BIDaWIZ Blog » STATE INCOME TAX

Tax Nexus For Employers That Allow Employees To Telecommute

The BIDaWIZ Team — Fri, 08 May 2015 21:24:32 +0000

Employers that allow their employees to telecommute across state lines may be at risk for exposing their company to additional tax filings. Each state has a different set of rules for establishing nexus or “doing business” in their state, but there are a few general principles to follow.

Telecommuting and state tax nexus
Generally speaking, a business can establish state tax nexus if they have a business location, perform services or generate sales within a particular state. In certain states, this includes employees that regularly and consistently telecommute across state lines. This may be the case even if the out-of-state employer made no sales in the state and the employee telecommuted only part time. Furthermore, there are some states in which nexus is triggered even if the telecommuters are performing back office administrative functions.

Do we have nexus?
The first step is to determine the specific activities that the employee is conducting within their state of residence. You will also need to determine if any company sales are generated from that state. Then you’ll need to review these activities in accordance to state specific rules. For instance, each state has a different definition of, “doing business” in their state and whether or not nexus is created. It’s also important to note that the guidance in the State Department of Revenue websites and specific State citations may not always explicitly cover every specific situation. For example, the term “generally” will be used often in the state citations to cover the exceptions. You also may need to reference past State Supreme Court cases. If you have an employee telecommuting from Florida, an example would be the Florida Technical Assistance Advisement No. 09A-058,17. In this advisory, it was determined that a mail order seller’s use of a Florida-based independent contractor consultant to provide process improvement services to personnel of the company at its corporate headquarters located outside Florida did not cause the company to have sales/use tax nexus in Florida. Working out of her Florida home, the consultant helped the company to research and select new products that it would offer for resale in its mail-order business. The consultant did not have any contact with customers of the company, nor did she provide any services that were detectable by the company’s customers. The Department of Revenue agreed with the company that the term “transaction of business” in the Florida use tax nexus statute “generally … includes activities that further the taxpayer’s ability to establish and maintain a market in this state.” Finding that the consultant’s process improvement activities were provided directly to the company’s corporate headquarters personnel rather than to customers in Florida, the Department ruled that the company was not required to collect and remit Florida use tax on its mail-order sales of merchandise. While this specific case covers use/sales tax, it may be referenced if there are no other similar cases covering telecommuting.

What are the implications for establishing tax nexus?
The result is that the out-of-state employer may be subject to additional corporate tax liabilities and required to file additional returns. The implications can also be long-lasting as several states also have trailing nexus rules.

Should your company offer telecommuting as an option?
While telecommuting provides employees with significant work/life balance, the business must evaluate the financial benefits for providing that option versus the potential additional corporate income tax liabilities and the administrative costs of filing additional state income tax returns. It’s certainly possible that it may be worthwhile to offer telecommuting, but the state tax requirements must first be reviewed.

More questions? Browse answers or ask nexus tax questions online.

Taxes When Working and Living In Different States

The BIDaWIZ Team — Fri, 14 Nov 2014 22:28:28 +0000

This past year we received over 850 state tax questions related to employees living in one state, but working in another. The big concern is that they will have to file and pay taxes in both states. Fortunately, some states have reciprocal agreements in place to alleviate this tax burden.

What are reciprocal agreements?
Reciprocal agreements allow residents living one state, but working in another state to only pay taxes in their state of residency. Thus, the employee will only have to file one state tax return and taxes will only be withheld from their home state. There are a number of states that have reciprocal agreements in place with neighboring states and typically require the employee to file a withholding exemption form with their employer in the state in which they work. Before we go through the states that have agreements, it’s important to note the many states that do not have agreements in place. They are as follows: Alabama, California, Colorado, Connecticut, Delaware, Georgia, Hawaii, Idaho, Kansas, Louisiana, Maine, Massachusetts, Mississippi, Missouri, Nebraska, New Mexico, New York, North Carolina, Oklahoma, Oregon, Puerto Rico, Rhode Island, South Carolina, Utah, and Vermont. In this instance, you may be taxed on income from both states and will need to file for a tax credit with your state tax return in your home state.

Arizona Reciprocal Withholding Tax Agreements
If you work in Arizona and live in California, the District of Columbia, Indiana, Oregon, or Virginia, you can request a withholding tax exemption by filing the following form with your employer: Form WEC, Withholding Exemption Certificate.

Arkansas Reciprocal Withholding Tax Agreement
If you work in Arkansas and live in Texarkana, Texas, you are exempt from withholding tax, you can request a withholding tax exemption by filing the following form with your employer: Form AR-4EC(TX).

District of Columbia Reciprocal Withholding Tax Agreements
If you work in Washington D.C. and live in any other state, you can request a withholding tax exemption by filing the following form with your employer: Form D-4A.

Illinois Reciprocal Withholding Tax Agreements
If you work in Illinois and live in Iowa, Kentucky, Michigan, and Wisconsin, you can request a withholding tax exemption by filing the following form with your employer: Form IL-W-5NR.

Indiana Reciprocal Withholding Tax Agreements
If you work in Indiana and live in Kentucky, Michigan, Ohio, Pennsylvania, or Wisconsin, you can request a withholding tax exemption by filing the following form with your employer: Form WH-47.

Iowa Reciprocal Withholding Tax Agreement
If you work in Iowa and live in Illinois, you can request a withholding tax exemption by filing the following form with your employer: Form 44-016.

Kentucky Reciprocal Withholding Tax Agreements
If you work in Kentucky and live in Illinois, Indiana, Michigan, Ohio, Virginia, West Virginia, or Wisconsin, you can request a withholding tax exemption by filing the following form with your employer: Form 42A809.

Maryland Reciprocal Withholding Tax Agreements
If you work in Maryland and live in District of Columbia, Pennsylvania, Virginia, or West Virginia, you can request a withholding tax exemption by filing the following form with your employer: Form MW 507.

Michigan Reciprocal Withholding Tax Agreements
If you work in Michigan and live in Illinois, Indiana, Kentucky, Minnesota, Ohio, or Wisconsin, you can request a withholding tax exemption by filing the following form with your employer: Form MI-W4.

Minnesota Reciprocal Withholding Tax Agreements
If you work in Minnesota and live in Michigan or North Dakota, you can request a withholding tax exemption by filing the following form with your employer: Form MW-R.

Montana Reciprocal Withholding Tax Agreement
If you work in Montana and live in North Dakota, you can request a withholding tax exemption by filing the following form with your employer: Form NR-2.

New Jersey Reciprocal Withholding Tax Agreement
If you work in New Jersey and live in Pennsylvania, you can request a withholding tax exemption by filing the following form with your employer: Form NJ-165.

North Dakota Reciprocal Withholding Tax Agreements
If you work in North Dakota and live in Minnesota or Montana, you can request a withholding tax exemption by filing the following form with your employer: Form NDW-R.

Ohio Reciprocal Withholding Tax Agreements
If you work in Ohio and live in Indiana, Kentucky, Michigan, Pennsylvania, or West Virginia, you can request a withholding tax exemption by filing the following form with your employer: Form IT-4NR.

Pennsylvania Reciprocal Withholding Tax Agreements
If you work in Pennsylvania and live in Indiana, Maryland, New Jersey, Ohio, Virginia, or West Virginia, you can request a withholding tax exemption by filing the following form with your employer: Form REV-420.

Virginia Reciprocal Withholding Tax Agreements
If you work in Virginia and live in District of Columbia, Kentucky, Maryland, Pennsylvania, or West Virginia, you can request a withholding tax exemption by filing the following form with your employer: Form VA-4.

West Virginia Reciprocal Withholding Tax Agreements
If you work in West Virginia and live in Kentucky, Maryland, Ohio, Pennsylvania, or Virginia, you can request a withholding tax exemption by filing the following form with your employer: Form WV/IT-104R.

Wisconsin Reciprocal Withholding Tax Agreements
If you work in Wisconsin and live in Illinois, Indiana, Kentucky, or Michigan, you can request a withholding tax exemption by filing the following form with your employer: Form W-220.

More questions? Browse answers or ask tax questions online.

Which States Are The Least Tax Friendly?

Ryan Himmel, CPA — Fri, 01 Nov 2013 21:47:48 +0000

In the past, we’ve highlighted the most tax friendly states for retirees. We thought we should also identify the least tax advantageous states for all individuals. It should come as no surprise that California is at the top of the list for having the highest taxes in multiple areas. The other states may surprise you as well, especially as it relates to long-term capital gains tax rates.

Living in Hollywood comes at price
With all of the benefits that California has to offer (i.e. warm weather, beach access and show-biz), state taxes aren’t one of them. California bolsters some of the highest taxes in the country. The state’s income taxes range from 1% to 13.3% and sales taxes are as high as 7.5%. State sales taxes don’t include local taxes, which can be 3% or higher. Then, there is the staggering 13.3% tax on long-term capital gains. California’s capital gains tax rate is a whopping 3.4% higher than Oregon, which holds the 2nd place position in this category. The one bright spot in California is that the state’s property taxes are modest as compared to many other high tax states.

Some Mid-Atlantic States Aren’t Far Behind California
New York, New Jersey & Connecticut all levy high state income tax rates. New York & New Jersey tax residents as high as 8.82% & 8.97% respectively, while Connecticut levies a rate as high as 6.7%. New Jersey and Connecticut have the highest property tax rates in the country and sales tax rates are as high as 7%. New York & New Jersey charge long-term capital gains tax at 8.8% and 9.0% respectively, while Connecticut is at 6.7%. When considering all factors, Connecticut is likely the most tax friendly of these three states.

Vermont, Rhode Island & Maine Aren’t Much Better
Maine and Vermont have state income tax rates as high as 7.95% and 8.95% respectively. In Vermont, restaurant meals and alcoholic beverages are also subject to a 10% and 9% tax respectively. Maine and Vermont both have sales tax rates in the 5.5% to 6% range and long-term capital gains rates are 8.5% to 9.0%. Rhode Island has a lower state income tax rate than both of these state or as high as 5.99%. However, sales tax is 7% and it has the fifth highest property tax rate of all other states in the country when you consider the median home value.

What do you think of your state’s tax rates?

More Questions? Browse Answers or ask your state tax questions online.

The Top Three Most Tax-Friendly States For Retirees

Ryan Himmel, CPA — Thu, 22 Aug 2013 21:50:34 +0000

The mainstream population always seems to view Florida as the best retirement destination. In many respects, most of the population is correct in that it is one of the most desirable places to live during your retirement. However, it’s not the most tax-friendly state when you review all of the other states.

Our approach
While the IRS generally taxes retirement income unless it’s held in a Roth IRA, many states do not. As such, we reviewed all of the states that do not impose a state tax on retirement income. In addition, we identified states with no income, estate or inheritance tax. Lastly, we found several states will low property and sales tax rates.

1 – Wyoming is the most tax-friendly state for retirees
You may be surprised to learn that Wyoming is the most tax-friendly state for retirees. They have no state income tax and this includes retirement income and social security benefits. What’s more, the state sales tax is one of the lowest in the country at 4% with exemptions in entirety for prescriptions and food consumed at home. We would just note that some counties will impose an additional 3% tax. Lastly and this is a great property tax perk, for most property, only 9.5% of the market value is subject to tax. For instance, if a home is valued at $500,000, $4,250 is the assessed tax base. If you’re wondering why taxes are so low in Wyoming, it’s because of the states revenues generated from oil and mineral rights.

2 – Nevada is the second most tax-friendly state for retirees
Similar to Wyoming, there is no state income or estate/inheritance tax. In addition, retirement income and social security benefits aren’t taxed. The sales tax is fairly low at 6.5% and counties may only tax an additional 1.25%. Property tax rates are attractively low with assessed values at 35% of the fair market value, but not as low as Wyoming. There’s also not property tax breaks for seniors as is the case in Wyoming.

3 – Florida is the third most tax-friendly state for retirees
States that don’t have an income tax or a reliable revenue source like in Wyoming, need to make up for the lost revenue elsewhere. This is exactly the case in Florida. While there aren’t many other taxes, sales tax rates can be as high as 7.5%. What’s more, property tax rates are assessed at 100% of the market value. There is a homestead exemption to lessen the property tax burden of up to $50,000 and additional $50,000 for seniors over 65 with low-income, but it can still be high. This is especially the case for retirees with homes valued more than $250,000.

Which states have no income tax?
The seven states that have completely no income tax are: Florida, Alaska, South Dakota, Nevada, Texas, Washington and Wyoming. Two other states that also have favorable tax laws are Tennessee and New Hampshire which only tax dividends and interest.

Taxes are only one factor
Retirees should also consider states with a low cost of living as well as the location of family members. As seniors get older, they will need to rely more and more on their children to take care of them.

More Questions? Browse Answers or ask your tax planning questions online.

The 2013 Tax Increase Will Impact Families Living In These States

The BIDaWIZ Team — Fri, 16 Nov 2012 14:00:59 +0000

Congress and the President still have time to act to prevent tax increases across the board in 2013. Still, the consensus suggests that at least some tax breaks will be reduced or eliminated and many taxpayers will likely pay higher taxes. The tax foundation recently performed an analysis by state to identify how families earning median incomes will fare with a seemingly new tax landscape in 2013. Are you living in state that’s likely to experience a steep tax increase?

Median income families and rising taxes
The analysis conducted assumes that the 2% payroll tax cut expires, all of the Bush-era and Obama tax cuts expire, and the alternative minimum tax (AMT) remains un-patched. As a reminder, the AMT has still not been retroactively patched for 2012. It’s important to note that the expiring 2% payroll tax cut will have the largest impact to median income earning families. The savings was around $2,000 for combined incomes of $100,000 per family.

Typical families living in these states may experience the greatest tax increase
Taxpayers with a median income near $101,682 and with two children can expect a 6.82% tax increase in relation to income or $6,933. Maryland taxpayers have a slightly higher median income at $106,707, but can expect a 6.74% tax increase or $7,194. Connecticut, Massachusetts, and New Hampshire round out the top 5 list with tax increases as a % of income all above 6.53%. We find it interesting, but not surprising that the taxpayers that are likely to see the greatest tax increases, live in the Mid-Atlantic & New England. These states typically have the highest median incomes as compared to states in the rest of the country. In case you are wondering, New York is in the middle of the pack in terms of rising taxes as a % of income for median income earning families.

Where will taxpayers pay the smallest increase in taxes?
The least is Washington state at a 4.12% increase as a % of income, then Hawaii, Colorado, Kansas, Illinois & California. These states are considered middle-income earning compared to other states. This is interesting because it supports the notion that states with high median-incomes and low median incomes will be most negatively impacted by the tax increases. States such as Washington will likely be least impacted. This is the case because many high income earners are penalized without the AMT patch and low income earners may be hurt by losing the child tax credit, a lower standard deduction, and the elimination of the 10% tax bracket.

More Questions? Browse Answers or ask your state tax questions online.

Which States Offer Retirees the Greatest Tax Benefits?

The BIDaWIZ Team — Thu, 27 Sep 2012 12:00:27 +0000

For those living in the Northeast, the common practice is to move to Florida during your retirement years since there is no state income tax and the weather is warm. However, that’s not necessarily the best course of action for all retirees as their specific set of circumstances should play a large role in this decision. Which state should you retire in for tax purposes?

Evaluate states on how they tax retirement income
For the most part, Uncle Sam will be taxing your retirement income unless its held in a Roth IRA or below a certain income threshold. However, the same is not true at the state level. For instance, certain states exempt social security income and pension income. Even more, some states don’t tax a portion of your IRA or 401K withdrawals. It’s true that for most states, the income tax rate is usually in the single digit range, but it can surely add up as you withdraw tens of thousands of dollars each year to support yourself in retirement.

What else should I consider?
Please note that states that don’t have an income tax such as Florida, need to make up for that lost revenue. Typically, they have higher sales tax rates which for Florida is 6% and can be as high as 7.5% depending on the municipality. Don’t forget about property tax rates or taxes for passing on your wealth to your heirs. There are twenty two states with an estate or inheritance tax. The estate tax is based on the estate as a whole, while the inheritance tax is levied on each beneficiary.

What about pension income?
If you worked for the government and have a public pension, these states don’t tax that income: Alabama, Hawaii, Illinois, Kansas, Louisiana, Massachusetts, Mississippi, New York and Pennsylvania.

Bottom-line which are the most tax-friendly states for retirees?
It depends on your specific set of circumstances, but generally these states offer the greatest tax benefits to retirees: New Hampshire, Florida, Delaware, Texas, Arizona and South Carolina. Alaska would also make the list, but the lifestyle isn’t very conducive for many retirees. Please note that New Hampshire is often overlooked even though it is one of the only states with no income tax or sales tax.

More Questions? Browse Answers or ask your retirement planning tax questions online.

You’re Probably Paying Too Much in Property Taxes

The BIDaWIZ Team — Mon, 29 Aug 2011 15:00:56 +0000

The housing market still hasn’t recovered to normal levels of growth with many markets still down significantly compared to 2005. Despite this significant decline, property taxes have not been falling much and could even be rising for your home. There are steps that you can take to address this discrepancy and potentially save hundreds, if not thousands of dollars on your annual property taxes.

Why Your Property Taxes Are Too High
According to the National Taxpayers Union (NTU), 30% to 60% of all taxable property is over-assessed. This is due to many factors but the main one is the time lag between the changes in the market values of homes over the past few years and the frequency of how often properties are reassessed by local governments. Most local governments reassess properties only every three years and in some areas only every five years.

Tax Savings from a Successful Property Tax Appeal
It depends on many factors, but it could be several hundred dollars to several thousand annually. For instance, if your property was valued at $750,000 in 2005 but has fallen to $500,000 or down 33% because of poor market conditions and your local property tax rate is 1.5%, your annual property taxes should be lower by $3,750 ($11,250 – $7,500).

If you are also wondering about appealing the 1.5% property tax rate, that’s not possible, since it is levied by your local government for the entire jurisdiction. It is also important to note that many local governments are facing significant budget problems and thus are more likely to raise property tax rates than lower them. As a side note, property taxes account for ~35% of all local government revenue (US Census 1st Quarter 2011).

How Do I Appeal My Reassessment?
The first step is to contact your county appraiser for the latest reassessment if you didn’t receive one recently in the mail. Ask for the appraisal details and specific methodology the appraiser used to reach a conclusion. Generally speaking, a county tax appraiser will make an assessment based on the value of the home, size of home (sq. ft), number of rooms, property area, selling price and value of similar homes. Most successful appeals occur when an error is identified in the county appraiser’s calculation or methodology (i.e. number of rooms, sq. ft).

If you disagree with the evidence in the appraiser’s file, then you can file a petition to appeal with all of the supporting evidence that suggests the reassessment was inaccurate. The more credible supporting evidence you can provide, the more likely you’ll have a successful outcome. This may mean getting an independent appraisal of your home which usually costs $250 to $500. If you aren’t comfortable with appealing an assessment on your own, you can hire a 3rd party to act on your behalf, but most 3rd parties require an upfront fee and take a % of the tax savings for successful outcomes.

As you might have expected, filing an appeal comes with a fee. It won’t break the bank but it can cost you $50 and local governments seem to be raising the fees of late.

How Much Time Do I Have to File an Appeal & how long does it take to process?
After you receive your property tax reassessment, you’ll typically have 30 days to file an appeal but some states offer more time. Last week (8/22), homeowners of Miami-Dade county received their property tax notices and were told they must file an appeal before September 19th. On the other hand, residents of Los Angeles have between July 2nd and November 30th to file an appeal for 2011. Once your appeal is filed, it can take 45 to 60 days to receive a response.

Is Now a Good Time to File an Appeal?
It depends on your specific set of circumstances but the answer is probably yes based on the current conditions in the housing market. The ratio of home prices in relation to annual income is an effective barometer for the health of the housing market. Back in 2005, home prices were five times the annual income of homeowners and even higher in certain areas. Prices are now near three times the income level of homeowners which is around the historical 15 year average pre-bubble (1985-2000). While the housing market will likely to continue to fall in certain markets, especially with foreclosure rates still high, this may indicate that we are reaching a more stable housing environment over the next year or two. This may lead one to believe that now is the right time to appeal a reassessment.

More Tax Questions? Browse Answers or Ask a CPA.

The Renters Tax Credit For Lower Income Earners

The BIDaWIZ Team — Wed, 06 Apr 2011 16:08:27 +0000

It may seem as though homeowners and landlords are the only ones that benefit from property tax write-offs. In large part, this is true. But if you are a low-income renter, you might be in luck. That’s right, in some states, renters can actually claim a tax credit for paying rent on property that is subject to taxes.

Renters May Pay Property Taxes
Homeowners and landlords are not the only ones that can benefit from property tax write-offs. In some states, there is a renters tax credit for low income earners to offset the amount of property taxes that they pay as part of their monthly rent bill. The landlord effectively passes on the cost of property taxes to the tenant. Some states refer to this credit as a “homestead” credit, but it is the same thing as the renters tax credit.

What is the amount of the tax credit?
The size of the tax credit also varies by state and marital status of the taxpayer but generally the amount is a few hundred dollars to several hundred dollars in tax savings. Remember, a tax credit is a reduction in the total tax liability dollar for dollar for a specific tax year. Speaking of which, some states such as California won’t allow you to apply the tax credit unless you have a tax liability at the end of the year.

How do I know if I qualify?
Each state department of treasury has different rules but your income level, type of residence, and age are factored into the qualifications. This means that renters earning over $100,000 generally do not qualify for the credit. In addition, many states may only offer this credit for the elderly (over 65 years old), disabled and blind. To find out if you qualify for the tax credit, below we’ve listed links to each state’s department of treasury website. If you cannot find the information relevant to your state, then review the instructions on your state income tax form since it should contain the necessary information.

Some of the states that offer this tax credit are the following:
California, Maryland, Massachusetts, Michigan, Minnesota, Missouri, New Jersey, Wisconsin. To check if your state offers this credit, visit the directory of each state’s department of treasury website.

More questions? Ask your capital gains tax questions online.

Where Is My California State Tax Refund?

The BIDaWIZ Team — Tue, 19 Oct 2010 20:13:39 +0000

Californians seem to get no breaks. State income tax refunds still have not been issued to both individuals & businesses due to the State’s “Cash Flow Problems.” That can anger many taxpayers because essentially they have given their government a loan & haven’t gotten paid back on time. So how long do these taxpayers have to wait for tax refunds?

When Will I Get My Refund?
Both individual & business taxpayers in good tax standing will be paid when a Revenue Anticipation Note (RAN) is issued or when the treasury has enough funds. Late filers may be subject to even further delays if their 2009 tax return was not processed by October 7th, 2010.

Why Is the State Delaying Refunds?
In short, because the State is facing major cash flow problems. Also note that the State doesn’t want to become a debtor to individuals & businesses by being forced to issue IOUs.

Will the State Be Awarding Me Interest For the Delay?
The State should be awarding taxpayers that are entitled to but have not yet received a tax refund. Taxpayers will be awarded only if it has been over 45 days since the taxpayer filed their return in the current year. But, don’t expect the interest to be significant. It will likely be something in the 3-5% range of the tax refund but prorated annually for each day that passes.

Any Advice to Get My Tax Refund Quicker?
Unfortunately, as of now the State has complete control over when the refunds will be sent to the taxpayers. But, you can still apply the tax refund to your estimated 2010 tax payments if you requested to do son on your 2009 tax return. In addition, if you owe any back taxes to the State then the refund will be used to satisfy those debts.

Should I Update My W-4 Form?
One of the ways to compensate yourself for not receiving your tax refund on time is to update your W-4 Form (i.e. increase allowances) so that you owe a tax bill in 2010. That way, your paychecks will be large which compensates for the unpaid tax refund. But, this is only recommended in situations in which you have a relatively small tax refund as you could potentially face penalties for owing a very large tax bill for the 2010 tax year.

More Tax Questions?

Living on a Boat Tax Questions

The BIDaWIZ Team — Mon, 22 Feb 2010 08:00:18 +0000

Ah, the prospects of living on a boat traveling from port to port makes us all smile. While sailing into the sunset is a beautiful thing, unfortunately it does come with some tax questions.

Do I owe Federal Taxes?
Regardless of where you are physically located, you will have to declare your income for federal tax purposes.

What if I Travel from State to State?
You will only have to file taxes in a state if you physically earn income in that state. For example, if you take a job in a state, and are paid wages, those wages are taxable in that state and state specific taxes are withheld for that state. This is why on a W-2 form, the state designation is listed on the bottom left hand corner of the form.

But note that if you do not work in the state, then there are no tax implications. Items like social security, interest, and dividends are not state specific so they are not allocated to that state for income tax purposes.

Do I always Pay State Taxes if I Earn Income in a State?
Even if you do earn income in a state, if it is below a certain amount (which varies from state to state), then there would be no income tax filing requirement (unless you had taxes withheld, in which case you should file to get the taxes refunded).

Key Takeaway
You have to declare income for federal tax purposes but may not be subject to state taxes which depends on whether or not you earned income in that state & the specific state tax laws.