STATE & LOCAL TAXATION

Beyond federal obligations, state and local taxes significantly impact financial planning. These topics
address the multi-jurisdictional tax landscape.

TOPIC 54
State Income Tax Overview: Rates, Structures & No-Tax States
State income taxes vary dramatically — from zero in nine states to over 13% at the top marginal rate — and their
structure, conformity to federal law, and available deductions differ significantly. This topic provides an overview of
state income tax systems to help individuals and businesses understand their state obligations and plan
accordingly.

States with no income tax and their tradeoffs
Flat tax vs. progressive state income tax structures
Common state starting points: federal AGI conformity
State-specific deductions and credits
Reciprocity agreements between states
State filing deadlines and extensions
Impact of state income tax on overall tax burden comparison

TOPIC 55
Multi-State Tax Filing & Residency Rules
Taxpayers who live or work in multiple states face complex filing obligations, potential double taxation, and
residency disputes that can lead to costly audits. This topic explains how states define residency and sourcing
rules, how to claim credits for taxes paid to other states, and the growing complexity for remote workers.

Domicile vs. statutory residency: key differences
Part-year resident vs. nonresident returns
Sourcing income to the correct state
Avoiding double taxation: credits for taxes paid to other states
Remote workers and their multi-state exposure
183-day rule and domicile change strategies
State audit risk for multi-state filers

TOPIC 56
Sales & Use Tax: Nexus, Rates & Consumer Obligations
Sales and use tax is one of the most complex areas of state taxation, with over 10,000 taxing jurisdictions and rules
that vary by product, service, and location. This topic explains the nexus rules triggered by the Wayfair Supreme
Court decision and the collection and remittance obligations for businesses selling across state lines.

Sales tax vs. use tax: the distinction
Economic nexus post-South Dakota v. Wayfair
Origin-based vs. destination-based sourcing
Taxable vs. exempt goods and services by state
Collecting and remitting sales tax as a business
Consumer use tax obligations on online purchases
Sales tax on digital goods and software

TOPIC 57
Property Tax: Assessment, Appeals & Exemptions
Property taxes are a significant and often overlooked annual expense that can be reduced through exemptions and
formal assessment appeals. This topic explains how property taxes are calculated, the exemptions available to
homeowners and nonprofits, and the process for challenging an assessment.

How property tax is calculated: assessed value and mill rates
Assessment ratio and full market value
Common property tax exemptions: homestead, senior, veteran, religious
How to appeal a property tax assessment
Property tax deduction under SALT cap
Property tax in retirement planning
Church and nonprofit property tax exemptions

TOPIC 58
SALT Deduction Cap: Impact & Workarounds
The $10,000 cap on state and local tax deductions imposed by the 2017 Tax Cuts and Jobs Act significantly
increased the federal tax burden for taxpayers in high-tax states. This topic explains who is most affected, the
pass-through entity tax workaround adopted by most states, and the current legislative landscape.

The $10,000 SALT cap enacted by TCJA 2017
Who is most affected by the SALT cap
Pass-through entity (PTE) tax as a workaround
PTE election rules by state
Prepaying state taxes before year-end: IRS ruling
Legislative efforts to repeal or raise the SALT cap
SALT cap impact on the itemizing decision

TOPIC 59
Business Nexus & State Tax Obligations for Small Businesses
Small businesses that sell across state lines or employ remote workers may unknowingly create tax nexus in
multiple states, triggering registration, filing, and tax payment obligations. This topic explains physical and
economic nexus rules, apportionment methods, and how to use voluntary disclosure to resolve prior-year
exposure.

Physical nexus: offices, employees, inventory
Economic nexus thresholds by state
Franchise taxes vs. income taxes for businesses
State registration, licenses, and annual report requirements
Payroll tax withholding for multi-state employees
Apportionment formulas for multi-state business income
Voluntary disclosure agreements (VDAs) for past nexus exposure

TOPIC 60
State Tax Credits & Incentives for Individuals & Businesses
States offer a wide array of tax credits and incentives that can significantly reduce state tax liability for individuals,
investors, and businesses. This topic surveys the major categories of state tax credits and explains how to identify
and claim the incentives applicable in a given state.

Types of state tax credits: refundable vs. non-refundable
Earned income credits at the state level
Historic rehabilitation tax credits
Low-income housing tax credits (LIHTC)
Research and development credits by state
Enterprise zone and opportunity zone incentives
Renewable energy and electric vehicle credits by state

TOPIC 61
Local Business Taxes, Licenses & Gross Receipts Taxes
Local governments impose a variety of taxes and license fees on businesses that operate within their jurisdictions,
including gross receipts taxes, occupational privilege taxes, and city earnings taxes that many business owners
overlook. This topic maps the landscape of local business tax obligations and the compliance calendar required to
stay current.