Doeren Mayhew’s state and local tax (SALT) advisors highlight the latest SALT news across the nation to keep your business in the know. Here are some notable recent updates in legislation.

State Individual Income Tax


Proposition 208 passed by voters in the last election requires individuals with over $250,000 (single and married filing separately) and over $500,000 (married filing jointly and heads of household) to pay an additional tax surcharge of 3.5% for tax year 2021. However, the estimated tax payments are not required to be made in 2021 to account for the tax surcharge.

Additionally, benefits, annuities and pensions as retired or retainer pay of the uniformed services are no longer taxable in Arizona.


Unemployment Benefits

The federal American Rescue Plan Act (ARPA) of 2021 excluded up to $10,200 in unemployment benefit payments received in 2020 from income for those within certain income brackets. Individuals who included unemployment benefits as income for their 2020 Michigan returns should file their amended returns as soon as possible to get the refund.

Calculating Homestead Property Tax Credits

The Michigan Department of Treasury released Michigan Revenue Administrative Bulletin 2021-25 explaining the procedures to calculate the homestead property tax credit when there is an adjustment of property taxes for a prior year.


The Louisiana Department of Revenue proposed amendments to repeal language pertaining to obsolete team composite tax returns and composite payments, which allowed professional athletic teams to report Louisiana individual income tax on behalf of all nonresident team members. Following the results of a public hearing, the anticipated effective date is March 20, 2022.

State Corporate Income/Franchise Tax


The Paycheck Protection Program Extension Act (PPPEA) (Public Law 117-6) was enacted on March 30, 2021, and extended the covered period of the PPP from March 31, 2021, through June 30, 2021. California law does not conform to this extension and does not allow an exclusion from income for PPP loans made after March 31, 2021.

California also determined a business cannot be publicly traded and must meet the 25% gross receipts reduction qualifications to qualify for expense deductions, basis adjustments and lack of reduction of tax attributes related to AB 80. However, if the forgiven loan relates to an Economic Injury Disaster Loan (EIDL) Grant or Targeted EIDL Advance, the business is not required to meet these qualifications.


The Colorado Department of Revenue (CO DOR) adopted Rule 39-22-303.6-7, which provides guidance for determining which gross receipts from sales of non-intangible personal property are included in the receipts factor. Also, CO DOR repealed 24 outdated Multistate Compact Tax regulations related to allocation and apportionment of income, since they applied to tax years beginning before 2009.


The Vermont Department of Taxes amended its regulation to reflect the state’s shift to market-based sourcing for services and intangible property, effective Dec. 1, 2021. Receipts will be allocated and apportioned to Vermont if the service is delivered to Vermont or if the intangible property is used in Vermont.


On Nov. 30, 2021, the Texas Supreme Court set an oral argument regarding the ongoing case, Sirius XM Radio Inc. v. Hegar. The court of appeals concluded in May 2020 that Sirius XM’s receipts should be sourced based on where the “receipt-producing end-product act” of decrypting the radio signal occurred. In the oral argument, both parties agreed that the receipts are service receipts, which should be sourced to the place of performance of the service. However, both parties disagreed on what those services are.

SALT Deduction Workaround


Michigan H.B. 5376 states flow-through entities can elect to pay Michigan income tax at the entity level and claim a refundable tax credit equal to their share of the tax paid by the flow-through entities for tax years beginning on and after Jan. 1, 2021. Taxpayers who expect to pay at least $800 in state income tax are required to file an estimated return and pay an estimated tax for each quarter.

For tax year 2021, an election must be made before April 15, 2022. For any tax year after 2021, an election should be made on or before the 15th of the third month of that tax year. The election is irrevocable for the next two subsequent tax years.

South Carolina

The South Carolina Department of Revenue issued Revenue Ruling No. 21-15 providing guidance on pass-through entity tax.

State Sales and Use Tax


Massachusetts Appellate Tax Board held that cookies and mobile applications placed on devices of Massachusetts customers do not create a physical presence for an out-of-state retailer.


Michigan Tobacco Product Tax

The Tobacco Products Tax Act established a 32% sales tax on cigars, but it was set to be capped at 50 cents per cigar until Oct. 31, 2021. Public Act 102 of 2021 removed the sunset on the 50-cent cap, so the tax on cigars will continue to be capped at 50 cents per cigar.

Exemption of Sales Tax on Feminine Hygiene Products

The General Sales Tax Act and the Use Tax Act were amended by Public Acts 108 and 109 to exempt the sales tax on feminine hygiene products.

Remote Seller Standards

The Michigan Department of Treasury released Revenue Administrative Bulletin 2021-21 containing guidance on sales and use tax nexus standards for remote sellers, including nexus determination and remote seller filing requirements.

Marketplace Facilitators and Sellers

The Michigan Department of Treasury released a bulletin containing guidance on sales and use taxation as it applies to marketplace facilitators and sellers, including the definitions of marketplace facilitator and marketplace seller, and economic nexus threshold calculation.

New York

In the recent ruling of Matter of the Petition of 1Life Healthcare Inc., the judge stated not all the services provided through software should be considered as a sale of prewritten software. When a service is being offered as an integrated service, it should be taxed according to its primary function. If its primary function is nontaxable, the sale of the service through the software is also nontaxable.

IRC Conformity


Georgia updated its conformity date to the Internal Revenue Code (IRC) to Jan. 1, 2021.

Additional State Bills and Updates


Disclosing Tax Deficiencies

Michigan Treasury’s Taxpayer Initiated Disclosure Program permits a person to voluntarily disclose and pay a tax deficiency without the imposition of penalties. However, the reductions to the lookback period are not permitted, so the taxpayers must file returns and pay the tax owed for all filing periods.

Assessing Personal Property

Michigan extended its legislative provision stating both exempt and non-exempt personal property located in an alternative location within the state due to the COVID-19 pandemic will be assessed property tax in its ordinary location. “Ordinary location” means the geographic area of a local tax collecting unit in the state where an item of personal property would have been located for its primary use but was moved to an alternate location due to the COVID-19 pandemic.

South Carolina

The South Carolina Department of Revenue announced that it has extended the temporary relief regarding a business’s establishment of nexus solely because an employee is working temporarily in a different location as a result of COVID-19 to March 31, 2022.

If you have any questions or concerns about how these new SALT-related items may impact your business, contact Doeren Mayhew’s dedicated state and local tax advisors today.