State tax planning in response to economic distress
Businesses experiencing economic distress as a result of the COVID-19 pandemic are facing difficult decisions. From reductions in capital spending and workforce needs, to inventory stress and shortages in supply chain, careful consideration should be given to how decisions affect your organization’s state tax position.
To better navigate uncertainty and distress at the state and local level, there are a number of questions that organizations should ask if in the midst of rapidly changing organizational norms.
- How are my income, sales tax, and other state and local tax filings and payments affected?
- Are my previously approved state tax incentives at risk?
- Does my increasingly remote workforce affect my state tax obligations?
- What relief are state and local governments offering to small and mid-sized businesses in the middle market?
- How else can we increase my organization’s cash flow?
The state tax insights below aim to provide planning opportunities and guidance to organizations feeling the immediate effects of a distressed economy:
Revised conformity excludes certain net operating loss and excess business loss provisions effective for 2019 tax years.
The state will decouple from the taxpayer-friendly interest expense and net operating loss provisions of the federal CARES Act.
Expansive tax bill provides taxpayer-friendly changes while balancing reduced tax revenue in the COVID-19 economy.
Fiscal year 2021 budget includes temporary tax changes in order to generate much needed revenue in the COVID-19 economy.
New York enacts legislation further decoupling New York City corporate and UBT taxes from certain CARES Act provisions.
Delaware notices advise businesses to either participate in the state’s unclaimed property VDA Program or be subject to an audit.
Depleted trust fund balances due to COVID-19 may cause state legislatures to act now to prevent further reductions.
As businesses increase the use of remote workforces, nexus and withholding determinations can greatly complicate state tax compliance.
A sales tax bad debt analysis and review can provide necessary cash flow for many businesses in a distressed economy.
Manufacturers changing over operations in order to create personal protective equipment may be exposed to new state tax liabilities.