THE NJ-NATP "FAMOUS" STATE TAX SEMINAR

OOPS! They did it again!  The NJ chapter of the National Association of Tax Professionals held another truly “famous” State Tax Seminar at the APA Hotel in Iselin (formerly the Woodbridge Hilton).

In the 25+ year history of this annual event, always at this hotel (a good central and easily accessible location and I hope it will continued to be held here), I have missed only 2, due to snow.  As I have always said, this seminar is a “must attend” for any tax professional who prepares NJ state individual or corporate income, payroll, inheritance, and/or sales tax returns.

As an aside, after registering in the morning I came across Tony Ferrara, a colleague from my days in Jersey City, who operated a tax practice across the street and up the block from my Newark Avenue office.  He had continued the practice began by his father, just as I had continued the practice started by my mentor James P Gill, and his ongoing practice is probably older than my ongoing practice.  I often see Tony at this seminar.  He told me he had recently attended a Gear-Up tax update seminar where the instructor mentioned me by name, citing my reputation for preparing all my 1040s by hand.  I am curious to discover the name of this instructor, which Tony promised to send to me. 

Obviously, as I said last year, the value to the tax pro of this seminar usually depends on the degree of changes to the tax law that affect current and ongoing filings.  While there was not much new with NJ taxes and property tax benefit programs for 2017, there was obviously a huuuge change to federal income taxes going forward at the end of 2017.  While the theme of this seminar is “state” taxes, and I have always believed it should be limited to state tax changes and issues, it has often included some federal updates.

The event always includes a buffet breakfast, in the seminar area, a buffet lunch, previously in another room in the hotel, and an afternoon dessert break.  The meal offerings have always been very good – with the full buffet breakfast among the best of those offered at tax seminars I have attended over the decades. 

This year the lunch, limited to salads and sandwiches, was also held in the seminar area.  I thought this change was “more better” than moving to a separate room, as it saved time and allowed for more of it to be devoted to the true “meat” of the day - the tax presentations.  I would, however, preferred if the lunch buffet had included hot items, as it always had in the past.  There was no afternoon dessert break this year, with minimal dessert choices offered as part of the lunch buffet.  I would prefer the separate dessert break – and I missed the “diabetic-friendly” sugar-free cookies that had been available in the past.

As always, following greetings from new chapter President Mary Rose Martino and seminar chairperson Tony Manziano, the presentations got underway with the “keynote” speaker, always the current Director of the Division of Taxation or a representative.  This year we heard from Acting Director John Ficara. 

I have always felt that over the years, with very few exceptions, these presentations have been of no real substantive value to the tax pros in the audience.  I do accept that this practice is probably a good and necessary one, and, thankfully, very little time in the schedule is allotted to the Director’s presentation.  Mr. Ficara, was a good and obviously knowledgeable speaker and talked in general about what is going on with the Division to modernize and improve services   But there was really nothing of consequence to “take away”.  There was no time for audience questions or comments, and he did not address real systemic issues with the Division, such as its continued unethical practice of remaining “silent” on taxpayer overpayments or unidentified payments.

Perhaps for the future seminars registrants could be asked to submit to the chapter in advance written systemic questions and concerns for the seminar chair to present to the Director instead of the nice but mostly useless keynote address.

What followed for most of the rest of the day was the real reason we all came – the presentation from “Jake and Company”, aka the Division’s “Taxation University”.  Jacob Foy was charged with discussing “tax updates”, and began by telling us that, once again, NJ refunds will NOT begin to be issued until March 1^st. 

He went on to clarify that homeowners who chose to prepay some of their 2018 property tax payments in December 2017 due to the changes for 2018 in the GOP Tax Act will not lose any of their tax deduction on the NJ-1040 or with regard to the property tax relief programs.  For NJ-1040 purposes, the state only cares that what is considered the calendar year’s tax assessment – taxes due on February 1, May 1, August 1, and November 1 - are paid in full.  They do not care in what year these assessments are paid.  You can only deduct up to $10,000 (coincidentally the same limitation used in the GOP Tax Act) in 2017 property taxes on the 2017 NJ-1040, and you can only deduct taxes due in 2018 on the 2018 NJ-1040 , regardless of when you actually gave the money to your municipality.  So, prepaying 2018 taxes in 2017 does not increase your 2017 NJ-1040 deduction, and it does not reduce your 2018 NJ-1040 deduction.

Jake also spent time on the increased Retirement Income Exclusion and the new tax credit for honorably discharged veterans that affect the NJ-1040.  He said the Division will be flexible in considering documentation of a taxpayer’s veteran status, and will accept copies of the DD214, DD256, and a driver’s license with veteran status – which is a license which has the word “VETERAN” on it.

I was pleased that Jake announced the state’s corporate business income tax return (CBT) e-file “mandate” has once again been suspended, as NJDOT is not yet able to allow corporations to submit their CBT-100 and CBT-100S returns directly to the state online, as it does with 1040s via the NJWebFile system.

He also discussed the new totally redone format of the NJDOT website.  Unlike the recent IRS website redo, the NJDOT changes are very much an improvement, and, in my opinion, “more better” than the old website.  Jake asked us to provide our comments on the new format via the “Give Us Your Opinion) feedback option on the website.

Next up was the tag team of Abra Watson, from TU, and Robert Skala, a NJDOT auditor, who gave a good and informative presentation on the calculation of the NJ-1040 credit for taxes paid to other jurisdictions.  Nothing new here, but a helpful, and apparently enlightening to many, review of the rules.

A discussion of the Property Tax Relief programs – the NJ Homestead Benefit and the Property Tax Reimbursement Program – by frequent TU presenter, and friend of NJ-NATP, Alexis Reid was scheduled next.  Unfortunately, Alexis took ill and had to leave, so Abra was asked to fill in at the last minute.  She did a great job with the subject.  Again, nothing new here – just a review of ongoing rules, especially for homeowners who should have been in the PTR program for several years but are just joining now, and those who were in the program but, although still qualifying, for some reason did not submit applications for a couple of years and want to get back in.  If a qualified homeowner has never filed a PTR application, but should have been doing so, he or she should file a separate PTR-1 application form or each of the past missing years.  No checks will be issued for missed years, but a correct base year will be established.

After lunch we returned to NJ state taxes with a presentation on the NJ Inheritance Tax, now the only “death” tax assessed by NJ since the state estate tax was repealed effective January 1, 2017, by Michael Rosen, Chief Auditor for the Inheritance Tax Branch of NJDOT.  While Michael is a witty and knowledgeable speaker, although not a particularly “vibrant” one, I personally have absolutely no interest in the Inheritance Tax return – I do not prepare them and I no longer live in NJ – so I pretty much “zoned-out” during his discussion, as if it were an “ethics” presentation.

As another aside, one voice that was definitely missed at this year’s seminar was that of John Kelly, a former NJDOT employee and frequent speaker at this event in the past, who had become a member of the audience a few years ago after retiring from his state position.  In the past couple of years he provided helpful insight and historical perspective on the NJ issues being presented from his seat in the audience.

Alexis was supposed to talk about NJ Sales Tax next, but as she had left this presentation was cancelled to provide more time for Kathryn Keane of New York, another NJ-NATP favorite speaker, to give a brief presentation of NY State Tax Updates – there were basically none – and, of perhaps more interest to the audience, a federal tax update.  I also have no interest in NJ Sales Tax issues, so this was ok with me.

What we really wanted to hear from KK was a review of the Tax Cuts and Jobs Act.  Unfortunately, she began with, for many in the room a redundant (we had already heard this “stuff” at the NATP Annual Conference, the NATP Tax Forum, and/or the NATP year-end 1040 Update) talk of some other federal developments.  This took time away from what, as I previously said, we really wanted to hear.

To be fair, an hour and a half at the end of the day is certainly not sufficient time to discuss in detail, and provide any true guidance or insight on, the new GOP Tax Act.  KK did a yeoman’s job – but she was not even half-way through her presentation by the scheduled 4:40 PM end of the seminar.  She stayed on and continued, but due to travel requirements, many audience members, myself included, had to leave at this point so we missed much.

If NJ-NATP is going to devote time to the GOP Tax Act, and it should if national NATP is not going to offer a specific seminar throughout the US relatively soon after the end of the tax filing season, it should offer a separate half-day, or more appropriately full-day, seminar, perhaps led by KK or John Sheeley, in May – maybe it’s regular May offering expanded to a full day.  Or maybe it can join with NY-NATP and PA-NATP for a joint full-day seminar on the topic.

For future January state tax seminars, I would like to see presentations on SUI, SDI, and FLI taxes from the NJ Division of Revenue and Enterprise Services or the Department of Labor.  These taxes have been ignored in past years.  Just a thought.

That said, I certainly once again give my “kudos” to NJ-NATP and Jake and Company for another excellent “famous” state tax seminar.  It certainly did what it attempted to do – and, as usual, did it well.

TAFN