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Advanced Multistate Taxation of Partnerships, Individual Partners, and SALT PTE Elections

Business vs. Nonbusiness Income Characterization, Reconciling Conflicting State Tax Treatments

Note: CLE credit is not offered on this program

Recording of a 110-minute CPE webinar with Q&A

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Conducted on Tuesday, February 13, 2024

Recorded event now available

or call 1-800-926-7926

This course will give partnership tax advisers a comprehensive exploration into advanced multistate tax issues facing partnerships with income or operations in multiple states. The program will provide tax advisers and professionals with a detailed and practical guide to critical state tax issues and trends impacting individual partners owning shares of multistate partnerships. The panel will discuss critical questions such as the evolving state pass-through entity (PTE) elections and considerations for the owners.

Description

One of the more challenging areas of multistate tax practice is the taxation of partners in partnerships conducting activities in more than one state. Navigating various states' treatment of partnerships, particularly their nonresident partners, can result in unforeseen tax consequences and compliance burdens. Tax advisers must resolve several critical issues to report partnership income accurately.

Determining whether the partnership's activities create nexus within the state, attributing the character of partnership income as active business income or passive investment income, and deciding whether the partnership elects to file a composite return or withhold tax are just some of the challenges faced by tax advisers. Reconciling various states' approaches to taxation of multistate partnerships and partners creates additional complexity in tax reporting and planning.

Determining whether the character of partnership income is at the partnership level or the partner level is crucial. Very few states have issued any guidance regarding where to make that income determination. Some states that have addressed the question have split results. Because taxpayers must apportion business income and allocate nonbusiness income to the source state, the tax results vary from state to state regarding the proper taxation of partnership income.

Since the IRS issued Notice 2020-75, several states have enacted PTE elections. These elections are meant to benefit the individual owners of the partnership, but there are several considerations before making the elections.

Listen as our experienced panel offers a comprehensive view of states' approaches to taxing partnership income.

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Outline

  1. Nexus overview
  2. Allocation vs. apportionment of partnership income
  3. State tax updates
  4. States requiring withholding on nonresident partners
  5. State PTE elections

Benefits

The panel will discuss the following critical issues:

  • State sourcing and taxation of income
  • State PTE elections and related considerations
  • States that require business/nonbusiness income determination at partner vs. partnership level
  • State withholding considerations

Faculty

Moderski, Denisse
Denisse Moderski
Director
Eisner Advisory Group

Ms. Moderski is a Director in the firm’s State and Local Tax Group. With over 10 years of experience, she...  |  Read More

Montorio, Nicholas
Nicholas Montorio
Director
Eisner Advisory Group

Mr. Montorio is a State Tax Director within the firm's Tax Services Group. With over 15 years of experience, he has...  |  Read More

Access Anytime, Anywhere

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CPE On-Demand

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