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On Saturday I attended the annual “NJ Famous State Tax Seminar” presented by the New Jersey Chapter of the National Association of Tax Professionals, held, as it is each year, at the Woodbridge Hilton in Iselin.
This year the seminar was devoted entirely to state tax issues. In addition to New Jersey state taxes, we were to hear from representatives of neighboring states New York, Pennsylvania, and Delaware. A great idea, and a great line-up, evidenced by the fact that it had the best attendance for a NJ state tax seminar in years, despite the predicted snowfall. The only point in the day when my attention began to drift was during the Delaware presentation, as I currently do not prepare any Delaware state income tax returns.
We were greeted by newly-elected chapter President Jaimee Hammer, who led us in a well-deserved round of applause to thank outgoing President Marilyn Ayers for her great job.
First up was the “keynote” speaker – which has historically been the current Director of the New Jersey Division of Taxation (except last year when the then Acting Director refused to attend). This year we were introduced to the new, currently “Acting” (until officially approved by the legislature), Director – Michael Bryan.
My first reaction was – Gott in Himmel, he is young! He certainly looked young, although based on his resume he is probably in his late 40s.
Mr. Bryan is, surprisingly and thankfully, a true outsider – coming from a corporate audit background. He brings a fresh and unique perspective to the job – approaching it as, as he described, a “frustrated taxpayer”.
In his short time on the job he has already done some good things. He has created an Advisory Board of professionals (former NJNATP President Marilyn Ayers represents the tax practitioner community on the Board) and a NJ Taxpayer Advocate office, which will begin operating on February 1st. He has also decided to publish on the Division’s website previously private “Letter Rulings” as guidance for taxpayers and tax professionals.
A participant told the Director about receiving a notice from NJDOT for a tax (and accumulated penalty) due from the late 1980s. Mr. Bryan told us he was aware of this problem and that it was totally ridiculous. He plans to in the very near future establish a reasonable date and “write off” alleged outstanding balances from before this date.
He also indicated that the Conference and Appeals division is dragging its feet and has too large a backlog of cases. He is instructing this division to clear the backlog by resolving open issues as quickly as possible.
And he has hired 137 new auditors, and, apparently something not done before, these auditors have been properly trained.
For the first time in many, many years I have great hope for the future of the mucking fess that is the New Jersey Division of Taxation.
The Acting Director was followed by presentations on PA taxes by Enrolled Agents and PA-NATP leaders Amy Gambler and Kathryn Bowman, DE taxes by James Stewart, Assistant Director of the Delaware Division of Revenue Office of Personal Taxes, and NY taxes by the Kathryn Keane, former NATP Board member.
The deadline for filing the PA-40 state income tax return will follow the federal return and be extended to April 18, 2011, although the 1st Quarter PA estimated tax payment will be due April 15th. The PA presentation included a great hand-out – “Common Federal and State Tax Differences”.
Delaware has decided to join its neighbors and not send out state income tax booklets to its taxpayers. DE taxpayers who choose to pay their state tax due via credit card will not be charged a processing fee if the payment is less than $2,500.
If you elect to deduct state and local sales tax instead of state and local income tax on your 2010 federal Schedule A, this deduction must be added back, like state and local income taxes, when determining New York State itemized deductions on the NY resident and non-resident state income tax returns (IT-201 and IT-203). State and local sales tax is not deductible in calculating NY state income tax. Beginning for tax year 2012 New York will institute 1099 filing requirements.
Before breaking for lunch the state tax speakers, including the NJDOT representatives, participated in a Q+A panel discussion. This started out slow, and I did not think it would fill the allotted time, but it quickly picked up steam and became quite lively.
The entire afternoon was given over to the main reason most of us attend this annual event – the Jim and Jake Show. Popular, excellent, and well-informed speakers Jim Gordon and Jacob Foy from the NJ Division of Taxation have been presenting NJ state tax updates each year at this seminar for quite a while now. Their obvious ability and competence is truly unique among employees of the Division of Taxation. Hopefully this will change under the leadership of its new Director.
Jim Gordon began his portion of the J+J Show by stating that he, too, as an employee of the NJDOT, has great hope for the future of the Division under Director Bryan.
Jim covered corporate and business issues. The 4% “surcharge” on the corporation business tax expired on June 30, 2010. This addition to NJ-CBT tax liability no longer applies on calendar year 2010 returns, and does not appear on the 2010 Form CBT-100. So now the minimum tax liability for a NJ corporation is $500.00, and not $520.00. New Jersey will also allow a 20-year carryover of NJ-CBT net operating losses (NOLs), beginning with losses from tax years ending after June 30, 2009 (i.e. calendar year 2009 losses)
Jim very briefly touched on his favorite topic – the 7% contractor withholding requirement – reminding us that, as the new Director had reported, the Division has added 137 new auditors.
Jacob’s part of the show concerned individual issues. The most important part of his presentation concerned the property tax “relief” programs – the NJ Homestead Benefit (no longer Rebate) and the NJ Property Tax Reimbursement (PTR-1 and PTR-2). For detail on his discussion of these programs see my Tuesday and Thursday posts at THE WANDERING TAX PRO.
There was not much change to the NJ-1040. He mentioned that NJ-1040-H replaces TR-1040 for 2010 (see the Tuesday TWTP post), the 2010 NJ Earned Income Credit is reduced to 20% of the federal EITC (it was 25% for 2009), and that NJ will no longer mail out paper Form 1099-Gs to report state income tax refunds. The 1099-G info will be available for download on the NJDOT website – although not yet.
As usual the committee did an excellent job of putting together a great, and truly informative, program. Any complaint I had in the past concerned the fact that the day’s schedule included topics that, while often interesting and well presented, did not really have anything to do with state tax issues. As I mentioned in the beginning of this post, this year the entire day was properly devoted to state taxes and had an excellent line-up of speakers. My only comment is that the New Jersey presentation should have briefly included NJ Department of Labor updates – i.e. the new unemployment, disability and family leave contribution information.
And I actually met one of my blog readers during a break. While standing in the back of the room I was approached by a young fellow attendee who asked if I was Robert Flach. He told me that he was a regular reader of TWTP and this blog and that he found my postings especially helpful as a relatively new member of the tax preparation community. He congratulated me on my Member of the Month honor and thanked me for writing the blogs. It was the best part of a truly great day.
TAFN
