State and local tax resources from the AICPA.

• Author: Rood, Deborah K.

When the Federal government enacts new tax legislation, state and local governments must find ways to react to it (and, in the case of the Federal government's recent tax-reduction acts, to maintain revenue). They can adopt and/or decouple from Federal statutes, adjust tax rates, alter the timing of tax receipts and modify the number of taxpayers and/or transactions subject to tax in that jurisdiction (i.e., the tax base). Tax advisers for individuals or entities that file income tax returns in a number of state or local jurisdictions are probably aware of the increasing amount of correspondence their clients receive from state and local governments. How is a privately owned business or small practitioner supposed to keep track of all the changes?

The website maintained by the AICPA's State and Local Tax Technical Resource Panel (TRP) was designed for just that reason. Its resources can help tax professionals deal with state and local tax issues and comply with state and local tax obligations. The available products are summarized below.

* State Corporation Income Tax Return Checklist. This is a single checklist containing inquiries to be considered when preparing many state and local corporation income tax returns. It includes prompts as to where the corporation should file returns, which income and expense items may be treated differently in various jurisdictions, what should be considered in a jurisdiction's tax computation, etc. The checklist also encourages tax advisers to consider other issues, such as business/non-business treatment, apportionment and allocation factors, net operating losses (NOLs) and supporting documentation.

* State Individual Income Tax Return Checklist. Similar to the state corporation checklist, this is a single checklist that prompts tax advisers to consider, for example, the jurisdictions in which an individual should file a return, state and local conformity with Federal laws, income and expense items that may be treated differently in various jurisdictions, certain S corporation shareholder and partner concerns and tax computation and credit issues.

* State Passthrough Entity Checklist (coming soon). New for 2006 is a passthrough entity checklist that addresses issues such as state conformity to Federal provisions, composite return options, withholding requirements, nonresident income tax agreement options and entity-level taxes.

* Unique Considerations for State Business Tax Returns. This guide provides a...