The majority of CFOs see state taxes increasing for their companies and believe that state and local tax compliance has become more demanding than federal tax compliance, according to a new survey by Grant Thornton.
Forty percent of the 496 CFOs and senior controllers polled by the firm said that state and local tax compliance is more demanding than federal tax compliance. An additional 32 percent of CFOs said SALT compliance was about as demanding as federal tax compliance.
In terms of compliance, state taxation may be perceived as more complex because of the myriad of differences among the states and the sheer number of filings each requires, said Brian Murphy, managing partner of Grant Thorntons state and local tax practice.
CFOs located in large states that have recently enacted tax changes were particularly insistent that the state tax compliance burden is at least as significant, and in many cases, more demanding than federal tax compliance. For example, 64 percent of Michigan CFOs said that state tax compliance is more demanding than federal tax compliance.
Nearly two-thirds of the respondents expect their aggregate state effective tax rates to increase in the coming year, while a mere 1 percent believe those rates will decrease. A whopping 78 percent of respondents from New York believe their companies effective tax rates will rise.
