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LEARNING RESOURCES

Multi-State Taxation — Tax Staff Essentials
about the voluntary disclosure period. The lookback
Does a business have nexus in a particular period for the exposure is usually limited to three or
jurisdiction? At the current rate of change, you can’t four years, depending upon the state involved.
afford to have out-of-date knowledge of this critical
tax area. Perhaps the biggest advantage of a voluntary
disclosure is that it starts the statute of limitation
CPE SELF-STUDY running. For tax returns that are unfiled, a state
can usually go after a business indefinitely. In other
words, theoretically, 20 years from now, a state
could tell a business it is responsible for 20 years
AICPA & CIMA National Tax & Sophisticated of taxes if no returns were filed. By performing a
Tax Conference voluntary disclosure and filing future returns, the
Oct. 31–Nov. 1, Washington, D.C., and live online company can start the running of the statute of
The event for timely updates and new regulations. limitation and prevent such a situation.
Hear from the IRS on what’s important and more. Filing a voluntary disclosure can clean up not
just a sales and use tax issue but other types of tax
CONFERENCE matters as well. Even if the business does not have
nexus for sales and use tax purposes, the business
might be liable for other types of taxes, such as a
For more information or to make a purchase, go to aicpa.org/cpe-learning limited liability entity tax, a stock tax, or a franchise
or call the Institute at 888-777-7077.
tax, to name a few. The type of tax depends upon
the state involved. In making a voluntary disclosure,
determining the tax types for which the business is
liable is key.
A business may also reap other benefits from
AICPA RESOURCES clearing its tax liabilities and reporting properly
in a state. One huge benefit can be getting the tax
Articles issues resolved before selling the business. Buyers of
“The State of Economic Nexus,” The Tax Adviser, Oct. 2021 a business will perform their state tax due diligence
“Three Years After Wayfair: Future Impact and Lingering Issues,” review to determine what type of risk is inherent in
The Tax Adviser, Sept. 2021 the purchase. If a seller has unresolved tax issues, a
“A Practical Guide to Economic Nexus,” JofA, June 2021 buyer will likely want to mitigate its risk by forcing
the business to pay the liabilities or put a large sum
Podcast episode of money in escrow, or it will pass on the acquisition
“Sales Tax: Nearly 4 Years After Wayfair, What’s on the Horizon,” altogether. Thus, the consequences to a company of
JofA, Jan. 27, 2022 sticking its head in the sand and not resolving its
liabilities could be greater than just the tax amounts
Online resources owed to the state(s).
AICPA Wayfair resource page BE PREPARED FOR A FIGHT
Wayfair Client Notification Letter
SALT Roadmap — State and Local Tax Guide A business should be wary when a state sends an
audit notice or nexus questionnaire, even if it is
already registered with the state taxing authority.
For Tax Section members
2021 State Tax Nexus Guide The inquiry should be taken very seriously and an
2021 State Tax Nexus Checklist appropriate response provided to the state.
Many states are aggressively enforcing new sales
tax nexus rules, so businesses should be prepared for
The Tax Adviser and Tax Section
AICPA Tax Section members receive a subscription to The Tax Adviser digi- a fight. Currently, the biggest area of concern for
many businesses will be states where inventory is
tal replica online in addition to access to a tax resource library, member- present due to a fulfillment service provider, such as
only newsletter, and four free webcasts. The Tax Section is leading tax Amazon’s FBA service. A company can mitigate its
forward with the latest news, tools, webcasts, client support, and more.
overall exposure to an assessment of sales and use
Learn more at us.aicpa.org/tax-section.
tax by a state by being proactive and performing a
voluntary disclosure with the state. ■

10 | Journal of Accountancy September 2022