Estate Tax Repealed, Inheritance Tax Still Creates Major Roadblock, Gas Tourists No Longer Welcome

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Oct 31, 2016 12:50:00 PM

While it has been a long and sordid journey, the traffic cones have been lifted and the barriers cleared. Not being an estate and gift tax expert, that was certainly my first impression when I read that New Jersey lawmakers finally agreed to phase out the estate tax, raise the gas tax by 23 cents a gallon, gradually lower the sales tax rate, and provide an exemption for retirees.

First, the good news: For decedents dying on or after January 1, 2017, the NJ Estate Tax exclusion increases from $675,000 to $2,000,000. For decedents dying on or after January 1, 2018, the tax is completely eliminated. Here is the catch though: New Jersey still has in place and currently has no plans to eliminate the Inheritance Tax[1]. Leave money to the right relatives and (on or after 1/1/18) no tax applies. Leave money to friends or the wrong relatives and your estate may be in for a big surprise.

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Topics: SALT TALK

SALT TALK:  Fantasy Football for the Supreme Court?

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Oct 24, 2016 11:00:00 AM

One could argue that the United States Supreme Court (“SCOTUS”) never showed enthusiasm towards addressing state tax issues, and with the current roster being one Justice short, the situation has not changed. Accordingly, to move things along and remain completely bipartisan in the process, I propose that every federal Circuit Court justice will be required to participate in a fantasy football pool. Each week’s winner will get to be SALT Justice of the Week (“SJW”), a high honor indeed!  

The SJW will be required to review at least one state tax related petition for certiorari during his or her one week tenure and persuade the remaining Justices to grant the petition. Hopefully, the SJW will choose Direct Marketing Association v. Brohl

As discussed in my February 29, 2016 blog, “No One Likes a Tattletale”, Colorado enacted and the U.S. Court of Appeals for the Tenth Circuit upheld that requiring merchants to tattle on their customers is constitutional.  Specifically, the law requires retailers not collecting Colorado sales tax to do three things if sales to Colorado customers exceed $100,000:  they must tell Colorado purchasers that they owe use tax; they must provide an annual summary to the customer; and they must annually report the purchaser information to the Colorado Department of Revenue.

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Topics: SALT TALK

SALT TALK:  Knicks – Pacers Rivalry No Help for New York State Residency Audits

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Oct 17, 2016 11:00:00 AM

Friends, family, colleagues, and readers of SALT TALK all know me as a state tax expert as well as a serious music fan. Sports—not so much. Spending my entire childhood and most of my adult life watching the New York Giants and Islanders with my Dad, I will never object to watching a game. But plan my day around it, maybe for the Giants. So please forgive me for totally stepping outside my realm by analogizing what I’m told is the long-standing Knicks – Pacers rivalry[1] with the similar, yet dangerously different rules governing Indiana and New York individual income tax residency rules.

While I pay attention to state tax happenings in all jurisdictions, Indiana is generally not as prominent on my radar screen as New York, New Jersey, Connecticut, California and several others.  However, reading the daily tax propaganda the past few weeks, I couldn’t help but notice the barrage of decisions, both for and against taxpayers, deciding whether or not a taxpayer was in fact a resident of Indiana.

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Topics: SALT TALK

SALT TALK: Hurricane Forecasts and State Tax Planning Shouldn’t Hinge on News Provider of Choice

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Oct 10, 2016 11:00:00 AM

In its October 7, 2016 8:00 AM EDT update, the presumably nonpartisan National Hurricane Center forecasted that Florida, Georgia, and South Carolina had all dodged the major threat posed by Hurricane Matthew. Glued to the TV screen that night, flipping between major news providers, my wife and I were surprised to see the different perspectives of hurricane preparedness and recovery presented. While one such provider suggested that had we just built a wall along the coast we wouldn’t be worrying about the storm, another suggested the solution was to give all Americans earning under $200,000 a year a $500,000 tax credit whenever a state of emergency is declared. 

While this obviously didn’t happen, I created this timely fiction to illustrate my surprise with an October 7, 2016 Income Tax – Information Release[1] from the Ohio Department of Taxation.  The Release purports to provide guidance to Ohio nonresident individual taxpayers in light of the Department’s recent loss in the Ohio Supreme Court[2]. In my opinion, the guidance is more of a warning, that despite the taxpayer’s victory in the Corrigan decision, the Department intends to fight you every step of the way if you are seeking a refund and to those planning transactions on a going forward basis.

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Topics: SALT TALK

SALT TALK:  Eating Warm Cookies in NYS Unhealthy (for your Bottom Line)

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Oct 4, 2016 12:50:00 PM

Let’s face it: the human body and its interaction with food is a complex thing that we are far from completely understanding. One day coffee is bad for you; the next day (today) it prevents dementia. Trying to keep up with what to eat is getting harder every day. My advice to you is to keep up with the latest independent studies (those whose primary researcher wasn’t Juan Valdez, the fictional character created in 1958 by the National Federation of Coffee Growers of Colombia) and apply a modicum of your own common sense. Keep your fingers crossed and hope for the best.

Should we be taking nutritional advice from the New York State Department of Taxation and Finance? I think not. 

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Topics: SALT TALK

SALT TALK:  Going Mobile – Feds May Finally Intervene

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Sep 26, 2016 12:50:00 PM

Back in the year 1971, Pete Townshend wrote and sang the classic Who song “Going Mobile”  that contained the lyrics “. . . watch the police and the tax man miss me. . .[1]” Yet it has taken until Sept. 21, 2016, for the U.S. House of Representatives to pass the Mobile Workforce State Income Tax Simplification Act of 2015, which may in fact, finally help the state tax man miss you.  Before anyone gets too excited about the federal government finally straightening out the mess the states have created, the smart money says the Senate isn’t going to follow suit and will not pass this bill.

Drones and self-driving vehicles are relatively new phenomena, at least as compared to telecommuting.  Yet the federal government has managed to pay much more attention to packages falling from the sky and unmanned vehicles than it has to the long-standing problems encountered by businesses and employees dealing with the confusing and inconsistent tax provisions that come into play when an employee works from home or crosses the state border to make a sales call.

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Topics: SALT TALK

SALT TALK:  Aliens, Adult Entertainment, and Amnesty

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Sep 19, 2016 7:00:00 AM

We have recently reached the one year milestone with our Berdon Blogs (see ...announcement…).  What better way to celebrate than to come up with a title for this week’s blog that will hopefully propel its readership past that of the previously most popular article by my Partner Scott Ditman!  So here are a few interesting state and local tax tidbits that address aliens, adult entertainment (in New York), and tax amnesty (in Pennsylvania).

Facebook is locating a new datacenter in Los Lunas, New Mexico while New York adult entertainment establishments continue to battle the sales tax.  In exchange for property and sales tax breaks reported to be worth millions, Facebook will make an initial investment of $250 million to locate part of the cloud a mere 200 miles away from the UFO capital of Roswell. 

And in another example of “you just can’t make this stuff up,” the New York Tax Appeals Tribunal held that an adult entertainment establishment was clearly a place of amusement subject to the sales tax. The sales tax exemption for dramatic or musical performances did not apply.

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Topics: SALT TALK

SALT TALK:  Catch Me if You Can Evolves to Match Me if You Can

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Sep 12, 2016 11:00:00 AM

You come home from a long day of work, check the mail, and find a letter from the IRS. Your heart sinks to the floor as you open the envelope. Straight from the enclosed IRS CP2000 notice:

The income and/or payment information we have on file doesn’t match the information you reported on your tax return. This could affect your tax return; it may cause an increase or decrease in your tax, or may not change it at all. 

The IRS has been doing it for years. Fail to include a 1099 for $100 of bank interest on your tax return and you are likely to receive a “matching notice” requesting the additional tax, interest and penalties. Catch me if you can (see my February 8, 2016 blog regarding state voluntary disclosure programs) has turned into match me if you can.

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Topics: SALT TALK

SALT TALK: What’s All This Noise I Hear about Uniforms Being Unconstitutional in Pennsylvania?

Posted by Wayne Berkowitz CPA, J.D., LL.M. on Sep 6, 2016 12:50:00 PM

While reading the most recent Commonwealth Court of Pennsylvania decision[1] striking down the Corporate Net Income Tax cap on net operating loss deductions (NOLs), I repeatedly had to assure myself that I wasn’t misreading or mishearing the basis of the Court’s decision. The Court found the cap to be in contradiction to the Uniformity Clause of the State Constitution. I couldn’t stay focused and kept hearing the voice of a kindly old lady in my head. She seemed baffled over my attaching importance to this matter and uttered some convoluted question as to why I was making all this noise over uniforms being found unconstitutional in Pennsylvania. 

Not understanding my momentary lapse of reason, I realized that although the case was riveting, with the recent passing of Gene Wilder, I couldn’t help thinking about my favorite Saturday Night Live character from way back in the seventies, Ms. Emily Litella. Ms. Litella was played by none other than Gilda Radner, who was married to Mr. Wilder. Ms. Litella was a kind, elderly woman with a hearing problem, who would offer editorial opinions on news topics of interest that she often misheard. (What’s all this fuss about natural race horses, other kinds of horses are important too… Why is everyone so upset about crustaceans hijacking planes … Why do we need an eagles’ rights amendment.) She would ramble on until corrected by one of her newscasters and would utter her trademark saying “Oh never mind… that’s completely different.”

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Topics: SALT TALK

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