26
BizVoice/Indiana Chamber – May/June 2016
During the 2016 Legislature, Sen. Brandt Hershman (chair of the
Tax and Fiscal Policy Committee) made a push to switch the state to a
combined reporting tax method. This would impact companies here
with operations outside of the state.
Combined reporting tasks these businesses with adding together
all profits for one report. Indiana’s current system of separate accounting
allows for each subsidiary to report independently where it’s located.
Hershman believed something needed to be done to address
issues related to how national and multi-national companies report
their income among and between affiliated companies. He saw the
results of recent Tax Court cases as undermining the corporate income
tax base and viewed the practice of some companies as nothing more
than tax evasion and unfair to other taxpayers.
The Indiana Chamber, however, didn’t see the need for this
switch, with the organization’s vice president of taxation, Bill Waltz,
going as far as saying “it could be quite detrimental.” A number of
Indiana Chamber members and like-minded groups were able to
persuade Hershman to opt for a summer study later this year on the
matter, but “clearly we haven’t seen the last of it,” Waltz notes.
Zimmer Biomet in Warsaw will be one company providing input
TAXING TIMES
By Rebecca Patrick
“We’re looking for every opportunity to serve our customers
better – to be more efficient and accommodating, to meet them where
they are and how they want to interact with us,” declares Indiana
Department of Revenue (DOR) Commissioner Andrew Kossack.
The vehicle to help
achieve that is an integrated
tax system study. Deloitte
Consulting is currently directing
it and will then provide
recommendations for
improvement in both technology
and business processes.
Integrating stand-alone
systems into “a more
streamlined and consolidated
approach” likely is one of the
results. Completing overdue
updates is another. “We have
some systems that are about
20 years old; they have
performed well over the years
but are badly in need of
modernizing,” Kossack notes.
While there are a number
of options DOR is considering,
he says, the agency doesn’t
yet know what steps Deloitte
will ultimately recommend or
the method to execute them.
“Certainly we want to be as user-friendly as possible, so things
like portals that taxpayers could use to access their account more
readily, perhaps conduct basic transactions via the web rather than
having to come into one of our district offices or do something over
the phone,” Kossack suggests.
“Those are the things we want to make sure are implemented
securely and operate efficiently. We don’t just want to jump into a
change like that. (But) those are things people expect in this modern
age and we want to be able to accomplish that.”
DOR also is striving to be “more proactive when it comes to
compliance matters to the extent taxpayers might like certain
reminders of filing deadlines and those kinds of things,” he explains.
“We want to help taxpayers comply and partner with them to do that,
and not be just the enforcement agency.”
This effort is the last of the items to be carried out per a 2012
Deloitte analysis in the wake of DOR accounting issues. The research
is expected to be done by Labor Day and will be presented to the
Legislature at the end of the year. From there, DOR will work with
the General Assembly to determine how to accomplish the roadmap
provided by Deloitte and what funding may be necessary.
Kossack anticipates the full modernization will occur over several
years, possibly up to five. But a number of changes “will become visible”
to taxpayers in the meantime as the agency migrates to the new system.
Modernization on Horizon
at Department of Revenue
Upcoming Combined
Reporting Study a Hot Topic
“We want to help taxpayers
comply and partner with them
to do that, and not be just the
enforcement agency.”
– Andrew Kossack
RESOURCE:
Andrew Kossack, Indiana Department of Revenue, at
www.in.gov/dor
WEB EXCLUSIVE
Renewed Push for Online Sales Tax Collection?
Online purchases now make up close to 10% of all retail sales and
that percentage is steadily climbing. This is a growing fiscal
challenge across the country, but especially for states like Indiana
that are heavily dependent on the sales tax – which accounts for
46% of Indiana’s total tax revenues.
States are losing an estimated $11 billion in uncollected sales tax
each year. Indiana’s losses are put at $200 million annually, with
these numbers increasing by nearly 10% each year.
Indiana Chamber Vice President of Taxation Bill Waltz revisits the history
and explores a possible congressional revival of the Marketplace
Fairness Act. Read the full story at
www.bizvoicemagazine.com.Indiana Vision 2025
: Attractive Business Climate