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

Wayne K. 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: The Day We Have Been Waiting For

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Apr 16, 2018 12:29:56 PM

It is April 16th, a day that most accountants hate but gleefully look forward to, nonetheless.  Since April 15th, “Tax D-Day” fell on a Sunday, midnight tonight is when it all comes to a screeching halt.  But if you are a state and local tax geek, this is certainly the week we have been waiting for our entire careers.

The Supreme Court of the United States is going to hear the potentially landmark case of South Dakota v. Wayfair, which may in fact overturn the physical presence standard established by the Court over 25 years ago in Quill.  With that introduction and my full attention required to assist with last minute tax filings (mainly, my own) and the need (as well as the desire) to monitor every possible development regarding Wayfair, I leave you with a very relevant blog “rerun” that sums up the problem. 

Readers should note, Amazon now collects sales tax in every state that imposes one.

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Topics: SALT TALK

SALT TALK: Permanent Place of Abode: Vacation Planning Tips 

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Apr 9, 2018 11:22:16 AM

Summertime is almost here and with vacation plans at the forefront of our minds, it seems like the perfect time to recap what I’ve gone over with my faithful readers regarding one important aspect of the statutory residency test, the permanent place of abode (PPA).

Remember, assuming one is domiciled somewhere other than New York (New York State and/or New York City), if you don’t have a PPA, you can be in New York every day and not be a tax resident.  The simplest example being a New Jersey domiciliary commuting to work in New York is certainly going to be present for more than 183 days (at least if he or she is an accountant) but they won’t be a tax resident if they don’t have a PPA.

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Topics: SALT TALK

SALT TALK: Sales Tax, Twitter, the USPS, Megan Brennan, and Wilford Brimley

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Apr 3, 2018 11:40:00 AM

I hope you aren’t sick and tired of reading about nexus, sales tax, and collection obligations, because I sure am tired of writing about it.  But how could I not?  I can’t tell you how many years I had to go without having a great conversation about sales tax and now we have President Trump tweeting about it at the same time the Supreme Court is about to hear a landmark case on that very same topic.  It’s a great time to be a sales tax enthusiast!

Readers, let’s sum up where we have been and where I think we are going in these tumultuous times.  

  • Our federalist system of government was established, bestowing in many ways equal power on both the centralized federal government and the individual states. Hence the reason why clients, especially those from overseas, simply can’t fathom why they have to file so many different tax returns with so many different sets of rules.
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Topics: SALT TALK

SALT TALK: My (E) Baby Wrote Me a Letter

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Mar 26, 2018 10:26:13 AM

I always knew I could help prevent forest fires, but until I recently checked my eBay email, I was totally unaware that “[I] can help prevent Internet Sales Tax.” The Ad Council TV campaign of my youth used a friendly, sad looking bear to remind us to be careful, and it all seemed altruistic at best and harmless at worst. But somehow I failed to get that warm fuzzy feeling from the recent note sent to me by the “eBay Government Relations Team.”

I wasn’t aware that so called “internet sales tax” is some kind of viral disease infecting online purchasers of goods and (specifically enumerated) services. As stated below, the “Team” is convinced that the New York State Legislature formulated the virus in some secret lab and is looking to spread it to you, you, and you through legislation.

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Topics: SALT TALK

SALT TALK: Stealing Bases–Which State will take the Lead?

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Mar 19, 2018 12:27:35 PM

Taking a lead is not always a good thing. Case in point; yours truly playing Little League Baseball as a sixth grader, decides that after getting one of his few and far between singles, to stand way ahead of the comfort zone of first base, practically touching second. Those of you who know me, especially way back in sixth grade, know my nickname was never Flash, Mercury, Speedy Gonzales, or Hermes. You can guess the result, can’t you? The pitcher leisurely tossed the ball to the second baseman, who tagged me out without much fanfare.

Stealing the tax base, at least as perceived by state and local taxing authorities has resulted in similar outcomes for taxpayers as well as the taxing authorities, however usually with a great deal of fanfare and wasted dollars on both sides. As I read the Daily Tax Report one day last week,[1]
I thought for sure some jurisdiction tried to steal home by imposing a new tax on Major League Baseball. 

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Topics: SALT TALK

SALT TALK:  Refund Claims – Don’t Make a Leap of Faith on What Difference a Day Makes

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Mar 12, 2018 11:38:00 AM

Buzzing through the tax dailies every morning, one can’t help but notice the sad but frequently repeated stories of taxpayers being denied refund claims because of late filed returns. Usually I skip over them. Who wants to read about clerks testifying about mailing procedures, postmarks, blurred envelopes, and the like. As if Civil Procedure weren’t tedious enough, Tax Procedure adds an additional layer of monotony to the mix. I can’t get the image out of my head of a room full of tax attorneys and accountants counting days on their fingers and toes to make sure a refund claim is timely.

Something however made me stop and look at a recent New York City Tax Appeals Tribunal Opinion[1] addressing the timeliness of a Real Property Transfer Tax refund request. First, this is one of the most onerous taxes around, second, we deal with it frequently at Berdon, third it’s a Tax Appeals Tribunal decision (citable as precedent) and fourth, the statute of limitations to request a refund is only one year, while virtually every other tax provides a three year time frame.

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Topics: SALT TALK

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

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Mar 5, 2018 10:04:12 AM

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:  Market-Based Sourcing, Choice of Entity, and Inconsistent Results

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Feb 26, 2018 11:45:00 AM

Although I have discussed market-based sourcing several times, a quick recap is in order. Rather than looking to the traditional criteria of cost of performance or where the services were actually performed, market-based sourcing purports to look to where the customer received the benefit of the services provided. 

Market-based methodology has been a great economic development incentive for state and local tax jurisdictions. Combined with a single factor apportionment scheme based only on sales, businesses are encouraged to locate their offices, property, equipment, employees, and all other valuable assets within the jurisdiction. Taxpayers can do so with no increase in tax liability as the location of their business will have no impact on the income tax liability of the business. Only in-state customers will potentially generate an apportioned tax liability to the taxing jurisdiction.

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SALT TALK:  NY Governor Disdains Humble Pie as Evidenced by Budget Proposal Thirty Day Amendments

Posted by Wayne K. 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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Topics: SALT TALK

SALT TALK: Sales Tax Planning Allows Building Boxes More Efficiently

Posted by Wayne K. 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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Topics: SALT TALK

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