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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: Use Caution Navigating State Tax Credits

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on May 7, 2018 11:30:00 AM

Just like the beautiful Sirens luring nearby sailors to a rocky shipwreck, those aimlessly navigating the waters of state tax credits can end up with a similar fate. The Sirens, in this case, are certain purveyors of state tax credit services. They will sing you songs of promises to provide you free money that your accountant doesn’t know about. And best of all, at no cost to you.

While state tax credits are a great resource as are a handful of practitioners that specialize in securing them, many have a rudimentary understanding of federal and state tax planning in general, let alone your specific circumstances. While a taxpayer may be able to secure a tax credit from a particular state, surprisingly this may have little or no impact on your overall tax burden. In fact, it may end up costing you.

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Topics: SALT TALK

SALT TALK: Where You Rest Your Weary Bones May Have No Impact on Tax Residency

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Apr 30, 2018 9:20:00 AM

As avid readers of my blog already know, most states have a two-pronged approach to pulling you in as a resident and consequently taxing you on worldwide income. The first way is domicile, the test that generally looks to your intentions. The second and the focus of this post is statutory residence.

If you have a permanent place of abode and are in the jurisdiction for more than 183 days, with limited exceptions, you will be held in the same regard as a domiciliary of the jurisdiction. You will be taxed as a resident. What many taxpayers fail to appreciate is that you don’t ever need to sleep, visit, drive by, look at or be within 500 miles of the so called living quarters that may constitute a permanent place of abode.

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Topics: SALT TALK

SALT TALK: Take My Tax … Please (California)

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Apr 23, 2018 11:30:00 AM

I’ve addressed real estate transfer tax traps before (February 21, 2017, July 11, 2016, October 12, 2015, October 5, 2015) and the concept of the controlling interest transfer. Simply put, state real property transfer taxes used to be simple; if you transferred title to the property, the tax applied. Life got more complicated and taxpayers got smarter. What about the sale of a business that owns real property? If the buyer were to purchase the existing business entity, the deed stays in the name of the existing business and no transfer tax would apply. Clever property owners came up with the idea to put the property in a special purpose entity specifically to hold title to the property they wished to sell. The buyer would purchase the entity, real property and all. Under the old simplistic transfer tax statutes, the tax wouldn’t apply.

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Topics: SALT TALK

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

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