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July 27-28, 2015at

Nintendo of America Inc.Redmond, Washington

Final Program

Institute for Professionals in Taxation®

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Monday, July 27, 2015 Tuesday, July 28, 20158:00-8:45 am Registration

8:00-8:45 am Continental Breakfast

8:45-9:00 am Welcome & Announcements

9:00-10:15 am How Do SALT Exemptions Impact Manufacturing Costs?

10:15-10:30 am Break

10:30-11:30 am Gross Receipts and Sales / Use Tax: What’s Different, What’s the Same?

11:30-12:30 pm Lunch

12:30-1:30 pm Manufacturing Across State Lines - A SALT Case Study

1:30-2:45 pm Start Smart: Audit Planning & Management

2:45-3:00 pm Break

3:00-4:00 pm Give Credit Where Credit is Due: A Look at Credits and In-centives for Manufacturers

4:15- 8:15 pmNetworking at DeLille Cellars Winery~ Buses Departing from Nintendo around 4:15 pm ~

8:00-8:30 am Continental Breakfast

8:30-10:00 am Know the Facts: Administrative, Legislative & Judicial Update for Western States

10:00-10:15 am Break

10:15-11:30 am Finish Off Strong: Audit Issues / Resolution

11:30-12:15 pm Lunch

12:15-1:15 pm An Income Tax Primer for Sales Tax Professionals

1:15-2:15 pm A Property Tax Primer for Sales Tax Professionals

2:15-2:25 pm Break

2:25-3:25 pm Broadening Horizons: Exemptions for Non-Traditional Manufacturers

3:25-3:30 pm Wrap Up / Closing

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W elcome to the Institute’s Manufacturing & Related Industries, SALT Workshop. Workshop Chair: Tarah M. Seehafer, CPA; Workshop Committee Members, Gregg D.

Barton, Esq.; Darcy N. Kooiker, CPA; Donald D. King, CMI; Rachel A. LeMieux, CMI, CPA; and Douglas McFarland, CPA, have put much time and effort into planning and executing this program. On behalf of the membership, I extend to them our sincere thanks for a job well done.

The speakers who are making the presentations have greatly con-tributed to the Workshop. All volunteered to participate and devot-ed their time to develop their presentations. Your attendance at this Workshop speaks to your dedication to advance your knowl-edge in state and local taxes. We encourage communication and networking throughout the Workshop - we learn from the presenta-tions as well as each other.

At the end of the Workshop, you will receive an on-line evaluation survey. Please take the time to complete this survey. Your comments and suggestions provide valuable information for our use in updating and improving the quality of future workshops, and planning educational programs that are responsive to our members’ needs.

If I, your Board of Governors, or the IPT staff can be of assistance, please do not hesitate to contact us.

Best regards,

Margaret C. Wilson, CMI, Esq.

President

2015-2016 Board of Governors

OFFICERS

PresidentMargaret C. Wilson, CMI, Esq.

Wilson Agosto LLP

First Vice PresidentChris G. Muntifering, CMI

MPT Consulting

Second Vice PresidentKellianne M. Nagy, CMI, CAE

Sunbelt Rentals Inc.

Immediate Past PresidentArthur A. Bennett, CMI

Property Tax Assistance Co., Inc.

BOARD OF GOVERNORS

Carolyn L. Carpenter, CMI, CPAJMC Express, Inc.

Leslie S. Fisher, CMIE. I. Du Pont de Nemours & Company

Garfield A. Grant, CMI, CPADuCharme, McMillen & Associates, Inc.

Rick L. Johnson, CMIBelk Stores Services, Inc.

David H. LeVan, CMIAdvantax Group, LLC

Carolyn M. Shantz, CMI, CPASuperior Energy Services

Chip Twomey, II, CMITesoro Companies, Inc.

Allan J. Wells, CMIABB Inc.

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GENERAL INFORMATIONContinuing Education Credits: Approximately 13.5 CPE credits are available for full attendance Monday and Tuesday. Each attendee will be able to obtain a copy of his or her scanned attendance (Certificate of Attendance) through the IPT website on the “My Participation” tab approximately two weeks after the end of the program.

Recommended Field of Study: TaxationPrerequisites: 3 years of professional experience recommendedProgram Level: AdvancedInstructional Method: Group LiveAdvance Preparation Required: None

Workshop Materials: Approximately a week prior to the program, materi-als will be available online for access by program attendees. Click the sign-in but-ton on the upper right-hand corner of the home page and log in with your User-name (Member ID #) and password; it will take you back to the home page. Click on your name in the top right-hand corner of the home page, then click the “My Participation” tab on your member page where you will see meetings for which you are currently registered. Find The Manufacturing & Related Industries: SALT Workshop and go to the “Click Here” link on the right under Program Info to view and print available materials.

Name Badges: Badges will admit participants to general sessions and must be worn by those who attend social events. Admittance by badge will be neces-sarily enforced.

As required by regulatory agencies, IPT must verify individual attendance at ses-sions in order to grant Continuing Education Credits. Each attendee’s name badge has a unique barcode that identifies that individual. In order to obtain CE credit, attendees must have their bar-coded badge scanned during the first 15 minutes of each session. A lost name badge should be reported immediately to the registra-tion desk in order to obtain a replacement. If you do not participate in the bar-code scanning, IPT will not be able to verify your attendance or award any credit in the future. CMI’s will recieve hour for hour Continuing Education Credits for actual session attendance.

Tickets: You will find two beverage tickets in your packet for the networking hospitality hour on Monday night. Tickets have no value until presented to the bartender at the function.

Institute for Professionals in Taxation® is registered with the national Association of State Boards of Accountancy (NASBA) as a sponsor of continuing professional education on the National Registry of CPE Sponsors. State boards of accountancy have final authority on the acceptance of individual courses for CPE Credit. Complaints regarding registered sponsors may be submitted to the National Registry of CPE Sponsors through its website: www.learningmarket.org. In accordance with the standards of the National Registry of CPE Sponsors, CPE Credits are granted based on a 50-minute hour. For more information regarding administrative policies, such as complaints and refunds, please contact our office at (404) 240-2300.

Dress: For the Workshop, business casual dress is appropriate throughout the daytime sessions.

Consent to Use of Photographic Images: Photos will be taken at this event and may be published in IPT publications, multimedia presentations, website, Twitter, LinkedIn and Facebook pages, and other IPT related social me-dia sites. Registration and attendance at, or participation in, IPT meetings or other activities constitutes agreement by the registrant/speaker/attendee to IPT’s use and distribution of the registrant’s, speaker’s, or attendee’s image or voice in pho-tographs, videotapes, electronic reproductions, and tapes of such events and ac-tivities. Tape recording of sessions is not permitted.

Tape recording of sessions is not permitted.

Institute Policies: The Institute has a long-standing policy which prohibits any planned hospitality suites or entertaining by individual members for business solicitation purposes. All social events are scheduled by the Institute, and each member’s participation in these activities is appreciated. Members attending the Workshop should make every effort to attend each social and business function, thereby supporting the organization. The Institute has a policy prohibiting non-IPT literature and distribution of gifts (except in the event sponsorship locations) and the solicitation of business during the seminar. Use of the program registration lists for business solicitation is also prohibited.

The Institute promotes professional certification, education, ethical practices, and discussion of issues of mutual concern with other tax professionals. IPT does, however, prohibit the solicitation of business at Institute functions. If you feel that you are being solicited, please advise the person soliciting you that his or her solic-itation is unwanted. If the behavior persists, please notify the IPT staff immediately so the matter can be directly addressed.

We expect that all attendees will comply fully with these official policy positions of the IPT Board of Governors.

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8:00-8:45 am Registration

8:00-8:45 amContinental Breakfast

8:45-9:00 am Welcome and Announcements

Program Chair: Tarah M. Seehafer, CPAState & Local Tax DirectorWeyerhaeuser NR CompanyFederal Way, WA

IPT President-ElectMargaret C. Wilson, CMI, Esq.PartnerWilson Agosto LLPSomerville, NJ

9:00-10:15 amHow Can SALT Exemptions Impact Manufacturing Costs?

The cost of manufacturing can be significantly impacted by how well state and local sales and use tax ex-emptions are managed. This session focuses on new developments for the key exemptions, specifically those related to the purchase of equipment used in manufacturing and ancillary activities. Relevant issues and devel-opments such as the difference be-tween California’s new partial exemp-tion and full exclusions, the new Texas benefit for R&D, and updates in Idaho, Utah and Wyoming will be discussed with a focus on how they can be suc-cessfully managed for companies and

clients. Although the session content will feature examples from states west of the Mississippi River, all sales tax professionals will gain valuable insight and practical information from this session.

After attending the session, the partici-pant will be able to:1. Implement manufacturing sales

and use tax exemptions effectively 2. Identify case law & legislation

and its impact on businesses and clients

Speakers:Hal Kessler, Esq.Director, Multistate Tax ServicesDeloitte Tax LLPSan Francisco, CA

Andrew ColsonDirector, Multistate Tax ServicesDeloitte Tax LLPSeattle, WA

10:15-10:30 am Break

10:30-11:30 amGross Receipts and Sales/Use Tax: What’s Different, What’s the Same?

This session will provide an in depth look at sales transactions and how sales/use tax is applied as compared to gross receipts taxes, such as Washington’s Business & Occupation (B&O) tax. The discussion will cover

potential differences in nexus stan-dards, the taxable measure, activity classifications, deductions, and sourc-ing involving allocation and apportion-ment. The session will help attendees find the approach that best fits their circumstances.

After attending the session, the partici-pant will be able to:1. Define how gross receipts taxes

differ from sales/use taxes on sales transactions

2. Identify when nexus is created for certain types of gross receipts taxes, but not sales taxes

3. Specify why sales taxes and some gross receipts classifications are allocated, while other gross receipts classifications are appor-tioned

Speaker:Darcy N. Kooiker, CPAPrincipal, Sales and Use TaxRyan, LLCBellevue, WA

11:30-12:30 pm Lunch

12:30-1:30 pm Manufacturing Across State Lines - A SALT Case Study

Discover the “real world” implications of the multistate state tax issues fac-ing manufacturers today. The session

will delve into issues involving direct and indirect taxes through the use of an in depth case study, which will investigate sales and use tax exemp-tions for manufacturing including: pollution control and research and development equipment; implications of transferring manufactured compo-nents and assemblies between plants across state lines; and use of com-puter software in the manufacturing process. Attendees will be encour-aged to participate in developing best practices and viable solutions, while learning to identify potential traps and pitfalls. The case study focuses on the western states, but the information presented can be applied nationwide.

After attending the session, the partici-pant will be able to:1. Identify state tax issues associat-

ed with manufacturing in multiple states

2. Incorporate proactive solutions to minimize the multistate tax impact of various business scenarios

Speakers:Ronald L. Bueing, Esq., CPATax DirectorPricewaterhouseCoopers LLPSeattle, WA

Nicole Bryant, CMITax DirectorPricewaterhouseCoopers LLPSeattle, WA

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1:30-2:45 pm Start Smart: Audit Planning & Man-agement

This session features a panel of sales tax experts walking through the first steps critical in the audit process. During the discussion, the panel will focus on audit planning, kick-off and ongoing process management. They will use their diverse backgrounds to guide attendees through the initial stages of an audit and how deliber-ate and thoughtful planning can lead to positive outcomes. The panel will encourage audience members to weigh in on strategies, best practic-es and lessons learned. A variety of audit approaches will be discussed, for example: an auditor is proposing to assess tax on withdrawn inventory charged to R&D, and you believe that certain uses of the materials are ex-empt and sometimes even transferred back to inventory. However, records supporting such usage and transfers are poor. How can you make your case to the auditor? And your com-pany uses a purchasing company to acquire everything for resale and then resells items to a related company for use. What audit issues can you face when some of the purchases are from contractors installing fixtures or making realty improvements?

After attending the session, the partici-pant will be able to:

1. Prepare files and data needed in connection with a state to conduct a sales and use tax audit

2. Identify the common issues faced in planning and managing an audit

3. Anticipate problems and create solutions for the audit process

Speakers:John P. Lyon, CMI, CPAPrincipal, Sales & Use TaxRyan, LLCLos Angeles, CA

Gus Rivera, Jr.Global Indirect Tax ManagerIntel CorporationSanta Clara, CA

2:45-3:00pm Break

3:00-4:00 pm Give Credit Where Credit is Due: A Look at Credits and Incentives for Manufacturers

State and local jurisdictions are ag-gressively competing for quality jobs and capital investments. They are specifically focused on manufacturing expansion and retention, as well as job creation, through related functions such as distribution and customer service. This session will cover various types of credits and incen-tives such as job creation incentives, investment tax credits and property abatements and how they work, as

well as the difference between statu-tory and negotiated credits and when they can be implemented. In addition, tax professionals will learn how and when to get involved in identifying and securing credits and incentives in order to demonstrate to organizational leadership the value added through their knowledge.

After attending the session, the partici-pant will be able to:

1. Recognize the types of credits & incentives available to manu-facturers and how to effectively implement them

2. Detect the differences between statutory and negotiated credits and the circumstances when to use them

Speakers: Melanie J. McDanielPartnerPricewaterhouseCoopers LLPLos Angeles, CA

Christine BustamantePrincipalKPMG LLPColumbus, OH

4:15-8:15 pm Reception at DeLille Cellars Winery

Come out for an evening reception at the DeLille Cellars, an artisan winery nestled in the hills of Woodinville, Washington. The evening features a wine-tasting experience accompanied by a selection of heavy hors d’oeu-vres. The focus of the evening will be relaxation, the opportunity to network with other tax professionals, and the chance to sample some of the finest wines in the country.

Buses will depart from Nintendo at 4:15 pm and return to Nintendo around 8:30 pm.

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8:00-8:30 amContinental Breakfast

8:30-10:00 am How States Are Playing “Catch Up” to the Economy

As the modern economy transitions from its industrial roots to ones based on the delivery of services, many states are grappling with how to face this fundamental shift. Attendees at this session will get insight as to how states are attempting to expand their tax base in an economy fueled by service delivery and digital goods. It will analyze the varying approaches states have taken to address these changes and will include discussion on Nevada’s consideration of a gross receipt tax and California’s apportion-ment fraction, as well as the Gillette decision. Also on the agenda are the topics of factor presence nexus, three factor apportionment and nexus thresholds for a discussion on what states are doing to meet the needs of an evolving economy. After attending the session, the partici-pant will be able to:

1. Identify strategies used by states to address the evolving economy

2. Analyze the impact of economic challenges that states are facing and how their efforts to address them impact taxpayers

Speaker:Gregory Turner, Esq.Special Counsel, Tax and Estate PlanningSheppard, Mullin, Richter & Hampton LLPSan Francisco, CA

10:00-10:15 amBreak

10:15-11:30 am Finish Off Strong: Audit Issues / Resolution

This session features a panel of tax experts discussing key components of the second half of the audit pro-cess. During the discussion, the panel will focus on the timely completion of audits, negotiation, resolutions of audit issues, and when to protest an assessment drawing upon their own experiences to lead a group discus-sion of best practices, lessons learned and audit approaches.After attending the session, the partici-pant will be able to:

1. Develop auditor/taxpayer relation-ship necessary for successful au-dit management and negotiations

2. Explain the appeals process and analyze the cost benefits of settling or appealing audit assess-ments

Speakers:Tremaine Smith, CMISenior Manager, State & Local Tax ServicesErnst & Young LLPSeattle, WA

Donald D. King, CMISenior Tax Manager, Indirect TaxNintendo of America Inc.Redmond, WA

11:30am-12:15 pmLunch

12:15-1:15 pmAn Income Tax Primer for Sales Tax Professionals

This session is designed to provide the sales and use tax professional with insight into the field of income tax, with emphasis on the topics that sales tax professionals interact with most. Participants will review the basics of state net income taxation including taxability; the computation of state taxable income; definition of a unitary business; consolidated returns and combined reporting; the distinction be-tween business and non-business in-come; and the principles of formulary apportionment. During the session, they will also learn to identify things such as what sales tax professionals do day-to-day that might impact the net income tax result.

After attending the session, the partici-pant will be able to:

1. Explain the basics of a state income tax

2. Identify how sales/use tax deci-sions can impact net income taxes

3. Determine how sales/use tax and income tax strategies can work in

tandem for successful outcomesSpeaker:Gregg D. Barton, Esq.PartnerPerkins Coie, LLPSeattle, WA

1:15-2:15 amA Property Tax Primer for Sales Tax Professionals

Sales tax professionals benefit from a working knowledge of other taxes. For manufacturers, one of the largest of the “other taxes” is the property tax. This session is designed to provide the sales and use tax professional with insight into the field of property tax. It will include a high-level descrip-tion of how the property tax is deter-mined and how manufacturers man-age the tax. The presentation will also include a discussion of specific areas where the sales tax and property tax disciplines intersect.

After attending the session, the partici-pant will be able to:

1. Explain the basics of property taxation for manufacturers

2. Interpret how sales/use tax can affect its property taxes and vice versa

3. Identify the key components of a successful partnership between sales and property tax colleagues

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Speaker:Norman J. Bruns, Esq.PartnerGarvey Schubert BarerSeattle, WA

2:15-2:25 pm Break

2:25-3:25 pmBroadening Horizons: Exemptions for Non-Traditional Manufacturers

In some states, manufacturing is defined broadly so that companies that are not traditionally considered manufacturers may qualify for certain exemptions. Explore some of these nontraditional manufacturing process-es, such as retailing, oil & gas and tele-communications. During this session, attendees will learn how to effectively apply for manufacturing exemptions covering nontraditional industries and processes, with a focus on examples such as oil and gas wells, telecommu-nications switching equipment, and items used to refrigerate, bake, cook or package items.

After attending the session, the partici-pant will be able to:

1. Identify the states in which man-ufacturing activities are defined broadly and what exemptions may be applied

2. Determine if sales/use tax exemp-tions for manufacturing machinery & equipment applies to certain types of activities in various states

3. Comprehend the status of litigation of various manufacturing exemp-tion issues and the opportunity to file protective refund claims

Speaker:Doug Sigel, Esq.PartnerRyan Law Firm LLPAustin, TX

3:25-3:30 pmWrap Up / Closing

A Summer Evening in Washington Wine Country

Experience the best of summer in Wash-ington and enjoy mingling with your col-leagues over delicious artisan wines and hors d’oeuvres in one of the most charming ven-ues in Seattle’s local wine country.

Featured in Wine Spectator mag-azine, DeLille Cellars is a boutique artisan winery creating classically structured Bordeaux-style wines showcasing the purity of fruit from some of the oldest vines in Washington.

This event is included in your $420 event registration fee. Please join us to network and get the most of your experience at the workshop. (Work-shop registration is $395 without the networking event.) If you would like to bring your spouse/guest to the event, an additional $50 fee is due at registration.

Photo taken by Tasha Owen

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Gregg D. Barton, Esq.Partner

Perkins Coie LLPSeattle, WA

Darcy N. Kooiker, CPAPrincipal, Sales and Use Tax

Ryan, LLCBellevue, WA

Donald D. King, CMISenior Tax Manager, Indirect Taxes

Nintendo Of America IncRedmond, WA

Rachel A. Le Mieux, CMI, CPAPartner

Peterson Sullivan LLPSeattle, WA

IPT 2015 Manufacturing & Related Industries SALT Workshop Committee

ChairTarah M. Seehafer, CPAState & Local Tax Director

Weyerhaeuser NR CompanyFederal Way, WA

Members

WORKSHOP GENERAL SPONSORS

Ernst & Young LLP

Marvin F. Poer and Company

Ryan

EVENT SPONSORS

MONDAY MORNING BREAK

MONDAY LUNCH

MONDAY AFTERNOON BREAK

WINE-TASTING RECEPTION

TUESDAY LUNCH

Douglas McFarland, CPATax Manager, Indirect Taxes

Starbucks CorporationSeattle, WA