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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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Recent Posts

SALT TALK: They Call It Instant Justice - Sales Tax on Protective and Detective Services Clarified

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Jan 27, 2020 12:00:00 PM

For those of you watching the detectives or the receptionists, we have some good news:  A New York State Tax Appeals Tribunal decision[1] provides some clarity and reason.

New York State subjects protective and detective services to sales tax.   The problem has been that there is no definition in the Tax Law as to what these services actually constitute and the Tax Department’s view has been broadening over the years.  One 2011 Advisory Opinion goes as far as to say that lifeguard services constitute protective services and are subject to sales tax.

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Topics: SALT TALK

SALT TALK: Lose a Lawsuit, Pass a Law: NJ Pass-Through Entity Tax a Reality

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Jan 21, 2020 11:40:00 AM

Congress and the President made the first move capping the deduction for state and local taxes (SALT) at a mere $10,000. States were quick to fire back by dreaming up all sorts of alternative schemes to work around the limitation. Some of these included the recharacterization of certain tax obligations, such as property taxes, to charitable contributions. While many of these transformative schemes were questionable from the beginning, the IRS made their move this summer by finalizing regulations effectively stunting most of the SALT workaround strategies.

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Topics: SALT TALK

SALT TALK: Traps in Transactions — Don’t Take Sales Tax So Casually

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Jan 13, 2020 11:40:00 AM

You’re selling (or buying) that long coveted investment property. Since you are a regular reader of my blog, you have considered all of the income and transfer tax implications and have done everything practicable to minimize your expense. But did you think about sales tax? Probably not.

While I can’t think of one state where the sale of land by itself is subject to sales tax, often a property contains a multitude of other assets, such as improvements, inventory and other tangible personal property. Many of these assets in and of themselves would be subject to the sales tax if purchased in a straightforward retail transaction.

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Topics: SALT TALK

SALT TALK: 2020 Planning Tips – Wayfair Issues: Revisiting Responsible Person Liability vs. Sales Tax Class Action Suits

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Jan 6, 2020 11:40:00 AM

By now we all know the U.S. Supreme Court held in South Dakota v. Wayfair Inc. that physical presence is no longer required to compel out-of-state sellers to collect sales tax. With all the problems and uncertainty caused by the elimination of the physical presence requirement and sellers rushing to collect sales tax, I can’t help but think back to a pre-Wayfair class action lawsuit for allegedly collecting too much sales tax.

I’m not a big fan of donuts, but I was just trying to get one more in before sticking to all my resolutions for the new year. While eating a glazed chocolate donut, I couldn’t help but remember that the United States District Court for the Northern District of Illinois dismissed a class action suit against Dunkin’ Donuts. I was really enjoying my donut, so I couldn’t imagine why anyone would want to bring a consumer fraud suit with the potential to ruin one of the nation’s leading guilty pleasures. Wouldn’t you know the suit had absolutely nothing to do with the quality of the donuts, but to the sales tax collected on certain coffee purchases as compared to what was charged on food for on-premises consumption.

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Topics: SALT TALK

SALT TALK: What I Didn't Do On My Summer Vacation

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Dec 17, 2019 11:40:36 AM

Just like your choice of summer vacations, the Supreme Court of the United States (SCOTUS) has discretionary authority in deciding whether to review a case. If four justices agree to grant a writ of certiorari, SCOTUS will review a lower court decision and either completely affirm, reverse or possibly some combination of the two.

Only about one hundred or less of the ten thousand petitions received annually are accepted for review. While I've never been swimming in a "cert. pool" on any vacation, most of the justices throw their first-year law clerks head first into the pool to decide which cases will float to the top for further review.

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Topics: SALT TALK

SALT TALK: Independence Brings Growing Pains

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Dec 10, 2019 10:39:45 AM

One would think it’s so easy. Create a business model where your “workers” are required to buy the assets used to run the business. If not having to tie up your own funds wasn’t enough, you can also lend the workers the money to buy said assets and earn a little interest income to boot.

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Topics: SALT TALK

SALT TALK: Year End Planning Tips – Taxing Reasons Not to Visit Your Relatives for the Holidays

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Dec 2, 2019 11:40:00 AM

The drive is too far and the traffic is horrendous. Did you see those outrageous airfares? I have a major deadline at work. Didn’t we come to you last year; this year I have to go to the in-laws?  While all members of the Berdon SALT team are anxiously looking forward to traveling to spend the upcoming holidays with our respective families, we know that some of our clients may not be as enthusiastic. Our holiday gift to our readers is two-fold: firstly, an excuse (at least a new one) not to attend that family function, and secondly, potential tax savings for using our excuse.

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Topics: SALT TALK

SALT TALK: Inferences, Conclusions, Relationships, and Residency Audit Traps

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Nov 25, 2019 1:51:50 PM

There are two very disparate pursuits in which I have partaken for almost 30 years; marriage and residency audits. While the burden of proof in relationships and audits may be different, inferences drawn and conclusions reached hastily can be a disaster for both. While no one knows the rules for lasting relationships, readers of my blog know that many jurisdictions use a two-pronged approach to determining whether an individual taxpayer is a resident for state tax purposes.

First and foremost is domicile. With certain exceptions, if an individual is domiciled in a state, they will be a tax resident of a state. The so-called statutory residency test looks to whether one has a permanent place of abode in the jurisdiction and whether more than 183 days have been spent in the jurisdiction. I have blogged extensively about the intricacies of these tests and browsing through the previous blogs at http://blogs.berdonllp.com/topic/salt-talk is highly recommended.

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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 Nov 18, 2019 11:40:00 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 one particular 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: Should State Apportionment of Income Change with Your Mood(y’s)?

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Nov 11, 2019 11:40:00 AM

When I was in law school, Constitutional Law and Tax Policy were my least favorite subjects. Little did I know I would grow up to be a SALT expert and these subjects would be the foundations of my chosen practice area. Not on a day-to-day basis, but as the essential foundation to everything we do.

While my eyes may have occasionally glazed over in class, I did manage to learn that tax policy is what makes the law and it isn’t the law that should be making tax policy. This distinction might seem subtle or nonexistent, but I think is illustrated in all its grandeur in a recent New York State ALJ Decision, In the Matter of Moody’s Corporation & Subsidiaries, (DTA Nos. 828094 and 828203, October 24, 2019.)

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Topics: SALT TALK

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