Grant Thornton anticipates state budgets will remain under pressure this year even if the economy improves.
The accounting firm has identified 10 state and local tax issues that it believes will be considered by state legislative bodies in 2010 as they attempt to balance their budgets. The trends include:
1. Further state budgetary pain, even if the economy improves;
2. Significant changes to corporate tax systems, particularly in large states;
3. Continuing adoption of amnesty programs;
4. The current version of the model for many states apportionment regimes, the Uniform Division for Income Tax Purposes Act, will not be going away despite recent efforts to revise it substantially;
5. Lengthened legislative sessions that deal with revenue shortfalls;
6. More states decoupling from federal tax legislation;
7. Amazon legislation sweeps forward as the physical-presence rule is side-stepped;
8. A push to live up to jobs agreements when states and localities offer tax credits and incentives to businesses;
9. Property tax issues loom as values continue to decline; and,
10. The U.S. Supreme Court will grant certiorari on a case relevant to state and local taxation.
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