1. Recent SALT Developments Rick Strohmaier, Partner Grant Thornton LLP

2. Recent SALT developments
Income/franchise tax
Sales tax nexus
Unclaimed property

3. Income/franchise tax Apportionment
Multistate Tax Commission adopted amendments to Model General Allocation and Apportionment Regulations
Most changes reflect shift to market-based sourcing for sales other than sales of TPP
Provides detailed sourcing rules
Montana enacted legislation adopting market-based sourcing and throwout rule
Tax years beginning after Dec. 31, 2017
Connecticut Department of Revenue Services issued guidance on single sales factor apportionment and market-based sourcing
Detailed market-based sourcing provisions with many examples

4. Income/franchise tax Apportionment (cont'd)
Tennessee enacted single sales factor apportionment election for certain manufacturing businesses
Tax years beginning on or after Jan. 1, 2017
In Genentech, Massachusetts Supreme Judicial Court rejected claim that single sales factor apportionment formula for manufacturers violates Commerce Clause
California FTB issued two Technical Advice Memoranda to clarify certain matters for apportioning taxpayers
TAM : Apportioning net recognized built-in gains for purposes of computing S corporation built-in gains tax
TAM : Application of IRC Sections 382 to 384 (corporate ownership changes) for California apportionment purposes

5. Income/franchise tax Tax reform
Minnesota omnibus tax bill
Financial institution apportionment rules apply to broader scope of entities
Exemption for insurance companies narrowed
Certain insurance companies must be included in combined reports
New York budget bill closes tax loopholes, extends top personal income tax rate for two years
Non-captive RIC/REIT provisions
Treatment of disregarded entities for tax credit purposes
Sales of partnership assets subject to IRC Section 1060
Kansas legislature, overriding a veto, enacted legislation that increases personal income tax rates and repeals exemption for non-wage business income

6. Sales tax nexus
Indiana, North Dakota and Wyoming have recently enacted bright-line nexus (anti-Quill) laws for remote sellers
Required to collect sales tax if more than $100,000 in sales or at least 200 separate transactions in state during a calendar year
Indiana and Wyoming: Effective July 1, 2017
North Dakota: Contingent on U.S. Supreme Court overturning Quill
In Wayfair, South Dakota circuit court held law challenging Quill's physical presence requirement is unconstitutional
First time a court has considered constitutionality of legislation that disregards physical presence requirement for sales tax
Massachusetts DOR has announced bright-line sales tax nexus standard for remote Internet vendors
Effective July 1, 2017, over $500,000 in sales and at least 100 transactions in state

7. Sales tax nexus (cont'd)
In American Catalog Mailers, Tennessee chancery court granted order prohibiting enforcement of bright-line nexus rule
Out-of-state dealers with annual sales in state greater than $500,000
Minnesota omnibus tax bill extends nexus to marketplace providers
Entities that facilitate sales for retailer by listing or advertising in any forum and collecting and transmitting payment to retailer
Effective on earlier of (1) July 1, 2019; or (2) Quill overturned
Colorado DOR entered into settlement agreement for remote seller notice and reporting requirements
Non-collecting retailers must provide: (1) notice to purchasers they may be subject to sales tax; (2) annual summary of sales to purchasers; and (3) annual customer information report to DOR
Enacted in 2010, but suspended due to protracted litigation
Will begin enforcing July 1, 2017

8. Unclaimed property
In February 2017, Delaware enacted historic overhaul of unclaimed property law
Enacted partially in response to U.S. District Court ruling in Temple-Inland
Certain audit procedures violated substantive due process
Technique used to estimate holder's Delaware unclaimed property liability subjected taxpayer to liability imposed by multiple jurisdictions
Adopted many concepts and provisions of 2016 Revised Uniform Unclaimed Property Act
Certain holders under audit may be able to enter a voluntary disclosure program or expedite the audit

9. Questions?

10. Presenter Contact Information
Rick Strohmaier, Tax Partner
State and Local Tax
Grant Thornton LLP
171 N. Clark Street, Suite 200
Chicago, IL 60601
D: (312)

11. Disclaimer
This Grant Thornton LLP presentation is not a comprehensive analysis of the subject matters covered and may include proposed guidance that is subject to change before it is issued in final form. All relevant facts and circumstances, including the pertinent authoritative literature, need to be considered to arrive at conclusions that comply with matters addressed in this presentation. The views and interpretations expressed in the presentation are those of the presenters and the presentation is not intended to provide accounting or other advice or guidance with respect to the matters covered. For additional information on matters covered in this presentation, contact your Grant Thornton, LLP adviser.