The most popular form of business entity selected these days is a pass-through entity and none more so than the limited liability company. For Federal income tax purposes, LLCs and other Subchapter K entities offer limited liability, without the corporate tax imposed by Subchapter C. For state tax purposes, including income taxes, things are not so simple. As there are 50 states (and a District), there are 51 different ways the states impose taxes on these enterprises, and in most states the rules are not clearly defined and even still evolving. Limited partnerships also have remained popular. The panel provides the latest update on the state tax treatment of these enterprises, addressing recent legislation and the latest court cases. The panelists address state approaches to the income and franchise tax treatment of pass-through entities, including an in-depth discussion of the application of the unitary business principle to Subchapter K entities and their members, touching on state income tax withholding obligations and the complications of apportionment for these entities and their members engaged in multistate activities, as well as the implications of different tax types such as real estate transfer taxes, sales taxes on transactions among pass-through entities and their members, and recent nexus developments as they affect nonresident members.
Other Speakers:Steven Wlodychak, Esq., Principal, Indirect Tax, EY LLP
Matthew J. Polli, CPA, Partner, Deloitte Tax LLP