State and local tax issues are a big part of a company's tax liability. In fact, they are so impactful that a lot of companies actively decide to relocate to states that are regarded as low-tax states by the Tax Foundation, such as Florida, Nevada and North Carolina.
Most states have a state income tax in addition to the federal income tax, and in some cases, certain localities have their own income taxes on top of those. Now is a good time to check to make sure you're up on the rules, which can often change with little notice.
The IRS will be addressing the deductibility of state and local tax payments for federal income tax purposes. It's a reminder that federal law controls payments for federal income tax purposes no matter how state law wants to view things.
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