Berdon Blogs

SALT TALK: Love vs. the Tax Department – Love Wins Round One

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Jun 26, 2017 11:41:00 AM

They[1] say love conquers all.  While that has been my experience, I’m not so sure it is an effective tax planning tool. That is until I read the recent New York State Administrative Law Judge (ALJ) decision, In the Matter of the Petition of Stephen C. Patrick.[2] I had another topic in mind for this week’s blog, but just had to push it aside once I realized the great lawyering[3] that won this case.

You really should read the case. The facts read like a true love story years in the making. While I won’t delve into the details here, the taxpayers were both high school sweethearts who both went their separate ways. They both married others and had established families of their own.  Many years later they were reunited.

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SALT TALK: Are You a Visionary?

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Jun 19, 2017 11:40:00 AM

Girl Scout Cookies, Converse All-Stars (aka, Chuck Taylors), the World Book Encyclopedia, and Berdon LLP are all turning 100 years old in 2017.  While I can’t say if the first 100 years have gone quickly, I can certainly say my almost 22 years at Berdon have gone by in the blink of an eye. In fact they have gone by in some respects much quicker than the first 100 days of 2017.

Like the 101 year old 100 meter sprinter from India, Man Kaur, who won the Gold Medal at the World Masters Games in Auckland New Zealand this year, we at Berdon like to view this milestone as a new beginning and see no signs of slowing down. As always, we look ahead. 

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SALT TALK:  I Read the (State Tax) News Today, Oh Boy

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Jun 12, 2017 9:20:00 AM

I read the state tax news every day. Fifty states, numerous localities and the thirst for revenue practically insures that Berdon will need me when I’m sixty four and beyond. Well, I just had to laugh when I read that the Beatles’ Sgt. Pepper’s Lonely Hearts Club Band album turned fifty years old last week.

I asked several colleagues if I may inquire discretely as to their views and experiences as to the current state of state taxation for nonresident athletes and entertainers. While some said, nothing changed, it’s all the same, and others commented that it’s getting better all the time.

Well, it is Friday morning at 9:00 and “Lucy in the Sky with Diamonds” is playing in the background. I’m reminded somehow of the Berdon tagline Listen, Solve, Do and am inspired to do just that. 

Even though virtually all jurisdictions have addressed the issue of withholding income taxes from nonresident entertainers and athletes performing or playing in the jurisdiction, some are still taking the attitude that it really doesn’t matter if I’m wrong or right and either simply going along with the jurisdictions general rules or ignoring requirements all together.

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SALT TALK:  “I Wanna Be a Lifeguard” – But Not in New York

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on May 30, 2017 10:33:00 AM

Memorial Day has come and gone.  Visions of the beach are swirling through my head and memories from my high school and college summers take over and surmount any state tax concerns I may have at the moment.  I had the second best job in the world (SALT Partner at Berdon being number one) back in those days.  I was a lifeguard.

Not one of those muscle-bound Jones Beach types, but at a day camp, where I made lots and lots of extra money giving swim lessons after the camp day was done.  Since one hundred percent of my income was disposable in those days (thanks Mom and Dad) I had more money to go around than I do now.  A typical day consisted of getting to the pool early, commiserating about our previous night out, teaching bright eager minds to swim (to this day, I still bump into doctors, lawyers, accountants, engineers, school teachers and the like, who I taught to do so) and listening to the hit song by the Band Blotto, “I Wanna Be a Lifeguard” over and over.

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SALT TALK:  States Look to Lessons Learned In Fairy Tales to Maintain Sales Tax Base

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on May 22, 2017 7:00:00 AM

Anyone remotely familiar with sales and use tax, regardless of the state and locality, knows the first and most basic lesson you learn is the tax applies to tangible personal property (“TPP”) and enumerated services.  Of course, a myriad of exceptions and exemptions apply to the taxation of TPP, but a service needs to be specifically mentioned by the taxing scheme (or the law as we sometimes like to refer to it) in order for the tax to attach itself.

We are now seventeen years into the twenty first century and even my Mom knows Egghead Software closed its last retail location in 1998 because no one buys those floppy discs anymore.  While I know most of you don’t miss the floppy (or even know what it is), the state sales tax base certainly does since “canned” (non-custom) computer software is taxable as TPP in virtually every jurisdiction I can think of.  Software as a service (SAAS) has largely replaced the actual physical ownership of code or floppy discs and the states no longer knew how to impose the tax.  Is the software still TPP or is the software vendor now simply providing a service—which as we all know, needs to be specifically enumerated in order for sales tax to apply.

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SALT TALK:  June and Pennsylvania Tax Amnesty are “Bustin’ Out All Over”

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on May 15, 2017 11:50:00 AM

By popular demand only, I am blogging once again about Pennsylvania’s latest and greatest tax amnesty offer.  The program is “Bustin’ Out” or ending, June 19, 2017, so you’d better hurry to reap the benefits.  The Program began April 21, 2017.

What makes this program so unique is that not only are penalties on past due taxes waived, but 50% of the interest as well.  All taxes administered by the Pennsylvania Department of Revenue, whether applicable to individuals or businesses, are eligible.  While participation is rewarded, sitting on the sidelines will be penalized.  All those who are eligible, but not participating, will be hit with an additional 5% penalty should a subsequent tax liability arise.

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SALT TALK:  Colorado Use Tax Notice and Reporting Requirements – Batteries Not Included

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on May 8, 2017 11:50:00 AM

I was all set to blog about something else, when I noticed that Colorado held a Stakeholder Work Group meeting on April 25th to get “constructive feedback and suggestions” as well as “input and insight” from those affected by and having knowledge of the notice and reporting requirements imposed on out-of-state retailers that make sales to Colorado purchasers but do not collect Colorado sales tax.  This is also known as “The Tattletale Rule”. See my previous blog posts from October 24, 2016 and February 29, 2016.

Enacted way back in 2010, but not to be enforced until July of 2017 due to a web of litigation and injunctions, Colorado enacted legislation and corresponding regulations requiring sellers with no sales tax nexus or collection obligation in Colorado, with over a certain amount of sales to Colorado purchasers, to not only notify the purchaser in exasperating detail of the fact that just because the seller didn’t collect sales tax, you still may have an obligation to remit the corresponding use tax on your own.  To add insult to injury, sellers are also being required to tattle on Colorado purchasers and inform the Department of who bought what, for how much, and when.

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SALT TALK:  New York State Budget Makes Taxpayers Proud to be a Union Man (or Woman)

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on May 1, 2017 10:15:00 AM

Due to the serious nature of the New York State budget negotiations (rumor has it the legislation and the negotiations were referred to as “The Big Ugly”) I haven’t had a good musical reference in weeks. Well, now that it is over and done with, I can come right out and say “Live music is better.  Bumper stickers should be issued.” For those of you familiar with the Neil Young tune, “Union Man,” Mr. Young can be heard uttering this phrase during a supposed meeting of his Musicians’ Local.

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SALT TALK:  New York’s Budget Makes Sales Tax Savings through Leasing Company Highly Suspect

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Apr 24, 2017 10:15:00 AM

The plan was simple.  New York State, like many other jurisdictions, allowed a purchaser, to purchase for resale, tangible personal property (TPP) that is subsequently leased to another taxpayer.  The theory is simple.  The sales and use tax (sales tax) is meant to be a tax on the actual use or consumption of goods and is not intended to pyramid on each transaction, but only impose its burden on the end user.  Accordingly, the purchaser – lessor buys TPP from a vendor for resale and doesn’t pay sales tax.  The purchaser – lessor leases the TPP to the lessee and collects and remits sales tax on the monthly lease payments.  So far, all seems in balance.  The sales tax is imposed only once on the intended party, the lessee as end user.

So what is the perceived problem with this arrangement? 

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SALT TALK: The Chevy Nova, Betsy Ross and the 2017– 2018 New York State Budget

Posted by Wayne K. Berkowitz CPA, J.D., LL.M. on Apr 17, 2017 10:00:57 AM

What do one of the most popular cars ever made, the creator of the banner of the U.S.A. and the late, but finally enacted New York State Budget have in common. Nothing, other than that all three are notable for things that didn’t happen.

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