Unitary Reporting

Joining about half of the other states in the country, starting in January 2009, Massachusetts will require unitary or combined reporting for its income tax. With unitary reporting, members of an affiliated group of corporations (and/or partnerships) that meet the unitary requirements are required to file returns as though they are one business for tax purposes. Common ownership, economies of scale, functional integration and the flow of value between the entities are normally reviewed to determine which entities are considered one unitary group.

Apportionment

Joining Georgia, Minnesota, Illinois, Maryland, Michigan, Iowa, Wisconsin, Ohio and Maine, starting in 2009, Utah will become a benefit state for apportioning service revenue for income or gross receipts tax purposes. Being a benefit state means that receipts from services performed in one state for a customer in a benefit state will be deemed earned in the benefit state for income tax reporting purposes. This could result in double taxation of the income from such receipts, if the service is performed in a state that treats such receipts as being earned in that state.

Amnesty

Remember, Nevada's tax Amnesty started on July 1, 2008, and will run to September 30, 2008.

For Further Information

If you would like more information about this Alert, please contact Stanley R. Kaminski, any other member of the State and Local Tax Practice Group, or the lawyer in the firm with whom you are regularly in contact.

As required by United States Treasury Regulations, you should be aware that this communication is not intended by the sender to be used, and it cannot be used, for the purpose of avoiding penalties under United States federal tax laws.

Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.