TABLE OF CONTENTS State and local tax planning has increased in importance in recent years, as Federal tax planning opportunities have declined and new taxes have been levied at the state and local level. For many companies, state and local tax planning consumes a considerable amount of their in-house tax staff time, and such taxes account for a significant amount of their tax burdens. For example, in a survey by one of the Big 4 accounting firms, state and local tax planning was found to consume 48% of the surveyed companies' overall in-house tax staff time, and accounted for 46% of the companies' overall tax burdens. [1] Each of the Big 4 accounting firms, and most large CPA and law firms, maintain a dedicated state and local tax group, with the sole goal to advise entrepreneurs and managers on how to address state and local tax challenges (as well as taking advantage of opportunities for state and local tax benefits) to enhance the bottom line and cash flow.
The force driving the need to understand (and use) state and local tax knowledge is largely a function of the dynamism some would say chaos that is driving state and local public finances in the information age. State and local taxes have become increasingly important over the past few years due to enhanced social needs for education, safety, and health care. Their importance also...
