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The Still-Rising Tide—Will Investment Managers Be Swept Up in State Income Tax Trends?  


Author:  Gregory A. Bergmann.; Keith Gray.


Source: Volume 35, Number 01, Fall 2017 , pp.51-70(20)




Journal of Taxation of Investments

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Abstract: 

More and more states are looking to increase state income tax revenues by expanding their definition of nexus beyond physical presence to include “economic activity” in the state—a trend that has continued for several years. In addition, more states are moving from cost of performance to market-based sourcing for receipts from services and intangibles. The question thus arises: Do these new rules apply to investment funds and investment managers? If they do, the partners in the funds and fund managers may face new state tax liabilities as well as some sticky compliance and withholding rules. Copyright © 2017 Deloitte Development LLC.

Keywords: investment manager, investment fund, economic nexus, market sourcing, asset management, state tax, private equity, hedge fund

Affiliations:  1: Deloitte Tax LLP; 2: Deloitte Tax LLP.

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