Corporate Tax Planning for Out-of-State Workforces: SALT Compliance, Non-Income Based Taxes and Other Considerations

The use of out-of-state workforces is becoming more and more prevalent among companies making strides to limit operational costs. These companies sometimes engage workforces across the country without considering various state and local tax pitfalls.

A company engaging contractors or employees outside of the state may unintentionally establish nexus with another jurisdiction, subjecting the company to multistate taxation. Tax nexus with another state brings about a variety of tax challenges requiring strict adherence to the tax rules and regulations of each state where workers live. Compliance may require registration with a jurisdiction’s secretary of state, department of taxation, and labor department, on top of any required regulatory and licensing registrations.

Effective state and local tax planning for a company engaging out-of-state workforces requires tax professionals and advisers to consider all tax challenges, including payroll, franchise and income taxes, non-resident withholding, non-income based taxes (such as sales and use tax), and other consequences of using out-of-state workforces. Also, advisers must carefully consider the company structure to minimize tax issues resulting from inaccurate apportionment impacting the proper allocation of income and loss to a jurisdiction.

Listen as our panel discusses state tax compliance challenges when using out-of-state workers, registration and reporting issues, and planning techniques to avoid unintended tax liability and penalties.

1. Nexus and state tax consequences of using out-of-state workforces
2. State registration and reporting compliance
3. Payroll taxes and potential non-resident withholding
4. Non-income based taxes and planning
5. Business structure and avoiding miscues regarding apportionment and allocation
6. Best practices and critical planning techniques to prevent or minimize unintended tax liability

The panel will address these and other priority issues:

• Nexus in the context of engaging workforces in multiple jurisdictions
• Latest developments and state positions
• Nexus considerations after the U.S. Supreme Court Wayfair decision
• Potential federal and multistate solutions
• Payroll taxes and non-resident withholdings
• Impact of non-income based taxes
• Navigating state registration and reporting
• Apportionment and allocation issues
• Best practices for avoiding or minimizing unintended tax liability

Learning Objectives

After completing this course, you will be able to:

• Identify circumstances that cause a company’s registration with a state taxing authority
• Recognize state and local tax issues associated with the use of out-of-state workforces
• Identify payroll and income tax issues for out-of-state workforces
• Understand state regulations and circumstances giving rise to non-resident withholdings
• Ascertain methods of navigating state reporting requirements
• Identify apportionment and allocation issues of income and losses
• Establish best practices for your company’s engaging out-of-state workforces

• 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 at mid-level within the organization, preparing complex tax forms and schedules; supervisory authority over other preparers/accountants. Specific knowledge and understanding of withholding tax obligations in various states for employees and tax obligations for independent contractors.

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.

IRS Approved Provider

Strafford is an IRS-approved continuing education provider offering certified courses for Enrolled Agents (EA) and Tax Return Preparers (RTRP).