1 8am - state and local tax update

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1 8am - state and local tax update

  1. 1. State and Local Tax Update Walter Doggett – E* TRADE Financial Corporation Dan McGuire – KPMG Tysons Corner Dave Turzewski – KPMG New York Jennifer Petersen – KPMG San Francisco © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 0
  2. 2. Topics ■Introductions ■State of the states ■Trends in tax legislation ■Legislative developments ■ California ■ Ohio ■ Pennsylvania ■ Massachusetts ■ Minnesota ■ Oregon ■Other trends and developments ■ Income tax nexus ■ Tax Base ■ Allocation and Apportionment ■ Amnesty and special VDA programs ■Marketplace Fairness Act © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 1
  3. 3. State of the states
  4. 4. State revenues – Total taxes Year over year percentage change on a monthly basis – September 2000 through August 2012 20 15 10 5 0 -5 -10 Percentage Change -15 -20 Source: Federation of Tax Administrators. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 3
  5. 5. State revenues – Total taxes Year over year percentage change on a monthly basis – January 2007 through August 2012 30 20 10 Indiv. Income 0 Sales -10 -20 Corp. Income -30 Source: Federation of Tax Administrators. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 4
  6. 6. Four-year impact Change in Tax Revenues for 12 Months Ending June 2012 vs. June 2008 > + 10% (8) 0% to +10% (17) Alaska -10.5% Hawaii +0.4% D.C. -0.2% 0% to -10% (19) More than -10% (7) 23 States from -5% to +5% Source: Census Bureau. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 5
  7. 7. Last year Change in Tax Revenues for 12 Months Ending June 2012 vs. June 2011 Less than 0% (7) Alaska 37.1% Hawaii 8.6% D.C. 6.5% 0% to 5% (18) 5% to 10% (17) More than 10% (9) © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 6
  8. 8. Budget difficulties: FY 2014 spending still below FY 2008 State General Fund Spending Recommended for FY 2014 Lower than in FY 2008 Spending Increased (plus AK, HI) Spending Decreased Source: National Association of State Budget Officers. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 7
  9. 9. Change in state budgets Real percentage change – 1979-2013 8% 6% 4% 2% 0% -2% -4% -6% -8% 1979 1981 1983 1985 1987 1989 1991 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 2013 Source: National Association of State Budget Officers. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 8
  10. 10. Net state tax changes – FY 1991-2012 $28.6 11% $28 10% Billions of dollars $24 9% Percent of previous year’s collections $20 8% 7% $16 $15.4 6% 5% $12 3.7% 5.4% 4% $9.1 $8.8 $8 3% $4 $0 $2.6 $4.1 $3.4 $1.4 $1.8 0.9% 0.4% 0.5% -$4 -$8 1.6% 1.6% 0.9% $1.1 0.8% 0.6% 0.2% 0.6% 0.5% 0.3% 1.0% 0.6% - -$1.5 -$2.6 1.6% 1.7% -$3.3 2.0% -$4.0 -$12 $4.1 $3.8 2% $3.0 0.4% 0.2% 0.4% -$2.5 -$1.8 1995 1996 1997 -1% -2% -4% -$9.9 1994 0% -3% -$7.1 -$7.3 1991 1992 1993 1% 1998 1999 2000 -5% 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012* Source: National Conference of State Legislatures, August 2012. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 9
  11. 11. How states closed budget gaps (FY 2008 – FY 2012) Total Gaps Closed = $650 Billion Spending Cuts 45% Other 7% Rainy Day Funds and Reserves 9% Taxes and Fees 16% Emergency Federal Aid 24% Source: Center on Budget and Policy Priorities, April 2012. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 10
  12. 12. Summary of state budget woes  Many states still collecting less tax revenue and spending less than FY 2008 levels – Revenues have begun to grow again, but still far from full recovery Spending in FY 2013 . . .  Less on jobs –  Less on education –  Early in the recovery government payrolls grew, now 706,000 drop in jobs since post recession peak in April 2009 Per pupil spending is down in 30 states; up 10% in 17 states Less in general fund spending – 25+ states will have lower SGF spending in FY 2013 than in FY 2008 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 11
  13. 13. Budget difficulties: Are we done? Would that it were true! Near Term  One-time revenues and temporary tax increases must be backfilled with ongoing revenues; Federal stimulus has run its course and is the same issue  Housing continue to lag; unemployment remains inordinately high  What to watch for: – Pressure/inclination to ‘restore’ funding to reduced areas; – Pressure on property taxes – Condition of local governments Long Term:  Long-term projections show continuing decline in fiscal position – expenditures substantially outstrip revenues over time  “Fiscal gap” is equal to a permanent difference of 14 percent in revenues or expenditures (up from 12 percent in April 2012) [GAO, April 2013]  Driven by health care costs for low-income citizens as well as employees and retirees © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 12
  14. 14. Trends in tax legislation
  15. 15. Amnesty & voluntary disclosure programs  Amnesties  Current/Pending: – LA – 9/23/2013 through 11/22/2013, TBD dates in 2014 and 2015 – CT – 9/16/2013 through 11/15/2013  Recent: – KY – 10/1/2012 through 11/30/2012 – RI – 11/2/2012 through 11/15/2012 – TX – 6/12/2012 through 8/17/2012 – OH Consumers’ Use Tax – 10/1/2013 through 5/1/2013 – VDA  Unclaimed property: – DE – through 7/1/15 ■ Look-back is 1996 for VDA requests by 6/30/13 ■ Look-back is 1993 for VDA requests after 6/30/13 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 14
  16. 16. Revenue actions: Corporate tax  Rate increases – –  Connecticut – Increase corporate surtax to 20 percent for 2012-2015 for certain larger corporations Illinois – Increase corporate rate to 7 percent plus 2.5 percent PPTR through 2014 when rate drops to 5.25 percent (+2.5 PPTR) through 2024 Rate reductions – – Arizona – Phased reductions begin in 2014; drop from 6.968% to 4.9% after 12/31/2016 – Idaho – Decrease corporate income tax rate to 7.4% – Indiana – Phase-in reduction from 8.5 percent to 6.5 percent by 1/1/2017 (6/30/2015 for nonbanks) – New Mexico – Phased reductions from 7.6 percent to 5.9% in 2018 – North Carolina – Current 6.9 percent rate will drop to 6.0 percent in 2014, 5% in 2015 – Texas – Temporary franchise tax reductions for 2014 (from 1% to .975%) and 2015 (to .95%) –  Alaska – No tax on first $25,000 then graduated rate (effective 8/26/2013) West Virginia – Phased reductions from 7.75% for TY 2012 to 6.5% for TY 2014 Other –  North Dakota – annual privilege tax on financial institutions repealed; banks subject to income tax effective for tax years beginning after 1/1/2013 Numerous other states proposed, but did not enact rate changes © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 15
  17. 17. Revenue actions: Shoring up the corporate income tax Statutory expanded nexus standards  California (2011), Colorado (regulation), Connecticut (2010), Michigan, New York State/New York City (Credit Card Banks), Ohio (CAT), Washington State (2010), Wisconsin Combined Reporting Since 2003  Vermont, Texas, Michigan, New York, West Virginia, Massachusetts, Wisconsin, D.C., Virginia  New Mexico (combined reporting for big-box retailers)  Ohio (financial institution combined reporting) Add-back  Related party expense disallowance: Tennessee (2012), New York (2013 – amendments to add-back statute), Pennsylvania (2013) © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 16
  18. 18. Shoring up the corporate income tax: Economic nexus Taxpayer-Favorable Developments State-Favorable Developments Tennessee Revenue Ruling 12-27 (1/8/13) Jack Daniels Properties, Inc. (Iowa ALJ 7/28/11) In re Washington Mutual, Inc (Wash. 12/19/12) KFC Corp. (Iowa 12/30/10) In re: Scioto Ins. Co. (Okla. 5/1/12) Ohio Dep’t of Taxation finds factor-presence nexus standard constitutional in L.L.Bean (Ohio 8/10/10) Griffith v. ConAgra Brands (W. Va. 5/24/12) Capital One/Geoffrey cert petitions filed (2009) Denied 6/22/09 Praxair (N.J. Super. Ct. App. Div. 12/15/08) Reversed 12/15/09 BATSA Introduced (2009) Failed to pass BATSA Introduced (2007) Failed to pass BATSA Introduced (2008) Failed to pass Factor presence nexus regulation effective (Colo. 4/30/10) “Substantial economic presence” applied (W.V. ALJ 1/6/10) Praxair (N.J. 12/15/09) “Substantial economic presence” law adopted (Conn. 9/9/09) Factor presence nexus statute adopted (Cal. 2/20/09) “Doing business” statute expanded (Wis. 1/19/09) Capital One and Geoffrey (Mass. 1/8/09) MBNA (Ind. Tax Ct. 10/20/08) Economic nexus adopted for credit card banks (N.Y. 4/23/08) Geoffrey (La. Ct. App. 2/8/08) Department announces economic nexus position (Me. 2/08) Geoffrey (Mass. App. Tax Bd. 7/24/07) Economic nexus legislation adopted (Mich. 7/12/07) Significant economic presence test adopted (N.H. 7/5/07) Capital One (Mass. App. Tax Bd. 6/22/07) © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 17
  19. 19. Shoring up the corporate income tax: Combined reporting Combined Reporting (2003) No Corporate Income Tax Separate Return States Combined Reporting Required (AK, HI) © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 18
  20. 20. Shoring up the corporate income tax: Combined reporting (continued) Combined Reporting (2013) No Corporate Income Tax Separate Return States Combined Reporting Required (AK, HI, DC) Combined Reporting Considered in 2012 Combined Reporting Under Limited Circumstances © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 19
  21. 21. Expense add-back summary by state Narrower Royalties North Carolina Broader and intangible related expenses and all intercompany interest and other expenses Georgia Indiana Mississippi Michigan New York1 Pennsylvania Rhode Island Tennessee2 Virginia Alabama Arkansas Connecticut, DC Illinois1 Maryland Massachusetts New Jersey Ohio West Virginia Kentucky3 South Carolina4 Wisconsin5 1 To recipient outside combined report. safe harbor met, required to apply to deduct intangible and related interest paid to affiliates. 3 Management fees; but only intangible interest disallowed. 4 Includes, deductions for certain expenses related to dividends received. 5 Expanded to include intangible expenses and management fees. ** Note that Minnesota has expense disallowance for foreign operating corps; Oklahoma and North Dakota have expense disallowance for payments to captive REITs, and Texas has de facto expense disallowance. 2 Unless © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 20
  22. 22. Revenue actions: Apportionment & sourcing   Continued movement to single-sales factor – AZ: Phase-in from 2013-2016 – CA: SSF for 2013 – LA: Certain businesses in 2012; currently required for manufacturing, merchandisers – MN: Phase-in from 2007-2014 – NJ: Phase-in from 2010-2014 – NYC: Phase-in from 2009-2018 – PA: Phase-in to 100% in 2013 – UT: Phase-in 2011 for taxpayers with > 50% of total sales from economic activities classified in a NAICS codes, except certain codes (e.g., mining, finance, etc.) – VA: Phase-in begins July 2011 for retail companies; optional SFF for manufacturing – WA: When apportionment is required Market sourcing of services and/or intangibles – 2014: AZ (certain taxpayers), NE, PA – 2013: CA – 2012 or earlier: AL, GA, IL, IA, MD, ME, MI, OH, OK, UT, WA, and WI © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 21
  23. 23. Sales factor: Weighting for 2013 Current litigation allows MTC election No SSF for non-sales factor weighted taxpayers NYC 60% SF 96 NJ 90% CA Prop 39 generally requires SSF; Gillette option TBD MD SSF allowed for manufacturing 80 No income based tax SSF phase in for retail; elective for manufacturers Equally weighted (AK, HI) Equal-weighted/SFF allowed or required for certain taxpayers Double-weighted allowed or required (DC) Double-weighted/SFF allowed or required for certain taxpayers SSF phasing in (AZ, MN, NJ, NYC) SSF generally required AZ for all nonair carrier taxpayers; phasing in SSF LA SSF for manufacturing or merchandisers; 2013 for eligible businesses NOTE: Based upon general sourcing rules. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 22
  24. 24. Sales factor: Market-based sourcing for services (2013) WA – Benefit of service sourcing for B&O purposes 2014 2014 2014 2014 FL – IPA/COP rule is not supported by a statute, thus rule is invalid and Florida should be interpreted to be a market –based sourcing state No Tax IPA/COP (AK, DC, HI) Benefit/Market (AZ, NE and PA 2014) Service Performed in State (%) IPA/Market (FL) AZ – Eff. For 2014, an election is available to phase-in market sourcing for multistate service providers NOTE: Different sourcing rules may apply to intangibles © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 23
  25. 25. Legislative Developments – California
  26. 26. California Assembly Bill 93 and Senate Bill 90  Effective July 1, 2014, Assembly Bill 93 adopts a new partial sales and use tax exemption for certain property used in qualifying manufacturing, processing, biotech, and R&D activities  Bills – also make significant changes to California’s credits and incentives programs Repeals credits and deductions for enterprise zones, targeted tax areas, manufacturing enhancement areas, and Local Agency Military Base Recovery Areas effective Jan.1, 2014  Despite the repeal, hiring credits earned can be used for the full-five year period  Assembly Bill 93 adopts a hiring credit for qualified taxpayers that (1) have a net increase of jobs in California and (2) hire qualifying full-time employees on or after Jan. 1, 2014 – Employees must perform more than 50% of their services in a designated census tract area or economic development area – Limits on types of businesses that qualify and qualified employees must meet certain criteria – Signed Jul. 11, 2013 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 25
  27. 27. California Assembly Bill 92 ■ Effective for tax years beginning on or after January 1, 2014, taxpayers that exchange California property for out-of-state property in a IRC Section 1031 exchange are subject to annual information reporting requirements ‒ It is the FTB’s position that the deferred gain or loss is taxable in California when the replacement property is sold ■ The FTB will assess tax on the deferred income if reports are not filed ■ Signed June 27, 2013 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 26
  28. 28. California Proposition 30  Increases the current 9.3% highest marginal individual income tax rate by 1% for individual filers on taxable income above $250,000 ($340,000 for HOH) – 2% on taxable income above $300,000 ($408,000 for HOH), – 3% percent on taxable income above $500,000 ($680,000 for HOH) – Brackets for joint filers are double the amounts for single filers  Increase is retroactive to tax years beginning on or after January 1, 2012 and expires on December 31, 2019  For withholding on pass-through entities and real estate transactions, the maximum rate applicable to individuals is now 12.3 %  Proposition 30 also increased California’s state sales and use tax rate by ¼ percent effective from January 1, 2013 through December 31, 2016  Approved by voters Nov. 2, 2012 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 27
  29. 29. California Proposition 39 ■ Makes single-sales factor apportionment and market-based sourcing mandatory for certain corporate taxpayers effective for tax years beginning on or after January 1, 2013 – Mandatory single sales factor does not apply to taxpayers engaged in “qualified business activities” meaning that the taxpayer derives more than 50 percent of its gross receipts from agriculture, extraction, savings and loans, or banks and financial activities – Carve-out for certain cable companies  Approved by voters Nov. 2, 2012 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 28
  30. 30. San Francisco, California, Proposition E ■ Phases out the current payroll expense tax and phases in a gross receipts tax (GRT) beginning January 1, 2014  Phase-out/ Phase-in occurs over multiple years, depending on actual revenue performance over that period, with the full phase-in/phase-out effective by 2019  Rates dependent on revenue collections  Taxpayers that file a combined California corporate income /franchise tax return are required to file a combined San Francisco return  Apportionment formulas vary by industry ■ Proposition E also makes significant changes to the annual business registration fee structure  Currently, businesses pay annual business registration fees from $25 to $500 based on payroll tax liability for the preceding year  Under Proposition E, fees now range from $75 to $35,000 and are based on payroll expense (for administrative offices) or gross receipts ■ Approved by voters November 2, 2012 ■ Banks and financial corporations are exempt under state law from local GRT ■ However banks and bank subsidiaries that do not file as financial corporations under California tax law may be subject to San Francisco GRT © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 29
  31. 31. Legislative Developments – Massachusetts
  32. 32. Massachusetts H. 3535  Effective for tax years beginning on or after January 1, 2014, sales, other than sales of tangible personal property, will be sourced to Massachusetts if the taxpayer’s market for the sale is in Massachusetts – Specific rules apply in determining whether the market for certain types of sales will be deemed to be in Massachusetts • • – The sale of a service will be attributed to Massachusetts if and to the extent the service is delivered to a location in Massachusetts Intangible receipts will generally be attributed to Massachusetts if and to the extent the service used in Massachusetts Throwout rules • Any intangible receipts not specifically sourced under the statute will be thrown out of the numerator and denominator • Sales of other than tangible personal property attributed to a state where the taxpayer is not taxable or if the location of the sale cannot be determined or reasonably approximated are also excluded from the sales factor entirely ■ Veto override Jul. 24, 2013 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 31
  33. 33. Massachusetts H. 3538  Delays implementation of the FAS 109 deduction until 2015 –  The deduction was originally scheduled to be taken over a 7-year period beginning with the combined group’s taxable year that commenced in 2012 Signed Jul. 12, 2013 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 32
  34. 34. Legislative Developments – Minnesota
  35. 35. Minnesota House File 677 ■ Various corporate income tax changes effective for tax years beginning on or after December 31, 2012 – Eliminates the Foreign Operating Corporation (FOC) classification – Repeals the foreign royalty subtraction – Provides that foreign entities’ income and factors are included in the combined report – Adopts the so-called Finnigan apportionment rule – Dividends received deduction does not apply to dividends received from a captive REIT – Repeals Multistate Tax Compact  Commissioner can still participate in MTC audits © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 34
  36. 36. Minnesota House File 677 (cont.) ■ Sales and use tax changes effective for purchases after June 30, 2013 – Imposes sales and use tax on certain digital products and certain storage and repair services – Adopts click-through nexus presumption – Enacts an upfront exemption for purchases of capital equipment – Provides for a multiple-points-of-use exemption process for electronically delivered products that are concurrently available for use in more than one jurisdiction ■ Signed May 23, 2013 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 35
  37. 37. Legislative Developments – Oregon
  38. 38. Oregon Senate Bill 307 ■ Repeals Multistate Tax Compact effective tax years beginning on or after January 1, 2013 ■ Effectively readopts the MTC provisions except for Article III, relating to taxpayer election to apportion under the laws of the state or in accordance with the compact, and Article IV, relating to apportionment provisions ■ Signed Jun. 13, 2013 House Bill 3069  Repeals Oregon’s related party expense disallowance statute (ORS 314.296) effective for tax years beginning on or after January 1, 2013  Provides a retroactive exception for when the recipient of the intangible income is a related foreign corporation and the transaction had a valid business purpose  Signed Jun. 24, 2013 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 37
  39. 39. Oregon House Bill 2460  Effective for tax years beginning on or after January 1, 2014, in computing Oregon taxable income, the income or loss of any unitary group member incorporated in certain jurisdictions must be added to federal taxable income  By February 1, 2014, the Department must provide a report to the legislature on the use of tax shelters and make recommendations for addressing noncompliance related to tax shelters  Signed Aug. 1, 2013 House Bill 3477  Effective January 1, 2014, the tax exemption for certain out-of-state financial institutions conducting mortgage activities in Oregon is repealed  Signed Jul. 2, 2013 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 38
  40. 40. Legislative Developments – Ohio
  41. 41. Ohio House Bill 510  Imposes a new Financial Institutions Tax (FIT) based on equity capital at a rate of 8 mills  New regime effective for the tax year that commences January 1, 2014  Highlights of the new law: – Unlike the former corporate franchise tax, FI taxpayers that file a consolidated FR Y-9 with the Federal Reserve or a consolidated federally required “call report” will file a consolidated Ohio FIT report – For the 2014 through 2017 tax years, a deduction from a financial institution's total equity capital is allowed for investments in an Ohio-qualified Real Estate Investment Trust; A corresponding deduction applies for apportionment purposes – A single- gross receipts factor is used to apportion a financial institution’s equity capital to Ohio © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 40
  42. 42. Ohio House Bill 510 (cont.)  Under the general apportionment rule, gross receipts will be sourced to Ohio based on the proportion that a customer’s benefit with respect to the services received in Ohio bears to the benefit received by the customer everywhere – House Bill 510 provides fourteen specific examples of types of receipts that are required to be included in the Ohio numerator, including receipts from loans, credit cards, and leases  Many of the credits previously available against the franchise tax are applicable to the FIT, including community investment, job retention, research, historic rehabilitation, and new markets tax credits  Effective beginning with the 2014 tax year, the DIT tax is eliminated and DIT taxpayers, except those affiliated with a financial institution and required to be included in a consolidated FIT report, will be subject to the CAT – Note that the definition of taxable gross receipts under the CAT were not amended  Signed Dec. 27, 2012 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 41
  43. 43. Legislative Developments – Pennsylvania
  44. 44. Pennsylvania House Bill 465 Bank Shares Tax Reform ■ Effective for calendar years beginning January 1, 2014 ■ HB 465 revises ‒ ‒ Tax base ‒ Rates ‒ Nexus standard ‒ ■ Definition of a “financial institution” Apportionment Signed July 9, 2013 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 43
  45. 45. Pennsylvania bank shares tax nexus standard  Under the new law, a financial institution is taxable only if it generates gross receipts > $100,000 in a taxable year and the taxpayer: – Maintains an office or branch in PA, – Has employees, representatives, or independent contractors conducting activity on its behalf in PA, – Solicits business in PA, – Owns, leases, or uses tangible property in PA to conduct business activity, – Holds a security interest, mortgage or lien in real or personal property located in PA, – Has a basis to apportion its receipts to PA, or – Has a physical presence in PA for more than one day during the tax year © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 44
  46. 46. Pennsylvania bank shares tax apportionment  The new law requires single-sales factor apportionment –  Currently, the bank share tax requires evenly weighted three factor apportionment based on sales, deposits, and payroll Sales factor adopts market-based sourcing for essentially all receipts, including services – Currently, the bank shares tax uses a costs of performance approach for most services or time-spent for personal services © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 45
  47. 47. Income Tax Nexus
  48. 48. Nexus – Sham transaction doctrine – Allied Democq Spirits and Wines USA Allied Domecq Spirits & Wines USA, Inc. v. Comm’r of Revenue. (Mass. Appellate Tax Bd. May 22, 2013) ■ Activities undertaken to establish nexus for a foreign parent were disregarded under the sham transaction doctrine – Canadian-based parent of a U.S. subsidiary group transferred employees of certain Massachusetts subsidiaries to its payroll, and leased office space at an affiliate’s Massachusetts location to house the transferred employees – After the transfers, the Parent was included in taxpayer’s Massachusetts combined group and the Parent’s losses were used to offset the group’s income ■ In reaching its decision, the Board heavily relied on internal communications indicating that the reorganization was intended to reduce Massachusetts tax liability • Also, Board found it significant that there was no change in overall management or for the purportedly transferred employees © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 47
  49. 49. Agency Nexus
  50. 50. Agency nexus – Harley Davidson Harley Davidson, Inc. v. Franchise Tax Bd. (Ca. Super. Ct. May 1, 2013) ■ A California superior court held that two bankruptcy remote special purpose entities (SPEs) created for the purpose of bundling and selling securitized loans had substantial nexus with California ■ Although the SPEs had no physical presence in California, they had nexus with the state because of their deeply integrated relationship with their related financing subsidiaries, as demonstrated by the interdependence and circular flow of funds among the entities ‒ The SPEs were also doing business in California through their agents (the financing subsidiaries and dealers) ■ Furthermore, the SPEs were financial organizations as they were in competition with national banks © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 49
  51. 51. Economic Nexus
  52. 52. Economic nexus -- In re Washington Mutual, Inc In re Washington Mutual, Inc (Bankr. Del. Dec. 19, 2012 ) ■ A bankruptcy judge was asked to determine whether the Parent company of a group of banks was jointly and severally liable for tax on income earned by consolidated group members – Parent had no property, payroll or income directly from in-state sources – Only income related to Oregon was the receipt of dividends from subsidiaries operating in Oregon ■ Judge concluded that both the Due Process and Commerce Clauses precluded the Department from holding the parent jointly and severally liable for the tax owed by its subsidiaries – Notably, the Parent earned no income from allowing the subsidiaries to use its marks and the income the Department was seeking to tax was not the Parent’s income, but was income earned by the subsidiaries – Holding the Parent liable for the corporate excise tax of its subsidiaries merely because it allowed the free use of its trademarks and received a dividend would “deeply burden interstate commerce” © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 51
  53. 53. Economic nexus -- W.L. Gore & Assocs W.L. Gore & Assocs., Inc. v. Comptroller (Md. Ct. Spec. App. Jan. 24, 2013)  Out-of-state holding companies with no physical presence in Maryland were subject to corporate income tax – – Subsidiaries depended on parent company for their existence and enjoyed functional integration and control –  Companies had “sufficient nexus” with Maryland because they were unitary with parent company who conducted business in state In a footnote, the court tried to address the taxpayer’s argument that it was blurring the principles of constitutional nexus and a unitary business, noting that “where, as here, a parent company undoubtedly has a requisite nexus, the only question is whether the subsidiary partakes in the parent’s unitary business; if so, it inherits the parent’s nexus, and the tests are effectively merged The court also held that applying the parent’s Maryland apportionment percentage to the subsidiaries’ income was proper © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 52
  54. 54. Economic nexus -- Matter of Scioto Ins. Co. Matter of Scioto Ins. Co. v. Oklahoma Tax Commission (Okla. May 1, 2012) ■ Issue before the court was whether the Commission could tax an out-of-state insurance company that licensed intangibles to an Oklahoma taxpayer that subsequently sublicensed the marks to Oklahoma restaurants – Insurance company did not receive royalty income directly from Oklahoma restaurants – Sub-licensor deducted amounts paid to the insurance company on its Oklahoma returns ■ Court held that Oklahoma could not tax the income derived from a contract entered into outside of Oklahoma and no part of which was performed in the state – Furthermore, the insurance company was entitled to royalty income regardless of whether the Oklahoma restaurants actually paid for the use of the marks © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 53
  55. 55. Economic nexus – Tennessee Tennessee Revenue Ruling 12-27 (Jan. 8, 2013) ■ Department addressed whether a company licensing patents to an affiliate that were ultimately incorporated into products sold in Tennessee was subject to Tennessee franchise and excise taxes – For Tennessee franchise and excise tax purposes, “doing business” is defined as “any activity purposefully engaged in, within Tennessee, by a person with the object of gain, benefit, or advantage” – The company’s sole contact with Tennessee was the eventual sale and delivery of products manufactured outside the state ■ Under these facts, the Department determined that the company’s contact with Tennessee was “too remote and indirect” to be characterized as an activity purposefully engaged in within Tennessee for profit © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 54
  56. 56. Economic nexus -- ConAgra Brands Griffith v. ConAgra Brands (W. Va. May 24, 2012) ■ Issue was whether a taxpayer that licensed intangibles was “doing business” in the state – Taxpayer licensed grocery-related brand names to related and unrelated parties – All of the manufacturing occurred outside of West Virginia – Taxpayer had no control over how marks were used or where products were distributed, but products bearing its marks and brand names were eventually sold in West Virginia stores ■ Court held that the taxpayer did not have Due Process or Commerce Clause nexus with West Virginia – Did not engage in any solicitation activities in-state and did not sell any products directly to West Virginia retailers or wholesalers – Simply placing products in the stream of commerce was not enough © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 55
  57. 57. Tax Base
  58. 58. Tennessee non-conformity to excess inclusion income ■ KPMG received correspondence from Tennessee favorably adjusting a client’s Tennessee returns with explanation that the state does not require excess inclusion income to be included in the Tennessee excise tax base ‒ Tenn. Code Ann. 67-4-2006(a)(1) was cited as support that the Tennessee excise tax is federal taxable income or loss before the net operating loss deduction and special deductions ‒ The state explained that it does not require tax to be paid on excess inclusion income nor does the state follow the federal treatment in computing loss carryovers for years in which there was excess inclusion income ■ Similar interpretations of law may be applied to other states that start with line 28, federal taxable income (before net operating loss deduction and special deductions) © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 57
  59. 59. Michigan franchise tax – Equity of subsidiaries ■ Much confusion on how to report and eliminate equity of subsidiaries ■ Department of Treasury recently issued guidance (Notice to Taxpayers Regarding Financial Institution Unitary Filing and Reporting of Eliminations for the MBT and CIT, 09/20/2013) ‒ Each member of a unitary group calculates net capital tax base separately ‒ May eliminate investment in positive equity capital of other members of the same group ‒ Taxpayers with negative equity before eliminations should report equity as zero before eliminations ‒ If eliminations cause equity to be negative, a negative number is reported on the equity line ‒ Group must have positive or zero equity capital after eliminations ‒ Taxpayers that did not properly report subsidiary equity required to file amended returns even if no additional tax due © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 58
  60. 60. Example GAAP Books Inv. in sub HC $ Other assets $ Sub1 995 $ Eliminations 0 $ (1195) $ 0 100 $ 1000 2100 (1795) (5) (2150) (50) GAAP equity capital 1000 (350) Liabilities MI equity capital 200 Bank Consol. Equity 200 995 (200) $ (795) © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 $ 995 (1195) (50) $ 0 59
  61. 61. Allocation and Apportionment
  62. 62. Allocation and apportionment – Property factor First Marblehead Corp. v. Comm’r of Revenue (Mass. App. Tax Bd. Apr. 17, 2013) ■ A taxpayer that (1) owned interests in sixteen trusts that purchased and securitized student loan portfolios and (2) received interest income from the trusts, was considered a financial organization because it was engaged in lending activities through the trusts and was in substantial competition with banks ‒ Taxpayer had no employees or offices in Massachusetts, but had a Massachusetts address where its books and records were maintained ■ Because the taxpayer had no regular place of business within or outside Massachusetts, all of the loans were included in the Massachusetts property factor ‒ Massachusetts was the taxpayer’s conceded commercial domicile © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 61
  63. 63. New Jersey proposed market/customer sourcing regulations ■ Division of Taxation recently issued proposed regulations that would change the method of determining “where the service is performed” for receipts factor purposes from a cost of performance sourcing methodology to market-based sourcing for tax years beginning on or after January 1, 2014 ■ Where actual costs of performance occur or time is spent in performing a service are no longer applicable when determining receipts sourcing in light of the move to single sales factor (which will be fully phased in for the 2014 tax year) ■ Interestingly, when New Jersey adopted single sales factor, the legislature only changed the allocation formula weighting, and did not alter the statutory numerator sourcing rule where New Jersey receipts include revenue from “… services performed within the State, …” © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 62
  64. 64. Upcoming Amnesty and Special Voluntary Disclosure Programs
  65. 65. Delaware unclaimed property voluntary disclosure program  Administered by Secretary of State  Holders that request participation prior to June 30, 2013 and remit full payment prior to June 30, 2014 are not required to report property issued prior to 1996  Holders that request participation between July 1, 2013 and June 30, 2014 and remit full payment prior to June 30, 2015 are not required to report property issued before 1993 – Property holders that have evidenced their intent to participate in the current VDA program or a voluntary self-disclosure program prior to June 30, 2012, will be able to take advantage of the shortened look-back periods in the new legislation if they make their payments by June 30, 2014 or June 30, 2015 deadlines  Property holders that have received a notice of examination from the State Escheator or that have been referred to the State Escheator by the Secretary of State are not eligible to participate  Law prohibits State Escheator from commencing an audit of holders that have indicated intent to participate (in writing) on or before June 30, 2014 © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 64
  66. 66. Connecticut House Bill 6704  Establishes a tax amnesty program to run from September 16, 2013 through November 15, 2013 applicable for all taxes, except motor carrier fuels taxes, for any tax period ending on or before November 30, 2012 – Eligible taxpayers can receive a penalty and partial interest abatement – Post-amnesty penalty of 25 percent applies to nonfilers that fail to take advantage of the amnesty opportunity © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 65
  67. 67. Louisiana House Bill 456  Establishes a three part/ three year tax amnesty program; first period will be held from on September 23, 2013, and will run through November 22, 2013 – Taxpayers that participate in the first part will receive a 50 percent interest abatement and full penalty abatement – Participants in the 2014 and 2015 programs will receive only a partial penalty abatement and no interest waiver – Applies to all taxes administered by the state, except motor fuel taxes and certain penalties for failing to submit certain information reports – Post-amnesty penalties and collection fees authorized © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 66
  68. 68. Post-amnesty penalty – Marriott Int’l Marriott Int’l, Inc. v. Hamer (Ill. App. Ct. Aug. 22, 2012) ■ Issue was whether the taxpayer was subject to the post-amnesty double interest penalty – Illinois’s 2003 tax amnesty allowed taxpayers that paid in full “all taxes due” to receive an abatement of interest and penalties • – A double interest penalty applied to amounts due but not satisfied during the amnesty Taxpayer filed returns for the 2000 through 2002 tax years, but due to an IRS audit was later required to amend its Illinois returns for those years and pay additional tax ■ Court stressed the definition of the phrase “all taxes due,” which was not defined by the statute – Based on a plain reading of the Illinois tax statutes and the IRC, the court determined that this phrase meant all the taxes due on the date fixed for filing the tax return regardless of whether the taxpayer was aware of the tax during the amnesty period © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 67
  69. 69. Post-amnesty penalty – Metropolitan Live Ins. Metropolitan Life Ins. Co. v. Hamer (Ill. S.Ct. Jun. 20, 2013) ■ Although the facts were almost identical to those in Marriott, the appeals court held the phrase “all taxes due” included only taxes that were known to be due at the time the amnesty program was held – Taxpayer timely filed returns for the 1998 and 1999 tax years, but owed additional Illinois tax after a lengthy and complex IRS audit ■ Illinois Supreme Court, in reversing the appeals court, determined that the phrase “all taxes due,” meant all taxes due as of the date the original return was required to be filed, rather than those known to the taxpayer ■ Further, the court held that the imposition of the penalty did not violate the taxpayer’s substantive due process – In the court’s view, the Amnesty Act bore a reasonable relationship to the state’s legitimate interest in raising revenue – Legislature had provided taxpayers an opportunity to avoid the double-interest penalty by making a good faith estimate of their tax liability. © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 68
  70. 70. Post-amnesty penalty – UPS UPS v. Div. of Taxation (N.J. App. Mar. 7, 2013) ■ Appeals court held that a tax court judge properly abated late payment and post amnesty penalties – Late payment penalties should have been waived for reasonable cause because the substantive tax issue was one of first impression in New Jersey and taxpayers had a reasonable basis for their position • – Court found it significant that taxpayers would have received a reasonable cause waiver if they had paid assessments, rather than pursuing an appeal Court agreed that the post-amnesty penalties should not have been waived or abated by the tax court; rather, these penalties did not apply to liabilities that were not known to the taxpayer at the time the amnesty program was held • Court noted the liability was only determined after a prolonged audit and could not have been ascertained by a reasonable inquiry © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 69
  71. 71. Marketplace Fairness Act
  72. 72. Marketplace fairness Act of 2013 Marketplace Fairness Act of 2013 (S. 743) ■ After being routed through an expedited voting process, S.743 passed the Senate May 6, 2013 in a 69-27 vote ■ If enacted, S. 743 would grant certain states the authority to require remote sellers to collect and remit sales and use taxes on sales into the state ■ Bill currently in House, where it arguably faces greater opposition © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 71
  73. 73. Why should banks care? ■ ■ ■ Only a handful of states currently tax traditional banking services, e.g., ‒ Iowa taxes fees relating to a checking account ‒ New Mexico taxes bank services except those related to a loan BUT several states considered legislation last year that would expand their sales tax base to cover some business-to-business services and certain financial services – Examples: North Carolina, Louisiana, Minnesota, Ohio, Kentucky, Maine, and North Dakota – Arizona attempted to tax sales of stocks and bonds, monetized bullion, etc. If S. 743 is enacted, any bank performing these services may need to register with a state and begin collecting sales or use taxes on services provided to customers in states that tax these services ‒ Even if the bank does not have a branch or other physical location in that state © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 72
  74. 74. Serious compliance challenges Major “game-changer” in state and local sales taxation of interstate commerce Issues for sellers ■ Registration in expanded number of states ■ Expanding collection to larger number of states ■ Acquiring, retaining, managing and retrieving exemption certificates ■ Taxability determinations in multiple states ■ Appropriate rate determination ■ Remittances and filing ■ Integration of automated systems ■ Managing additional audit demands ■ Dealing with increased “vendor-billed” tax © 2013 KPMG LLP, a Delaware limited liability partnership and the U.S. member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. All rights reserved. NDPPS 145325 73
  75. 75. Questions

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