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Multistate Tax  |  May 27, 2022
State Tax Matters
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Income/Franchise:
South Carolina: Draft Ruling Addresses Pass-through Entity Tax and Credit for Taxes Paid to Other States

SC Revenue Ruling #22- DRAFT, S.C. Dept. of Rev. (5/19/22). The South Carolina Department of Revenue released a draft revenue ruling involving state law that provides an annual election for some qualifying pass-through entities to pay South Carolina income tax on active trade or business income at the entity level [see previously issued Multistate Tax Alert for more details on South Carolina’s new elective pass-through entity tax], specifically addressing South Carolina’s credit for resident individuals for income taxes paid to other states on personal service income provided in South Carolina Code section 12-6-3400 and the taxation of other business income when a pass-through entity is operating in more than one state. The draft revenue ruling discusses some example scenarios when an entity level tax election is or is not made in South Carolina and whether a South Carolina credit for taxes paid to other states is or is not applicable, including:

  • Credits for resident partners or shareholders for the entity level tax paid directly by a pass-through entity on its return of another state for personal service income taxed in the other state, and
  • Credits for resident partners or shareholders for entity level tax paid directly by a pass-through entity on its return of another state for the entity’s non-personal service business income.

Comments on the draft revenue ruling are due on June 1, 2022. Please contact us with any questions.

 

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In this issue

Income/Franchise
Arizona: New Law Revises Aspects of Entity-Level Taxation for Some PTEs

Louisiana DOR Explains Impact of Federal and State Tax Law Changes Involving NOLs

New Hampshire: Proposed BPT Rules Reflect Law Changes, Including Single Sales Factor Apportionment

New Jersey Division of Taxation Explains Income Excluded from CBT Return Under Tax Treaty

New York City: Some Relief for Certain S Corps Making NYS PTET Election Retroactively Subject to NYS PTET Addback

South Carolina: Draft Ruling Addresses PTE Tax and Credit for Taxes Paid to Other States

Credits/Incentives
Wisconsin: FAQs Issued on State Benefits of Investments in Federal Qualified Opportunity Zones

Sales/Use/Indirect
Colorado: Draft Proposed Rules on Retail Delivery Fee to be Discussed at Stakeholder Meeting

Louisiana: Proposed Rule Addresses Sales and Use Tax Commission for Remote Sellers’ VDA Program

Massachusetts DOR Issues Release on Right to Apportion Tax Based on Where Software is Used

Mississippi DOR Rescinds Proposed Rule Changes Involving Cloud Computing

South Dakota Administrative Guidance Addresses Taxation of Products Transferred Electronically

Miscellaneous
Oregon: Taxpayer Asks US Supreme Court Whether E911 Tax Imposition is Unconstitutional

Multistate Tax Alerts



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