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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Corporate Tax

Date & Time
  • event Date

    Thursday, August 29, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    110 minutes

Credit Information

  • BARBRI is a NASBA CPE sponsor and this 110-minute webinar is accredited for 2.0 CPE credits.

$247.00
CPE
ALL

This webinar will discuss how federal legislative changes to the ability to deduct research and development (R&D) expenditures impact state income taxes. Our R&D credit veterans will review the current federal requirement to capitalize R&D, states' responses to these changes, best practices for deducting or amortizing R&D expenses in conforming and nonconforming states, and the state of proposed legislative corrections.

Faculty

Jamie Overberg
Partner
TaxOps Minimization, LLC

As a tax partner for TaxOps Minimization, Ms. Overberg specializes in executing and managing a wide range of tax minimization strategies, including all aspects of the Research and Development tax credit as well as financial reporting requirements under FAS 109 and Fin 48. In addition, she works with Section 199, Section 263A, and Section 382 analysis, calculations, and reporting. She works primarily with clients in the automotive, engineering, manufacturing, software, biotech and oil and gas sectors, and has worked on numerous R&D tax controversy engagements

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Stacey L. Roberts
State and Local Tax Director
TaxOps

Ms. Roberts has been making state and local tax (SALT) less taxing for thousands of businesses over the last 25 years. As a director of the SALTovation team at TaxOps, she guides dynamic businesses through compliance and strategic planning focused on minimizing risk and strengthening tax positions. Ms. Roberts honed her specialty at Andersen Worldwide/Andersen LLP, KPMG and Deloitte before moving in-house with a Fortune 500 company to administer state and local tax. She has also led the national SALT practice at a regional firm. Ms. Roberts is a member of the Colorado Legislative Task Force Concerning Tax Policy and a frequent speaker, instructor and author on SALT issues for industry and professional organizations.

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Description

Before the Tax Act of 2017, R&D costs were deductible. Beginning in 2022, these costs must be capitalized and amortized over five years if they are domestic expenses or 15 years if foreign. Compounding the significant increase in taxes due by businesses with R&D are the additional state taxes that could be due. States may conform to federal legislation immediately, as of a specific date, or only with specific code sections. Congress may reinstate the ability to expense R&D retroactively but states that follow federal legislation will still comply at varying dates.

In states that have not conformed, opportunities exist to expense R&D at the state level. California allows a full deduction for R&D expenditures and Tennessee has decoupled from the new Section 174 rules. Some states have different rules based on the entity type. Flow-through entities in Pennsylvania can expense R&D costs while corporations cannot. SALT advisers working with multistate entities must understand the impact of recent Section 174 revisions on state taxes.

Listen as our panel of R&D experts discusses the recent 174 legislative changes and the impact of these changes on state taxes.

Outline

  1. Section 174 legislation update
  2. R&D costs
  3. State conformity
    1. Nonconforming states
    2. Conforming states
    3. Other states
  4. Implementing Section 174 capitalization requirements
  5. Revenue Procedure 2024-12
  6. Best practices

Benefits

The panel will cover these and other key issues:

  • What costs are included in the definition of R&D?
  • Which states are nonconforming states and how is the deduction handled in these states?
  • How is a change in accounting method made under Revenue Procedure 2024-12?
  • What is the current status of retroactive changes to restore the R&D deduction?

NASBA Details

Learning Objectives

After completing this course, you will be able to:

  • Identify certain states that conform with federal Section 174 legislation
  • Determine what costs are considered R&D costs
  • Decide how to handle the expense deduction in certain nonconforming states
  • Ascertain how to properly make the accounting method change for Section 174 revisions

  • Field of Study: Taxes
  • Level of Knowledge: Intermediate
  • Advance Preparation: None
  • Teaching Method: Seminar/Lecture
  • Delivery Method: Group-Internet (via computer)
  • Attendance Monitoring Method: Attendance is monitored electronically via a participant's PIN and through a series of attendance verification prompts displayed throughout the program
  • Prerequisite: Three years+ business or public firm experience preparing complex tax forms and schedules, supervising other preparers or accountants. Specific knowledge and understanding of SALT taxation, nexus and apportionment as it applies to multi-state businesses.

Strafford Publications, Inc. is registered with the National Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of Accountancy have final authority on the acceptance of individual courses for CPE Credits. Complaints regarding registered sponsons may be submitted to NASBA through its website: www.nasbaregistry.org.