TEI Roundtable No. 24: Putting SALT on the Table; Corporate tax professionals face a plethora of vexing state and local issues.

PositionTax Executives Institute, state and local taxation - Discussion

Digitization, human capital, greater efficiency, tax reform, Wayfair. To corporate tax professionals plying their trade in the state and local space, these aren't just buzzwords. They're challenges and opportunities that dominate their daily activities. So, what keeps these SALT professionals up at night? To address these issues, we convened a roundtable of experts in the field, including Marji Gordon-Brown, vice president and associate tax counsel for MacAndrews & Forbes Incorporated; Cooper Monroe, director of tax for Duke Energy Corporation; and Michell Rodriguez, director of corporate income tax for Costco Wholesale Corporation. Michael Levin-Epstein, senior editor of Tax Executive, moderated the discussion.

Michael Levin-Epstein: What are the major issues facing corporate tax professionals today in the state and local tax arena?

Marji Gordon-Brown: There are so many. I'm going to take a little bit of a different slant. I'm not going to talk about technical issues, because I figure my esteemed colleagues may tap into that. I'm going to suggest that some of the biggest issues that we're having--not necessarily that we're having, that people are having--have to do with technology and systems. The systems, I think, that people are using often are antiquated. They were built in a time that extreme diversity in information wasn't necessary. I think because of that, and through acquisitions, company systems don't do what they really need them to do, and they don't talk to one another. Therefore tax people--state and local tax people--are forced to use systems that really don't answer the questions that need to be answered. We're using a square peg and trying to put it into a round hole. An offshoot of that is budget issues. With all the money in the world, technology challenges could be solved, but it's a very expensive dilemma--endeavor--to change all of that. The third thing, and then I'll pass it along, is I think we have an issue with human capital. I think that the number of the people in tax, the number of people who are staying in tax, young people getting into tax--I think that's declining. I think we have a resource issue, an internal resource issue. We just don't have the right amount of people, and maybe that's a budget issue, too. But I'm concerned that the number of people that are just in tax in general and, specifically focusing on state and local, is declining. Specialization in state and local tax maybe is not happening the way it used to.

Cooper Monroe: I agree with that. I agree with everything you just said about the rapid digitization and driving for efficiency. We see it at our company. I think in the state and local tax area, especially in the indirect areas like sales and use tax and property tax, there's an especially large opportunity to bring technological processes to bear on those kinds of systems. I agree with you about the talent--building capabilities of people around changing technology and increasing efficiency. The trend is to build skills around data analytics and replacing manual gathering of data. That's a macro issue. The other thing that I would add to what you had in your list, Marji, is just the rapid pace of change. It seems like from a regulatory and legislative perspective, the pace of change seems unprecedented. The last five years the pace of change has been particularly acute.

Michell Rodriguez: I would echo what Marji and Cooper said. I agree that we have all of these challenges going on, and maybe it's the way that technology and tax is evolving, and then you sort of layer on, "OK, we have tax reform, which means every state is doing or not doing something completely different," so we're having to continuously learn all the time. Then, with Wayfair, and that...

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