State and Local Tax Solutions
State and Local Tax (SALT) regulations are known for their complexity and can be a significant source of frustration for individuals and businesses alike. This complexity often leaves taxpayers exposed to potential errors, penalties, and missed opportunities for savings. At CKH Group, our dedicated team of tax experts specializes in helping clients understand, manage, and optimize their state and local tax obligations.
As a leading CPA firm based in Atlanta, we take pride in offering SALT Tax Services designed to:
- Minimize your tax liability
- Reduce risk or costly errors
- Give you peace of mind through expert compliance
What Is State and Local Tax (SALT)?
State and Local Tax encompasses all taxes you might have to pay on a state or local level. State and Local taxes can include state income tax, property tax, sales and use tax, occupancy tax, and franchise tax. These taxes vary from state to state and location to location, which is why it is important to consult with an accountant in these areas.
State Income Tax
State income tax is a significant part of your overall tax liability, but because regulations vary from state to state they can be a major source of headache. Our experts are well-versed in the tax laws of all states and can provide tailored solutions to minimize your state income tax exposure and potentially find areas to apply state specific tax deductions.
Property tax is a real estate ad-valorem tax, which means the tax is based on the assessed value of the item, which can be considered a regressive tax. It is calculated by the local government where the property is located and paid by the owner of the property. These tax rates and the types of properties taxed vary by jurisdiction.
Sales and Use Tax
Sales and Use Tax encompasses two different types of taxes that often go hand in hand because they are both imposed on the sale of goods and services. Sales tax is a tax on the sale of tangible personal property, while use tax is a tax on the use of that property within the state. Sales tax is typically charged at the point of sale.
Other State and Local Taxes
An occupancy tax is a tax that hosts and property managers are required to collect from guests to pay over to state and/or local tax authorities. This tax might also be called a hotel lodging tax, tourist tax, room tax, or sales tax. Occupancy taxes are typically a percentage of the cost of the stay added to the final bill.
Occupancy Taxes are paid by the rental guest rather than out of your pocket, but just because you aren’t paying doesn’t mean you’re off the hook! You, as the host, are responsible for collecting and remitting it to tax authorities. Understanding occupancy taxes is crucial to hotel owners or hosts of short term rentals, especially when they vary state by state. Contact us to learn how CKH Group can help you stay compliant.
Franchise tax refers to a tax paid by certain enterprises that want to do business in some states. It is also called a privilege tax, and it gives the business the right to be chartered or to operate within that state. Despite the name, a franchise tax is not actually a tax on franchises and is separate from federal and state income taxes that must be filed annually.
Like any State and Local Tax, the tax rates on a franchise tax can vary state to state. States that have franchise taxes are Alabama, Arkansas, California, Delaware, Georgia, Illinois, Louisiana, Mississippi, Missouri, Minnesota, Nevada, New Hampshire, New York, North Carolina, Oklahoma, Tennessee, Texas, Vermont, and the District of Columbia.
What is the State and Local Tax Deduction (SALT deduction)?
The SALT deduction is a part of the U.S. federal income tax code that allows taxpayers to deduct certain taxes paid at the state and local level from their federal taxable income: property taxes plus state income, or sales taxes (but not both).
The Tax Cuts and Jobs Act (TCJA) of 2017 placed a cap of $10,000 on the total amount of state and local taxes that can be deducted from federal taxable income. The intention of this deduction is to offset some federal taxpayer liability by excluding income already taken in taxes for state and local government services.
Do I need to pay State Income Taxes?
There are some states in which state income taxes are not levied: Alaska, Florida, Nevada, New Hampshire, South Dakota, Tennessee, Texas, Washington, and Wyoming. It is important to note that Washington does impose a state capital gains tax on certain high earners, though. Aside from that, yes, you should be filing a tax return for both federal taxes and state taxes. If you are uncertain what specific state and local taxes (or deductions) might apply to you, contact CKH Group to learn more!
Why Choose CKH Group?
CKH Group’s State and Local Tax Services are designed to unlock your tax potential and secure your financial well-being.
With CKH Group, you’re not just getting a CPA firm; you’re gaining a trusted partner committed to your success. Discover the CKH Group advantage, where excellence, integrity, and expertise come together to create a powerful tax partnership for you. Contact us today to explore how our SALT Tax Services can add value to your organization.