The State Tax Policy Function: Whether it's part of the tax department or part of government affairs, one thing is for sure - it's getting more complicated every day.

• Position: Discussion

These days state tax policy occupies a greater percentage of the professional lives of many TEI members for a variety of reasons. We wanted to dive deep into this phenomenon, so we convened a roundtable of seasoned practitioners in the field, including Ellen Berenholz, executive director of tax policy at Comcast Corporation; Deborah Bierbaum, assistant vice president for tax, external tax policy, at AT&T Services Inc.; and Jamie Fenwick, vice president of strategic tax at Charter Communications. Michael Levin-Epstein, senior editor, moderated the discussion.

Michael Levin-Epstein: What are the different ways to handle the state tax policy function?

Jamie Fenwick: Broadly, you could put the tax policy function within the tax department, which is what my company does. The alternative version that I've seen in other companies that also seems to work--it just depends on the specific circumstances--is to have the tax policy function within the government affairs group. I think both work equally well.

Deborah Bierbaum: I would echo that; I think there are pluses and minuses of having it in either tax or external affairs, depending on the resources available. Even if it is located in tax, you could have it as a separate freestanding function, or where the people engaged are primarily involved in other functions in tax.

Ellen Berenholz: I would elaborate a little more that you could structure the federal policy and state policy as separate functions, both within tax and within government affairs.

Levin-Epstein: What do you think are the advantages and disadvantages to combining federal and state together versus keeping them separate, whether they're in government affairs or in the tax department?

Berenholz: I would say that keeping them together, the advantage is that one person has a broad overview of all the issues, because the federal and the state and the local and the international are often interrelated. One decision can impact another, so it's nice to have a single point person on that team who would have visibility to all of those functions or sub-functions.

Bierbaum: Certainly, when you have a separate function, as we do at AT&T, devoted to this, having all of us work together on the various tax issues is a plus, as many issues overlap. We benefit from the learning together, and what happens at the federal level often flows through to the state level, and it keeps consistency in the work. However, I have seen it where tax policy is not a separate function, and it might be somebody's part-time job. In that case, there may be advantages to have the state and federal person be different because of their other responsibilities.

Fenwick: I think that's right.

Berenholz: On the same kind of topic, and this may be talked about in a later question, but the advantage of having the policy function within the tax group is that that person would be closer to the people actually doing the compliance or the audits or the controversy as opposed to the government affairs group, where the person in policy there is likely closer to the policymakers. Those would be considerations to balance when structuring which function would house the tax policy department.

Collaboration

Levin-Epstein: Can you think of examples in which that kind of collaboration has worked at your company?

Fenwick: Before we get into specific examples...