Indiana

Sales Tax Nexus

Effective retroactive to January 1, 2024, retail merchants without a physical presence in Indiana are required to collect and remit sales tax based on a sole trigger--gross revenue from any combination of:

1. The sale of tangible personal property that is delivered into Indiana.
2. A product transferred electronically into Indiana.
3. A service delivered in Indiana that exceeds $100,000 for the calendar year in which the retail transaction is made or for the calendar year preceding the calendar year in which the retail transaction is made.

Prior to January 1, 2024, a retail merchant was required to collect and remit Indiana sales tax if they had 200 or more separate transactions in the state during the current or prior calendar year. Effective January 1, 2024, Indiana only has the $100,000 threshold. If a merchant met the 200-transaction threshold in 2023 but not the $100,000 threshold, they may close their sales tax account in 2024 if they do not have $100,000 in sales in 2024. They will still have to file all required sales tax returns for 2024.

See the Indiana Department of Revenue website for more information:

https://www.in.gov/dor/business-tax/remote-seller-information/

Pass Through Entities (PTE)

Effective retroactive to January 1, 2022, with regard to tax paid on behalf of an electing PTE, a PTE may not treat an amount less than its own pass through entity tax (PTET) liability as PTET to its direct owners.

Statute of Limitations Changes

Effective July 1, 2024, the legislation defines a "periodic tax" as a listed tax for which a return or report is required to be filed and the tax is required to be remitted four times or more in a calendar year. The term does not include estimated tax payments or withholding payments. If a provision of the law relating to a listed tax permits a taxpayer to file returns or reports or remit the tax less frequently than four times per calendar year, the listed tax is considered a periodic tax for a taxpayer who files or remits less frequently.

The legislation also sets a uniform due date of January 31 of the year after the calendar year for which the return is filed for all periodic taxes.

Confidentiality of Tax Information

Effective July 1, 2024, the Department may share a taxpayer's name and other personal identification information with a tax preparer or tax preparation software provider. This applies in cases where the Department suspects that a fraudulent return has been filed on behalf of a taxpayer and the Department suspects that the system of a taxpayer's previous year tax preparer or tax preparation software provider has been breached.

Michigan

Individual Income Tax Rate

The individual income tax rate for the 2024 tax year will be 4.25%. State law requires a review of the tax rate each year based on a comparison of the rate of inflation to the growth of the state’s general fund. The analysis for the 2024 tax year determined that no changes are needed for this year. The rate for 2023 was 4.05%.

Flow-Through Entity Tax Rate for 2024

The tax rate for flow-through entities including for fiscal year filers with tax years beginning in 2024 is 4.25%. This is imposed at the same rate as the state’s individual income tax.

For the previous year, fiscal filers with tax years beginning in 2023 and ending in 2024 paid FTE tax at 4.05%. Members that claim a credit from these fiscal filers on their 2024 Michigan individual income tax return (Form MI-1040 or MI-1041) may be underpaid if relying solely on the FTE tax credit for the portion of their liability attributable to the flow-through income, which is taxed at 4.25% that year.

Affected members should evaluate the impact of any deficiency and adjust their estimated payments if necessary. Any overpayment claimed as a credit-forward on an individual’s 2023 annual return will be credited as that taxpayer’s first 2024 quarterly estimated payment. This rate differential affects only direct and indirect members of 2023-2024 fiscal year electing flow-through entities; members of calendar year filers should not be affected.

The Department will update forms, instructions, and guidance as necessary to reflect the change to the annual FTE tax rate for tax years beginning in 2024.

New Mexico

A new tax bill signed by Governor Grisham in early March enacts a number of adjustments. Items of interest include an adjustment to individual income tax brackets and rates, the creation of a flat corporate income tax rate, and an amendment to the net capital gains deduction. The bill also includes a number of items relating to clean energy. More details can be found on the Governor’s press release by clicking here.

Wisconsin

For taxable years beginning after December 31, 2023, the state’s current child and dependent care tax credit will be increased from 50% to 100% of the federal tax credit. The maximum amount of employment-related expenses that can be claimed has also been increased to $10,000 for one qualifying dependent and $20,000 for two or more qualifying dependents. You can read the text of AB1023 by clicking here.

For more about State and Local Tax visit MizeCPAs.com