Tuesday & Wednesday, January 28‐29, 2020 Hya� Regency Columbus, Columbus, Ohio Workshop J Navigating the Post-Wayfair Environment 18 Months Later… Enacted Legislation in States, Economic Nexus, Marketplace Facilitator Process & Income Tax Application Tuesday, January 28, 2020 3:00 p.m. to 4:00 p.m.
Biographical Information Aimee M. DeLuca, Vice President, Taxes, The Scotts Miracle-Gro Company 14111 Scottslawn Rd., Marysville, Ohio 43041 Phone: (937) 578-5621 Email: aimee.deluca@scotts.com Aimee is a diverse tax professional with more than twenty years of experience in corporate taxation. She originally joined The Scotts Miracle-Gro Company (NYSE:SMG) in 1997 after six years in public accounting with EY. Aimee also held tax leadership positions with AT&T Wireless Services, Inc. (Seattle, WA) and Hillenbrand Industries (Batesville, IN) from 2000 through 2004. Returning to the Columbus area, she rejoined SMG in 2004 and currently leads their corporate tax function with key responsibilities in the areas of global income tax and domestic transaction tax planning and compliance, strategic planning and M&A, tax accounting and financial reporting, tax audit management, and negotiation of tax credits and incentives. Aimee is also an officer and board member of several SMG foreign and domestic affiliates. Aimee is a Past President and Chapter Representative of the Tax Executives Institute’s Cincinnati-Columbus Chapter and is an active tax committee member of the Ohio Manufacturers’ Association and the Ohio Chamber of Commerce. Aimee is a graduate of Bowling Green State University with a BSBA, Accounting, and received a Pace Setter Award in conjunction with earning her MBA from The Ohio State University Fisher College of Business in 2008. Aimee was licensed as a CPA in Ohio in 1992. She and her husband Ron currently reside downtown in German Village. William G. (“Bill”) Nolan, Managing Director, Indirect Taxes, National Tax Department, Ernst & Young LLP, 50 South Main St., Suite 1200, Akron, OH 44308 330-255-5204 Fax: 866-301-0244 william.nolan@ey.com Bill is part of EY’s State Desk network and assists clients and EY engagement teams with state tax matters in several states including Kentucky, Iowa, Montana, Nebraska, North Dakota, Ohio and Wisconsin. Bill also serves a variety of clients in Northeast Ohio ranging from multinational corporations to closely-held private companies. He provides multistate assistance in various areas including nexus reviews, apportionment reviews and taxability studies (sales/use tax). He has also represented clients in numerous audits and appeals in many states. Bill frequently speaks on state and local tax matters at national and local conferences, including the Georgetown State and Local Tax Institute, Council of State Taxation Advanced Income Tax School, Cleveland Tax Institute and the Ohio Tax Conference. He has had articles published in the Journal of Multistate Taxation and the ABA Tax Lawyer. Bill received his BBA (Accounting) at Cleveland State University in 1993 and is a Certified Public Accountant. Bill received his JD from Case Western Reserve University School of Law and was admitted to the Ohio Bar in 1996. Bill is a member of the tax committees of the Ohio State Bar Association, Kentucky Society for CPAs, and the Wisconsin Society for CPAs. He is also a trustee for the Greater Akron Musical Association.
Biographical Information Christopher A. Futscher, Senior Manager, Indirect Tax, Ernst & Young, LLP (“EY”) 221 E. 4th St. Ste. 2900, Cincinnati, OH 45202-4095 513.612.1481 Mobile: 513.503.4521 chris.futscher@ey.com Chris joined Ernst & Young, LLP (“EY”) in the spring of 2011 as an experienced SALT Senior. Prior to joining the firm, Chris worked as a tax attorney at The Northwestern Mutual Life Insurance Company. While there, Chris focused his practice to state and local taxation and Federal Transaction Advisory Services. Currently, Chris leads EY’s Sales and Use Tax and Excise Tax practices in the EY’s Ohio, Kentucky, and Pennsylvania market. His clients include several Fortune 100 companies, Global manufacturers, and rising midmarket clients in within the region. He has secured multiple eight figure refunds for clients and successfully resolved countless tax audits at the administrative level. Chris is a frequent speaker at regional tax conferences. He has served on the board of trustees for the Cincinnati Shakespeare Company since 2012. Education and Affiliations • B.A., Wabash College, 2002. • J.D., University of Cincinnati, 2006 • LL.M., Boston University, 2008 • Ohio Bar Admission, 2006, Wisconsin 2007 • Cincinnati Bar Association Steven B. Russell, Tax Program Administrator, Business Tax Division Ohio Department of Taxation, 4485 Northland Ridge Blvd., Columbus, OH 43229 614.466.9635 Fax: 206.339.9305 steven.russell@tax.state.oh.us Steven (Steve) Russell began his career at the Ohio Department of Taxation over 25 years ago. For the last 22 years, he has specialized in sales and use tax auditing and/or administration which includes experience with manufacturers, construction contractors, and retailers. Prior to becoming administrator of the Business Tax Division in August 2019, Steve was assistant administrator in the Business Tax Division for four years and spent six years as assistant administrator of the Audit Division where he was responsible for forming Audit Division practices and providing technical guidance. As assistant administrator and now administrator of the Business Tax Division, he helps oversee Ohio’s business taxes and provides technical guidance in the sales and use tax area. Steve was also previously a part of the Audit Division’s Review and Support Group where he helped administer the direct pay authority program. He has presented several times at the Ohio tax conference, Cherry Valley tax course, and to numerous other groups and organizations such as the Ohio Society of CPAs, Ohio Chapter of the National Association of Tax Professionals, and Ohio State Society of Enrolled Agents. Steve received his B.S. in accounting from Otterbein College, Westerville, Ohio.
Wayfair – one year later Ohio Business Tax Conference Workshop J 28 January 2020
Today’s presenters Aimee DeLuca Chris Futscher Vice-President Taxes Senior Manager – Indirect Taxes The Scotts Miracle-Gro Company Ernst & Young LLP - Cincinnati aimee.deluca@scotts.com chris.futscher@ey.com Steve Russell Bill Nolan Tax Program Administrator Managing Director - Indirect Taxes Business Tax Division Ernst & Young LLP – National Tax Ohio Department of Taxation william.nolan@ey.com steven.Russell@tax.state.oh.us Page 2
Today’s agenda ► Wayfair – the new landscape ► State responses to Wayfair – remote sellers ► State responses to Wayfair – marketplace facilitators/providers ► Key actions ► Post- Wayfair considerations outside sales and use taxes Page 4
Polling question #1 Very little time – it doesn’t impact us A. How much time have you or A significant amount of time – the decision has B. your tax department spent had a significant impact on our operations dealing with the impact of Not sure C. the Wayfair decision? Does not apply D. Page 5
Wayfair - the new landscape Page 6 Page 6
South Dakota v. Wayfair : the fallout ► The Wayfair decision eliminated the need for a remote seller to have physical presence in order for the state to compel registration/collection ► Physical presence still creates nexus ► Other state efforts to “work around” Quill remain in place (e.g., click-through, affiliate, and notice/reporting provisions) ► The new standard (economic nexus) allows states to require remote sellers to register and collect based on economic presence, measured by sales and/or transaction volume ► Most states require registration and collection if sales made into the state exceed $100,000 per year or occur in 200 or more transactions ► Nearly all states have adopted some form of economic nexus and approximately 40 states have extended the requirement to marketplace providers/facilitators ► States are also looking to adopt factor-presence nexus standards for income and other business taxes Page 7
State responses to Wayfair - remote sellers Page 8 Page 8
State responses: enforcement of sales tax economic nexus provisions Pre-July 2018 November/ April 2019 October 2019 December 2018 July/September January 2019 June 2019 Provision considered 2018 October 2018 February 2019 July 2019 No sales and use tax WA ME July MT ND CT VT Dec. OR MN JulyNH ID WI NY MA SD NJ MI WY Oct. RI IA PA NV NE NJ RI OH MD* IN Nov. IL DE UT CA WV CO VA KS MO DE KY NC Nov TN OK SC DC AZ NM AR Nov MS GA AL Sept. TX** LA AK HI ** Will not be enforced until October 2019 FL July Proposal failed to pass or was vetoed Source: Ernst & Young LLP analysis of state laws as of September 2019. Page 9
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