State corporate income tax update: What's happened during the 2015 legislative sessions?

Inside Deloitte

This edition of Inside Deloitte provides an overview of select state corporate income tax legislative changes that have been enacted thus far during the 2015 state legislative sessions, as well as some related taxpayer considerations.

A busy year for state tax legislative activity

On November 4, 2014 voters in 36 states chose governors, resulting in 11 new chief executives and six changes in party affiliation. These changes helped place state tax policy front and center during the 2015 state legislative season. A theme in many of the governors’ State of the State addresses was a call for tax relief and a reduced tax burden as a means for growing the states’ economies.1 However, these proposed reductions were often pitted against the stark reality that while the national economic recovery has seemingly been underway for six years, some states still faced budget shortfalls for fiscal 2016 and, accordingly, had to consider tax increases to meet state budget demands.Other states experiencing modest revenue growth had to remain cautious in light of growing budgetary pressure to fund areas such as education, transportation, and infrastructure. To this end, some governors supported raising some taxes and fees—either as stand-alone increases or in connection with other tax reductions.3

For example, in the continued effort to combat the tax impact on states of perceived international income shifting, about a dozen states—some with the strong support of their governors—considered legislation addressing the income and apportionment factors of some related corporations incorporated or doing business in purported foreign ‘‘tax haven’’ jurisdictions.4 Several states joined the bandwagon of jurisdictions offering tax amnesty programs in an effort to meet short-term revenue-raising goals—arguably a policy measure favored by states and taxpayers alike.5

These activities translated into a busy year for state tax legislative activity and numerous proposed bills addressing a wide range of state corporate income tax issues—including nexus, tax base, allocable versus apportionable income, apportionment, filing methods/unitary combination, tax rates, and tax administration—some of which were enacted into law, while others were tabled for possible reconsideration next year. With most state legislative sessions having come to a close for 2015, this article highlights, jurisdiction by jurisdiction, some of the corporate income tax legislative changes that have been enacted thus far during the 2015 legislative season.6

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If you have questions regarding this edition of Inside Deloitte, please contact any of the following Deloitte Tax professionals:


Shona Ponda, senior manager, Washington National Tax-Multistate, +1 212 436 7819


James N. McNiff, manager, Multistate Tax Services, +1 703 251 1147


Kathleen Rudis, senior, Multistate Tax Services, +1 703 885 6442


Namrata Jhawer, staff, Multistate Tax Services, +1 678 299 3689


Dashrath Phulwary, staff, Multistate Tax Services, +1 678 299 3695


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