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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