Jones Walker Presents Annual State & Local Tax Seminar in Houston, TX on September 20

The Jones Walker LLP State and Local Tax Team is back live and in-person with a day-long program on September 20, 2022, titled Jones Walker: Gameshow! This state and local tax workshop will address all the relevant issues that have been picked up for a new season, as well as discuss and preview all the new additions to the lineup. First, you will be guided through the Wheel of “Mis”Fortune of state and local tax procedure. Then, get ready to deal with all the legislative and administrative updates that are grabbing the attention of viewers. Next, we will let you confront your software fears.

Join us at lunch for Whose Line Is It, Anyway?, featuring a moderated panel of key state tax administrators from Louisiana, Mississippi, Texas, and Alabama. The administrators will provide their perspective on recent tax developments.

  • Jennifer Burleson, Director, Tax Policy Division, Texas Comptroller of Public Accounts
  • Chris Graham, Commissioner, Mississippi Department of Revenue
  • Mary Martin Mitchell, Acting Director, Tax Policy and Governmental Affairs Division, Alabama Department of Revenue
  • Kevin Richard, Secretary, Louisiana Department of Revenue
  • Arthur Parham, Moderator, Retired General Tax Advisor – Entergy

Next, it’s time for Jeopardy! with an interactive game addressing various recent hot SALT topics. We’ll then check out SALT case updates, Family Feud-style. Finally, we will give a report of the national SALT battles raging across the country. Afterwards, we’ll wrap things up with a Q&A.

Click here for the full agenda.

When: Tuesday, September 20 | 8:00 am – 5:30 pm

Where: Hilton Americas-Houston | 1600 Lamar St | Houston, TX 77010

Fee: $150 per registrant
Company group rate: $150 for first registrant, $100 for each subsequent registrant

Questions or to Register: Contact Courtney Farley at cfarley@joneswalker.com

This program is intended for tax professionals with starter to advanced state & local tax experience and those doing business in Louisiana, Mississippi, Alabama, and along the Gulf Coast. Program not open to tax collectors. An application for accreditation of this activity has been submitted to the Mandatory Continuing Legal Education Committee of the Louisiana Supreme Court and is pending. An application for accreditation of this activity has been submitted to the MCLE Committee of the State Bar of Texas and is pending. The full program has been recommended for 9 hours of Texas and Louisiana CPE.

It’s That Time of Year Again! The Property Tax Rolls Will Soon Open For 2022 (2023 For Orleans Parish)

Like that much anticipated annual visit to the doctor before school starts, it is again time for Louisiana assessors to open their rolls for taxpayer review, and hopefully no one will need any shots afterwards (but if so, make it tequila!). Many assessors begin the two-week exposure period on August 15th, but the dates vary by parish. As such, if you want to review the fair market value placed on your property by an assessor in a particular parish, you can find the open book dates on the Louisiana Tax Commission’s website.

Below is a brief refresher on the basics of appealing the assessed value of a property:

  • Visit the assessor’s office during the open book dates and provide any data that supports your opinion of the property’s value, including any evidence of functional or economic obsolescence.
  • If no resolution with the assessor is possible, file an appeal with the local Board of Review (typically, the Police Jury or Parish Counsel) using the provided form 3101. The form can be found on the Commission’s website.
  • Attend the Board of Review hearing, again the dates of the hearing in each Parish vary and can be found on the Commission’s website.
  • Upon receipt of the Board of Review’s decision, if still unsatisfied, file an appeal with the Commission on the provided form 3102. The form can be found on the Commission’s website.
  • Once docketed at the Commission, a taxpayer can set the matter for hearing, or conduct any necessary pre-hearing discovery that it believes is necessary prior to a hearing.

One very important practice tip relates to La. R.S. 47:1989, the statutory basis for review of appeals by the Commission. The statute has been revised to require taxpayers to provide all “evidence” that the taxpayer intends to present at a “correctness” challenge before the Commission to the assessor prior to the close of the deadline for filing an appeal with the local Board of Review. The Commission can allow additional evidence if the Commission concludes that the additional evidence is material and there was good reason for the taxpayer’s failure to present it to the assessor (i.e., it was not available at the deadline). If a taxpayer decides to hire an appraiser or other expert to provide an appraisal or other report, that work does not have to be completed by the Board of Review deadline. The statute directs that good reason for the failure to timely present the expert’s work product “shall be” presumed, if any report or appraisal is provided to the assessor within thirty (30) days of the taxpayer’s receipt of the expert report, and at least twenty-five (25) days prior to any hearing before the Commission. In addition, the statute lists other types of publicly available evidence that is considered to always be admissible. See La. R.S. 47:1989(c)(2)(a)(xi).

Because an appeal of the assessment must be lodged with the local Board of Review seven (7) days prior to the public hearing, a taxpayer does not have a large window of opportunity to provide evidence to the assessor as required by the above-referenced statutes. If you believe that a correctness challenge is possible for 2022, it is imperative that any evidence that will support your opinion of the fair market value of the property be gathered as soon as possible for submission to the assessor.

Should you have any questions regarding the foregoing, please contact Jay Adams, 504-582-8364 or via email at jadams@joneswalker.com.

John Fletcher Quoted in Law360 and TaxNotes on Mississippi Proposed Tax on Cloud Computing Services

Jones Walker SALT partner, John Fletcher, was quoted in the Law360 article “Miss. Pulls Proposed Rule To Tax Cloud Computing Services – Law360” as well as the Tax Notes article “Mississippi Revokes Proposed Sales Tax Reg for Online Computing Services.” Referring to the Mississippi Department of Revenue’s recently withdrawn rule change that would have applied sales tax to cloud computing services, John notes that the rule change was likely withdrawn in order to focus on the newly formed committee, which will meet to study and offer recommendations on the issue for the next legislative session.

Louisiana Tax Commission Sets Dates for 2023 Rules and Regulations Sessions

For anyone interested in Louisiana property tax issues, the Louisiana Tax Commission has given notice of the dates for its annual Rules and Regulations hearings. Any interested party can submit a proposal to amend the current regulations to the Commission during this process. The Commission accepts written proposals that are presented in an open Commission meeting, followed by rebuttals from any opposing interests. The Commission announces any changes during an adoption hearing. The submission deadlines and hearing dates are set forth in the attached notice. If you have any questions, contact Jay Adams or any member of the Jones Walker SALT Team.

John Fletcher Addresses Graduates at Delta State’s 95th Commencement Ceremony

I was honored as the President of the Delta State University Alumni Association to address the new graduates at Delta State’s 95th Commencement Ceremony last Friday. Pictured with me are DSU President William LaForge and the keynote speaker, alumnus Walt Bettinger II, CEO of The Charles Schwab Corporation.  Not pictured but also on stage was alumnus David Abney, former CEO and Chairman of UPS, who hooded Bettinger as he received an honorary Ph.D. from the University.

 

Mississippi Enacts Pass-Through Entity Income Tax Election/ SALT Cap Workaround

Mississippi recently passed a SALT cap workaround in the form of a flow-through entity election. Consistent with the roughly 26 other states having adopted similar schemes, the Mississippi bill presents several grey areas and questions that will need to be addressed through Department of Revenue guidance or possible technical corrections.

H.B. 1691, signed into law by Governor Reeves on April 14, authorizes certain pass-through entities to pay an entity-level income tax in lieu of the partners/owners paying income tax on those amounts at the individual level, thereby freeing up other state and local taxes for the limited federal itemized deduction (the SALT Cap). An “electing pass-through entity” is defined as a partnership, S Corporation or similar pass-through entity having made an election pursuant to the new code section (not yet codified or designated). The election will be made by submitting a designated form to the Department of Revenue on or before the 15th day of the third month following the close of the tax year (typically, March 15).  Once made, the election is binding for all subsequent years until formally revoked by the entity.

The bill contains an interesting approval process that may override the internal voting procedures for many entities. To make or revoke an election, there must be “a vote by or written consent of the members of the governing body of the entity as well as a vote by or written consent of the owners, members, partners or shareholders holding greater than fifty percent (50%) of the voting control of the entity, within the time prescribed in this subsection.” Thus, the approval must be made at two levels even though management decisions may be centralized in a board or other governing body, the vote must pass by a specified threshold that may not be consistent with other voting rights/thresholds provided under an entity’s governance documents, and the votes must take place within a specified time frame.  A strict reading of the vote requirement may also pose questions whether a simple manager governance structure constitutes a centralized board or “other governing body.”

Once made, each “owner, member, partner or shareholder” (not explicitly limited to individuals) will report his or her distributive share of the entity’s pass-through income, but that income will be exempt at the owner level. Each such owner, etc. in turn shall be allowed a credit against the taxes imposed under this chapter in an amount equal to his or her pro rata or distributive share of tax paid by the electing pass-through entity with respect to the corresponding taxable year. It is unclear why an individual Mississippi credit would be required with respect to this income given that it is explicitly exempt from tax, but one would assume no double benefit was intended.

The adjusted basis of the owners, members or partners of an electing pass-through entity in their ownership interests in the electing pass-through entity shall be calculated without regard to the election under this new provision.

Several additional details may need to be addressed under the new legislation:

  • It is unclear how this new provision will operate in a tiered structure containing multiple pass-through entities, specifically whether the owner-level exemption is contingent on a tax payment having been made by that immediate pass-through entity as opposed to one further up the chain;
  • Presumably income distributable to a corporate owner will be exempt as well as that received by individuals;
  • It is unclear whether paying tax at the entity level will sever nexus for any corporate owners whose sole contact with the state is via that pass-through entity;
  • The basis calculation rules in theory should help minimize federal/state differences in gain or loss calculations on a sale of an ownership interest;
  • The bill does not appear to remove the existing option of filing composite returns on behalf of nonresident partners;
  • The bill does not appear to alter how Mississippi apportions partnership income at the entity level, or the method of “flowing up” the entity’s apportionment factors for franchise tax purposes;
  • Additional issues may arise as to how a resident partner claims the credit for income taxes paid to other states on any income exempt in Mississippi under this new law.

The bill is effective January 1, 2022, but the deadline for making an election for the 2021 tax year had already lapsed prior to passage so unless a technical correction is passed, it effectively is available for the 2022 year and thereafter.

Jones Walker LLP will continue to monitor this issue and will pass along any additional guidance that might be issued by the Department.

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