CONFERENCE WATCH: ECONOMIC SUBSTANCE, NEXUS AMONG HOT TOPICS AT THE 22ND ANNUAL PAUL J. HARTMAN STATE AND LOCAL TAX FORUM

Einstein Einstein defined insanity as “doing the same thing over and over again and expecting different results.” Although whether Einstein truly said this or not is a matter of debate, the sentiment can be applied to just about anything. . .except state and local taxation. This wonderful realization, and reaffirmation of my own sanity, came to me this past week at the 22nd Annual Paul J. Hartman State and Local Tax Forum, presented by Vanderbilt University Law School. 

Regardless of the topic one thing was clear from the outset of the forum: state and local tax is full of uncertainty. Nothing illustrated this better than the discussion of the economic substance doctrine, and how it is applied at the state level. A case in State A can favor the taxpayer, while the same fact pattern in State B can be a definitive win for the state, as illustrated by The “State Economic Substance Doctrines,” panel in their discussion of the Sherwin Williams cases in both Massachusetts and New York.

The disconformity isn’t resigned to the state level either, as local taxes, much like a haunted house at Halloween, provide traps lurking behind every corner. The many trials and tribulations of doing business in any number of the charter/home rule cities or parishes across the country were discussed in depth in “What the ‘L’?, Local Taxes.” Essentially, just because a transaction isn’t taxable at the state level doesn’t ensure that it can’t be taxed by a local jurisdiction.

Particularly interesting, however, was a candid discussion between three judges from various state tax tribunals. “A View From the Bench,” provided practitioners with some insights into of how these judges view their roles as arbiters in tax disputes. This discussion also provided those in attendance with some of the do’s and don’ts when appearing in the courtroom, including knowing the rules of evidence and being able adequately explain the law. 

There were few panel discussions that didn’t focus on some SALT issue surrounding the conducting of business. From apportionment, unitary groups, and combined reporting, to clawbacks of economic development incentives, the major tax issues facing businesses were covered. Quill Corp. v. North Dakota also commonly came up in discussion, as both economic nexus and physical presence nexus were hot topics. In the “Current Sales and Use Tax Issues Section,” held Oct. 27, a myriad of sales tax issues were discussed, including refunds and business-to-business transactions.

Although the forum was full of various topics, ideas, and viewpoints, when it comes to taxes, every state is different in some way. Therefore, it is possible to do the same thing over and over again and get a different result, but any sane person already knew that.  

For more in-depth information about topics discussed at the Hartman State and Local Tax Forum, check out Bloomberg BNA’s Weekly State Tax Report.

*Continue the discussion on Bloomberg BNA's State Tax Group on LinkedIn: What is the most important issue facing the SALT world today?

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By:  Jason Plotkin

Follow Jason on Twitter at:  @jplotkinSALT

Follow BBNA on Twitter at: @BBNATax.