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Rethinking the State Taxation of Services After COVID-19

As policymakers reconsider indirect taxation overhauls prompted by the COVID-19 pandemic, tax leaders will have an influential advocacy mandate.

Best Practices for Managing and Mitigating Sales Tax Audit Risk

In this Tax Notes State article, Vertex Chief Tax Officer Michael Bernard and Principal Economist and Tax Policy Advisor George Salis discuss possible indirect taxation overhauls prompted by the COVID-19 pandemic.

Global crises tend to accelerate trends. For example, COVID-19 may have fast-tracked many organizations’ transitions to remote-work models and will also hasten and compel three preexisting, but tentative, tax trends:

  1. an overhaul of indirect taxation at the state and local levels;
  2. public finance and reform regarding the acceleration of payments and tax revenue collection; and
  3. the reacquisition and expansion of corporate tax leaders’ new core skill set.

Once federal, state, and local governments tally the economic fallout from the coronavirus pandemic, they will consider a wider range of sales and use tax increases, tax base expansions, exemption eliminations, and the creation of new types of tax.

In this article, Michael and George address the following questions and more:

  • Will states revisit efforts to tax traditional services?

  • What should tax leaders expect when states foresee revenue shortfalls? 

  • What is the current state of U.S. digital services tax?

  • How can tax leaders influence tax policy?

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Featured Authors

Michael J. Bernard, Chief Tax Officer – Transaction Tax at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

Michael J. Bernard

Chief Tax Officer, Transaction Tax

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Michael Bernard is the Chief Tax Officer of Transaction Tax. In his role, he provides insight and thought leadership around tax department operations, U.S. indirect tax, tax risk management, and tax policy, as well as emerging tax trends. He is an executive-level tax attorney with a diverse portfolio of experience in corporate tax, administration, and finance, including a substantive knowledge of U.S. and international tax laws.

Prior to joining Vertex, Michael was in various tax leadership roles at Microsoft Corporation for 28 years, the most recent being Senior Director – Tax Counsel. Michael led teams in the following functional areas: direct and indirect tax controversy, sales and use, business license, property, tax IT, SOX, and telecommunications. He also co-led a corporate taxpayer advocacy group with the Washington Department of Revenue and was a Director on the Board of the Washington Research Council. Michael has also testified before administrative and lawmakers at both the federal and state level.

Michael earned both a J.D. and a Bachelor of Science in Business Administration from Creighton University. He is a part-time lecturer of Law in the LLM program at the University of Washington School of Law. Michael also served on the board of directors, executive committee, and chaired committees for The Tax Executives Institute (TEI) for nearly 25 years.

George L. Salis, Principal Economist and Tax Policy Advisor at Vertex Inc. Vertex's Chief Tax Office (CTO) provides insight regarding the impact of tax regulations, policy, enforcement, and emerging technology trends on global tax department operations.

George L. Salis

Principal Economist & Tax Policy Advisor

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George L. Salis is Principal Economist and Tax Policy Advisor who is an economist, lawyer and tax professional with several years of experience in international taxation and trade compliance, tax planning and controversy, fiscal regulation and tax economics consulting. He is responsible for analysis of economic, legal, financial, trade, and development issues in countries, as well as tracking and analyzing the rapid change in tax policies and regulations, and inter-governmental organizations, and tax administrations around the world.

George is the recipient of the Advanced Certificate in EU Law from the Academy of European Law, European University Institute in Florence, and the Executive Certificate in Economic Development from the Harvard Kennedy School of Government, George received his BSc in economics and political science, an LLB (Honours), an MA in legal and ethical studies, and an LLM (Honours) in international tax law. He holds a PhD in international law and economic policy, and an SJD in Taxation from The University of Florida, Levin College of Law. He is a Certified Business Economist (CBE- NABE).

Our Global Tax Resources Related to COVID-19

In light of the current coronavirus (COVID-19) healthcare crisis impacting businesses, we have compiled a list of resources that provide information at the international, U.S. federal, and state levels.

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