KPMG reports: Florida, multiple states

KPMG reports focus on recent state and local tax developments

KPMG reports focus on recent state and local tax developments

KPMG’s This Week in State Tax—produced weekly by KPMG’s State and Local Tax practice—focuses on recent state and local tax developments.

  • Florida: The Department of Revenue issued a Technical Assistance Advisement (TAA) addressing how a service provider is to source its receipts for Florida corporate income tax purposes.  In prior TAAs, the Department of Revenue stated that “in analyzing the income producing activity, the most important factor to determine is where the customer is located.” In those TAAs, the Department concluded that receipts from services provided to customers located in Florida are to be included in both the numerator and denominator of the Florida sales factor. In the most recent TAA, however, the Department looked to more “on point” provisions in the state’s sales factor rule and concluded that the taxpayer’s service receipts are to be included in the numerator of the sales factor to the extent that the deliverables from those services were forwarded, sent, delivered or provided to a location in Florida.
  • State legislative updates—NOLs: Certain states recently introduced bills that, if enacted, would expand the use of net operating losses (NOLs).
    • California—recently introduced Assembly Bill 1708 would reinstate the NOL deduction for tax years beginning on or after January 1, 2021. 
    • Maryland—legislation would allow publicly traded companies a deduction over a 10-year period to offset changes in deferred tax assets and liabilities stemming from recent apportionment law changes.
    • New Hampshire—Senate Bill 435 would eliminate the double apportionment of NOLs.
    • Pennsylvania—House Bill 1960 would increase the current limitation on the use of NOLs by 10% each year until NOLs could offset 80% of taxable income for tax years beginning after December 31, 2024. 
    • West Virginia—similar to the proposal in Maryland, proposed legislation would allow publicly traded companies a deduction over a 10-year period to offset changes in deferred tax assets and liabilities stemming from recent apportionment law changes. 

Read a January 2022 report prepared by KPMG LLP

 

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