State Tax Matters - deloitte.com

1 State Tax Matters The power of knowing. July 13, 2018. In this issue: Income/Franchise: California FTB Moves Forward with Draft Proposed Amendments to Market-Based Sourcing Regulation .. 2. Income/Franchise: Florida: Proposed Rule Changes Reflect Some Recently Enacted Law Changes, Including AMT. 3. Income/Franchise: Georgia DOR Explains Exclusion for Dividends from Sources Outside the US, Including Application of IRC Sec. 965 Provisions .. 3. Income/Franchise: Indiana DOR Explains Impact of Some IRC Sec. 965 Repatriation Provisions under the Federal 2017. Tax Reform 4. Income/Franchise: Michigan DOT Discusses Federal 2017 Tax Act, Including State Impact of Foreign Income Repatriation Provisions, BEAT and GILTI.

2 4. Income/Franchise: Minnesota Supreme Court Reverses Tax Court, Holds that Tax Commissioner's Alternative Apportionment Method Imposed on a Bank's Combined Return Was Warranted .. 5. Income/Franchise: Missouri: New Law Excludes Certain Intercompany Sales and Business Transactions from Apportionment and Taxable Income Calculations, Revises Some Banking Tax Provisions .. 6. Income/Franchise: New York: Tax Appeals Tribunal Ruling Affirms that Taxpayers Engaged in the Production of Electricity Do Not Meet the Definition of a Qualified New York Manufacturer .. 6. Income/Franchise: North Carolina: New Law Modifies Sourcing Language for Receipts from Intangibles for Sales Factor Purposes.

3 7. Income/Franchise: Oregon DOR Issues Administrative Rule on New State Repatriation Tax Credit Pursuant to IRC Sec. 965 Repatriation Income for Tax Year 2017 .. 8. Sales/Use/Indirect: Alabama DOR Comments on Recent US Supreme Court Decision that Overrules Quill, Announces October 1 Remote Seller Registration Deadline .. 8. State Tax Matters Page 1 of 14 Copyright 2018 Deloitte Development LLC. July 13, 2018 All rights reserved. Sales/Use/Indirect: Indiana DOR Comments on Recent US Supreme Court Decision that Overrules Quill, Status of Current Law .. 9. Sales/Use/Indirect: Indiana DOR Explains New Law Providing that Remote Access Software is Not Subject to Tax.

4 10. Sales/Use/Indirect: Montana DOR Comments on Recent US Supreme Court Decision that Overrules Quill .. 10. Sales/Use/Indirect: North Dakota Tax Commissioner Follows Up on Post-Wayfair Guidance, Announces October 1. Remote Seller Registration Deadline .. 11. Sales/Use/Indirect: Rhode Island DOT Follows Up on Post-Wayfair Guidance, Comments on Possible Retroactive Application .. 11. Sales/Use/Indirect: Washington DOR Amends Rule on Bad Debt Deductions, Including Assignment and Private Label Credit Card Provisions .. 12. Sales/Use/Indirect: Wisconsin DOR Comments on Recent US Supreme Court Decision that Overrules Quill, Announces October 1 Enforcement Date and Forthcoming Remote Seller Nexus Rules.

5 13. Sales/Use/Indirect: Wyoming DOR Comments on Recent US Supreme Court Decision that Overrules Quill, Status of Current Law .. 13. Multistate Tax Alerts .. 14. Income/Franchise: California FTB Moves Forward with Draft Proposed Amendments to Market- Based Sourcing Regulation Tax News, Cal. FTB (7/1/18). The California Franchise Tax Board (FTB) briefly summarized some discussion at its third Interested Parties Meeting (IPM) on proposed amendments to California's market-based sourcing regulation (California Regulation Section 25136-2), which was held on May 18, 2018 [see previously issued Multistate Tax Alert for more details on the third IPM].

6 Much of the focus of this third IPM was on the recently revised draft language amending California Regulation Section 25136-2 ( , the second round of amendments to California Regulation Section 25136-2). A copy of the draft language handout from this meeting is available online. At the third IPM, the FTB. explains that the following new concepts were introduced: URL: URL: :2em:3na:stm:awa:tax:071318&sfid=7011O00 0002Dh19. URL: 1. The definition of domicile and beneficial owner, . 2. Language of foreign jurisdiction or geographic area, . 3. Simplification rules for services, 4. Government contract rules, 5. Asset management rules, and 6.

7 The burden of proof for changing the reasonable approximation method. Public comments on the latest proposal are due by July 19, 2018. The FTB additionally notes that a fourth IPM for this regulation is expected to occur within the next six months, and that another draft of the proposed language will be provided to the public for discussion at that time. For more information or questions, please reach out to any of the following individuals listed below. Christopher Campbell (Los Angeles) Steve West (Los Angeles). Principal Managing Director Deloitte Tax LLP Deloitte Tax LLP. State Tax Matters Page 2 of 14 Copyright 2018 Deloitte Development LLC.

8 July 13, 2018 All rights reserved. Valerie Dickerson (Washington, DC) Kent Strader (San Francisco). Partner Managing Director Deloitte Tax LLP Deloitte Tax LLP. Brian Toman (San Francisco) Shirley Wei (Los Angeles). Senior Manager Senior Manager Deloitte Tax LLP Deloitte Tax LLP. Income/Franchise: Florida: Proposed Rule Changes Reflect Some Recently Enacted Law Changes, Including AMT Repeal Proposed Amended Fla. Admin. Code Ann. r. et al., Fla. Dept. of Rev. (7/2/18). The Florida Department of Revenue (Department) has issued proposed rule amendments incorporating some recently enacted State corporate income tax law changes [ 7093; see previously issued Multistate Tax Alert for more details on some of these recent tax law changes], including changes addressing the effect that the repeal of the federal corporate Alternative Minimum Tax made by the federal 2017 Tax Act ( , Public Law 115-97) will have on Florida's Alternative Minimum Tax, as well as revisions made to Florida's estimated corporate income tax payments.

9 If requested in writing and approved by the Department, a related meeting to discuss these rule proposals will be held on July 18, 2018. Please contact us with any questions. URL: URL: URL: :2em:3na:stm:awa:tax:071318&sfid=7011O00 0002Dh19. Chris Snider (Miami) Ian Lasher (Tampa). Managing Director Managing Director Deloitte Tax LLP Deloitte Tax LLP. Ben Jablow (Tampa). Manager Deloitte Tax LLP. Income/Franchise: Georgia DOR Explains Exclusion for Dividends from Sources Outside the US, Including Application of IRC Sec. 965 Provisions Policy Bulletin IT 2018-01 Exclusion for Dividends from Sources Outside the United states , Ga. Dept. of Rev.

10 (6/26/18). The Georgia Department of Revenue has issued a policy bulletin discussing taxpayer eligibility for Georgia's exclusion for dividends from sources outside the United states under Sec. 48-7-21(b)(8)(A), applicable for tax years beginning before January 1, 2018. The guidance addresses: URL: 1. Which persons are eligible for this exclusion, 2. Whether Georgia has deferral payment options similar to Internal Revenue Code (IRC) Secs. 965(h) or 965(i), and 3. Whether Georgia recognizes the IRC Sec. 962 individual taxpayer election to pay tax on the income as if the income is received by a C corporation. State Tax Matters Page 3 of 14 Copyright 2018 Deloitte Development LLC.