Thomson Reuters reports on state taxes on e-commerce

Thomson Reuters released a report Tuesday examining how states are imposing corporate income taxes on out-of-state e-commerce sites.

The report comes amid speculation over a high-profile case that the Supreme Court is expected to decide by June that could change the way states collect taxes from e-commerce merchants, potentially overturning the landmark Quill decision from 1992 that imposed a physical presence test on state sales taxes.

Thomson Reuters’ Checkpoint Catalyst editorial team sent a detailed survey to state tax authorities asking for information about how they approach various e-commerce technologies, including cloud computing, digital products, and others. The second annual Checkpoint Catalyst special report, State Corporate Income Tax: E-Commerce Study 2018, examined whether a state can levy taxes on a seller whose only contact with the state is engaging in purely digital transactions and, if so, how the state obtains the receipts.

“This year’s results continue to reflect a broad range of state responses to questions involving corporate income tax nexus and apportionment for pure e-commerce,” said Salim Sunderji, managing director, Checkpoint, with the Thomson Reuters Tax & Accounting business, in a statement Tuesday. “Tax and accounting professionals whose clients engage in these types of transactions will benefit from the high-level overview.”

Thomson Reuters released a separate Checkpoint special report Monday on the impact of the Tax Cuts and Jobs Act on disclosures of public companies’ financial reporting and disclosure obligations. The report, Effects of the Tax Cuts and Jobs Act on Public Company Disclosures, discusses recent SEC staff guidance, including the accounting obligations of SEC registrants when conducting an assessment for some of the tax effects of the TCJA and the disclosures that registrants are expected to offer about the material financial reporting impacts of the new tax law for which the accounting is incomplete.

For another report released this week, Thomson Reuters commissioned Celent to conduct independent market research on integrated governance, risk and compliance. The findings appear in the report, Achieving Integrated GRC in an Interconnected Digital Age, which examines technologies such as big data, artificial intelligence, machine learning and blockchain. The report indicates risk operations continue to be held back by inflexible technology.

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