{"id":2025,"date":"2022-04-27T17:14:36","date_gmt":"2022-04-27T17:14:36","guid":{"rendered":"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/"},"modified":"2025-07-23T20:03:06","modified_gmt":"2025-07-23T20:03:06","slug":"state-tax-compliance-checklist","status":"publish","type":"insight","link":"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/","title":{"rendered":"State Tax Compliance Checklist"},"content":{"rendered":"<div id=\"sh-block--1921845412\" class=\"sh-block-wrapper text-block \">\n\n\n\n<!-- text-block\/render.twig-->\n<div class=\"container\">\n    <div class=\"wysiwyg layout-1col\">\n        <p class=\"MsoNormal\" style=\"text-align: justify;\"><a name=\"_Hlk100587442\"><\/a>Over the past four years, numerous Federal tax law changes have kept state tax professionals busy. The pace in which these changes are coming are unlikely to slow down in the near future. While we may have gotten an unexpected reprieve from additional changes that would impact the 2021 tax year, we must still be prepared to navigate uncharted territory \u2013 and that means staying on top of our SALT compliance processes and procedures, so we can absorb those changes when they inevitably arrive.<\/p>\n<p class=\"MsoNormal\" style=\"text-align: justify;\">Here is our checklist of some key <a name=\"_Hlk100587490\"><\/a>State Tax Compliance \u201chousekeeping\u201d items to keep on your radar.<\/p>\n<h2>Q1 State Tax Compliance Tasks<\/h2>\n<p><span style=\"text-align: justify;\">At this point in the year, you should have completed the following tasks. If you haven\u2019t done so already, now is the time to do so:<\/span><\/p>\n<ul class=\"checklist\">\n<li class=\"MsoNormal\" style=\"text-align: justify;\"><b>Review your tax calendar<\/b>\n<ul class=\"checklist\">\n<li class=\"MsoNormal\" style=\"text-align: justify;\">The first quarter of the tax year is always a good time to review the upcoming tax calendar, especially if you entered into new jurisdictions or anticipate an upcoming business acquisition that may require registering in certain states and obtaining state tax identification numbers. Furthermore, it is just as important to review your previous year\u2019s filings to identify any jurisdictions which you exited last year or perhaps marked any returns as \u201cfinal\u201d for other reasons<\/li>\n<\/ul>\n<\/li>\n<li><b>Review the impact of new state law changes<\/b>\n<ul class=\"checklist\">\n<li>It is critical to have a good understanding of any law changes which were recently enacted or perhaps ones which were previous enacted but now take effect in 2021. Some examples include:\n<ul class=\"checklist\">\n<li>State sourcing rules<\/li>\n<li>Rate changes<\/li>\n<li>Combined reporting requirements<\/li>\n<li>Federal law changes<\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<\/li>\n<li><span style=\"font-variant-numeric: normal; font-variant-east-asian: normal; font-stretch: normal; font-size: 7pt; line-height: normal; font-family: 'Times New Roman';\">\u00a0<\/span><b>Identify potential state nexus issues<\/b>\n<ul class=\"checklist\">\n<li>The <a style=\"text-align: justify; text-indent: -0.25in;\" href=\"https:\/\/www.mtc.gov\/Uniformity\/Project-Teams\/P-L-86-272-Statement-of-Information-Work-Group\">recently revised MTC statement<\/a><span style=\"text-align: justify; text-indent: -0.25in;\"> has made it increasingly difficult for many online sellers to claim protection under P.L. 86-272.<\/span><span style=\"text-align: justify; text-indent: -0.25in;\">\u00a0 <\/span><span style=\"text-align: justify; text-indent: -0.25in;\">The updated guidance is meant to address changes in how business is conducted, specifically where a company sells tangible personal property directly through its website or app offering and the sale is approved and shipped from outside the customer\u2019s state with no other connection to the customer\u2019s state.<\/span><span style=\"text-align: justify; text-indent: -0.25in; font-size: 13.5pt; line-height: 107%; font-family: Arial, sans-serif; color: #545759; background-image: initial; background-position: initial; background-size: initial; background-repeat: initial; background-attachment: initial; background-origin: initial; background-clip: initial;\">\u00a0 <\/span><span style=\"text-align: justify; text-indent: -0.25in;\">As a result, taxpayers may find themselves more vulnerable to state income tax nexus than in previous years.<\/span><span style=\"text-align: justify; text-indent: -0.25in;\">\u00a0 <\/span><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\">However, the revised MTC statement is not automatically adopted by states and must be officially adopted as law or administrative guidance in order for it to take effect. It is always recommended to take a fresh look at filing positions on an annual basis to make sure you remain in compliance with each state\u2019s current laws<\/span><\/span><\/span><\/span><\/span><\/li>\n<li>California is the first state to incorporate the guidance by the MTC.<span style=\"text-align: justify; text-indent: -0.25in;\">\u00a0 <\/span><span style=\"text-align: justify; text-indent: -0.25in;\">Other states are likely to follow.<\/span><span style=\"text-align: justify; text-indent: -0.25in;\">\u00a0 <\/span><span style=\"text-align: justify; text-indent: -0.25in;\">See <\/span><a style=\"text-align: justify; text-indent: -0.25in;\" href=\"https:\/\/gtmtax.com\/tax-insights\/articles\/the-internet-state-nexus-and-sales-tax-the-impact-of-p-l-86-272\/?utm_source=Pardot&amp;utm_medium=Email&amp;utm_content=Blog&amp;utm_campaign=State+Nexus+Blog\">The Internet, State Nexus, and Sales Tax: The Impact of P.L. 86-272 &#8211; Global Tax Management (gtmtax.com)<\/a><\/li>\n<li>Remote workers \u2013 have you hired new employees to work remotely in new states?<span style=\"text-align: justify; text-indent: -0.25in;\">\u00a0 <\/span><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\">Have you allowed workers to continue working remotely after COVID-19 restrictions lifted? As states have begun lifting COVID-related restrictions many taxpayers who continue to allow their employees to work remotely may find themselves with additional state filings in 2021 so it is critical to review where your employees are working to determine if you have additional filing requirements<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li><b><\/b><b><\/b><b><\/b><b>Request apportionment data from business units<\/b><\/li>\n<li><b style=\"text-align: justify; text-indent: -0.25in;\"><\/b><b style=\"text-align: justify; text-indent: -0.25in;\"><\/b><b style=\"text-align: justify; text-indent: -0.25in;\"><\/b><b style=\"text-align: justify; text-indent: -0.25in;\">Set up EFT\/ACH debit payment process to avoid the rush of last-minute check-cutting<\/b><\/li>\n<li><b style=\"text-align: justify; text-indent: -0.25in;\"><\/b><b style=\"text-align: justify; text-indent: -0.25in;\"><\/b><b style=\"text-align: justify; text-indent: -0.25in;\"><\/b><b style=\"text-align: justify; text-indent: -0.25in;\">Calculate quarterly estimates for the current tax year<\/b><\/li>\n<li><b style=\"text-align: justify; text-indent: -0.25in;\">Submit Q1 estimates<\/b>\n<ul class=\"checklist\">\n<li><span style=\"text-align: justify; text-indent: -0.25in;\">These are generally due on the 15<\/span><sup style=\"text-align: justify; text-indent: -0.25in;\">th<\/sup><span style=\"text-align: justify; text-indent: -0.25in;\"> day of the fourth month).<\/span><span style=\"text-align: justify; text-indent: -0.25in;\">\u00a0 <\/span><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\">However, there are a handful of states that have Q1 estimated payments which are actually due in the first quarter<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li><b style=\"text-align: justify; text-indent: -0.25in;\">Consider an often-missed election &#8211; <\/b><a style=\"text-align: justify; text-indent: -0.25in;\" href=\"https:\/\/mtrevenue.gov\/publications\/waters-edge-election-form-we-elect\/\"><b>Montana Water\u2019s Edge<\/b><\/a>\n<ul class=\"checklist\">\n<li>This election is due within 90 days of the beginning of the first year in which it is intended to become effective and is binding for a period of three years.<span style=\"text-align: justify; text-indent: -0.25in;\">\u00a0 <\/span><span style=\"text-align: justify; text-indent: -0.25in;\">The Water\u2019s election must be made every three years, or the filing method will default back to a worldwide combined return for members of a unitary business<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Q2 State Tax Compliance Tasks<\/h2>\n<p>By the end of Q2, you should complete the following tasks:<\/p>\n<ul class=\"checklist\">\n<li><b style=\"text-align: justify; text-indent: -0.25in;\">Review the apportionment data received<\/b>\n<ul class=\"checklist\">\n<li>If collecting raw data that requires manual manipulation, consider a technology solution, such as <a style=\"text-align: justify; text-indent: -0.25in;\" href=\"https:\/\/gtmtax.com\/tax-insights\/?_resource_topics=alteryx\">Alteryx<\/a><span style=\"text-align: justify; text-indent: -0.25in;\">, to automate the data and streamline your process<\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Begin preparation of state modification workpapers<\/b><span style=\"mso-spacerun: yes;\">\u00a0 <\/span><\/li>\n<li><!-- [if !supportLists]--><b>If using a <a href=\"https:\/\/gtmtax.com\/tax-insights\/articles\/6-time-saving-tips-to-streamline-state-compliance-season-with-onesource-income-tax-software\/\">tax software, such as ONESOURCE<sup>\u00ae <\/sup>Income Tax Compliance, map state adjustments to their respective lines on each state\u2019s tax return<\/a><\/b><\/li>\n<li><!-- [if !supportLists]--><b>Consider elective filing<\/b> <b>options<\/b> <b>such as nexus consolidation\/combination<\/b>\n<ul class=\"checklist\">\n<li>Entities filing separate company returns in the same jurisdiction may be able to reduce their liabilities by utilizing losses from affiliates to reduce consolidated taxable income or simply by \u201cwatering down\u201d the apportionment percentage<\/li>\n<\/ul>\n<\/li>\n<li><b>Gather data for state tax credits<\/b>\n<ul class=\"checklist\">\n<li>This is also a good time to identify potential opportunities for new credits as well as expanding on existing credit positions<\/li>\n<\/ul>\n<\/li>\n<li><!-- [if !supportLists]--><b><\/b><b><\/b><b><\/b><b><\/b><b>Calculate and file state income tax extensions<\/b><\/li>\n<\/ul>\n<ul class=\"checklist\">\n<li><b style=\"text-align: justify; text-indent: -0.25in;\">Submit Q1 and Q2 estimates<\/b>\n<ul class=\"checklist\">\n<li>Q1 estimates are generally due on the 15<sup style=\"text-align: justify; text-indent: -0.25in;\">th<\/sup><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"> day of the fourth month<\/span><\/span><\/li>\n<li>Q2 estimates are generally due on the 15<sup style=\"text-align: justify; text-indent: -0.25in;\">th<\/sup><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"> day of the sixth month<\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Prepare and file state extensions<\/b>\n<ul class=\"checklist\">\n<li>Most state extensions are due on the 15<sup style=\"text-align: justify; text-indent: -0.25in;\">th<\/sup><span style=\"text-align: justify; text-indent: -0.25in;\"> day of the fourth month following the close of the taxable year<\/span><\/li>\n<\/ul>\n<\/li>\n<\/ul>\n<h2>Q3 State Tax Compliance Tasks<\/h2>\n<p>Be sure to address these activities in Q3:<\/p>\n<ul class=\"checklist\">\n<li><!-- [if !supportLists]--><b>Submit Q3 estimates <span style=\"mso-tab-count: 1;\">\u00a0 \u00a0 <\/span><\/b>\n<ul class=\"checklist\">\n<li>Q3 estimates are generally due on the 15<sup style=\"text-align: justify; text-indent: -0.25in;\">th<\/sup><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"> day of the ninth month<\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li><b>Tie-out state apportionment for sales, property, and payroll<\/b> to the federal return or trial balance, and upload it to your <a href=\"https:\/\/gtmtax.com\/tax-insights\/articles\/6-time-saving-tips-to-streamline-state-compliance-season-with-onesource-income-tax-software\/\">tax compliance software such as ONESOURCE<\/a><\/li>\n<li><strong>Continue to<\/strong><b> prepare state workpapers<\/b> for adjustments and\/or modifications to the federal taxable income<\/li>\n<li><!-- [if !supportLists]--><b>Update payments\/overpayments and tax attributes (i.e., NOLs and tax credits)<\/b> resulting from adjustments made by a state through a notice letter or recently closed audit<\/li>\n<\/ul>\n<h2>Q4 State Tax Compliance Tasks<\/h2>\n<p>In Q4, complete the following tasks:<\/p>\n<ul class=\"checklist\">\n<li><!-- [if !supportLists]--><b>Submit Q4 estimates<\/b>\n<ul class=\"checklist\">\n<li>Q4 estimates are generally due on the 15<sup style=\"text-align: justify; text-indent: -0.25in;\">th<\/sup><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"><span style=\"text-align: justify; text-indent: -0.25in;\"> day of the twelfth month<\/span><\/span><\/span><\/span><\/span><\/li>\n<\/ul>\n<\/li>\n<li><!-- [if !supportLists]--><b><\/b><b><\/b><b><\/b><b><\/b><b>Prepare and file state returns<\/b><\/li>\n<li><b>Incorporate provision to return adjustments<\/b> during or immediately after state filings to avoid errors\/large discrepancies<\/li>\n<li><b style=\"text-align: justify; text-indent: -0.25in;\">Review workpaper documentation <\/b><span style=\"text-align: justify; text-indent: -0.25in;\">to make sure it is complete, ties to the filed tax returns, and is adequate to be considered \u201caudit-ready\u201d<\/span><\/li>\n<\/ul>\n<p class=\"MsoNormal\" style=\"text-align: justify;\"><span style=\"mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin;\">GTM can help you navigate this process. <span style=\"color: black; mso-color-alt: windowtext; background: white;\">To learn more about GTM\u2019s\u00a0<\/span><\/span><a href=\"https:\/\/gtmtax.com\/corporate-tax-services\/income-tax-compliance\/\"><span style=\"mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; background: white;\">State &amp; Local Tax services\u00a0<\/span><\/a><span style=\"mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; color: black; mso-color-alt: windowtext; background: white;\">or to speak with someone who can guide you,<\/span><span style=\"mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; color: #545759; background: white;\">\u00a0<\/span><a href=\"https:\/\/gtmtax.com\/contact\/\"><span style=\"mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; color: #489ed7; background: white;\">contact us<\/span><\/a><span style=\"mso-bidi-font-family: Calibri; mso-bidi-theme-font: minor-latin; color: #545759; background: white;\">.<\/span><\/p>\n\n    <\/div>\n<\/div><\/div>","protected":false},"template":"","meta":{"_acf_changed":false},"class_list":["post-2025","insight","type-insight","status-publish","hentry"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.8 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>State Tax Compliance Checklist - GTM Tax<\/title>\n<meta name=\"description\" content=\"GTM\u2019s Managing Director Chau Tran shares State Tax Compliance housekeeping items to keep in mind, including when you should perform each task.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"State Tax Compliance Checklist - GTM Tax\" \/>\n<meta property=\"og:description\" content=\"GTM\u2019s Managing Director Chau Tran shares State Tax Compliance housekeeping items to keep in mind, including when you should perform each task.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/\" \/>\n<meta property=\"og:site_name\" content=\"GTM Tax\" \/>\n<meta property=\"article:modified_time\" content=\"2025-07-23T20:03:06+00:00\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/\",\"url\":\"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/\",\"name\":\"State Tax Compliance Checklist - GTM Tax\",\"isPartOf\":{\"@id\":\"https:\/\/gtmtax.com\/#website\"},\"datePublished\":\"2022-04-27T17:14:36+00:00\",\"dateModified\":\"2025-07-23T20:03:06+00:00\",\"description\":\"GTM\u2019s Managing Director Chau Tran shares State Tax Compliance housekeeping items to keep in mind, including when you should perform each task.\",\"breadcrumb\":{\"@id\":\"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/gtmtax.com\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"State Tax Compliance Checklist\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/gtmtax.com\/#website\",\"url\":\"https:\/\/gtmtax.com\/\",\"name\":\"GTM Tax\",\"description\":\"\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/gtmtax.com\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"State Tax Compliance Checklist - GTM Tax","description":"GTM\u2019s Managing Director Chau Tran shares State Tax Compliance housekeeping items to keep in mind, including when you should perform each task.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/","og_locale":"en_US","og_type":"article","og_title":"State Tax Compliance Checklist - GTM Tax","og_description":"GTM\u2019s Managing Director Chau Tran shares State Tax Compliance housekeeping items to keep in mind, including when you should perform each task.","og_url":"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/","og_site_name":"GTM Tax","article_modified_time":"2025-07-23T20:03:06+00:00","twitter_card":"summary_large_image","schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/","url":"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/","name":"State Tax Compliance Checklist - GTM Tax","isPartOf":{"@id":"https:\/\/gtmtax.com\/#website"},"datePublished":"2022-04-27T17:14:36+00:00","dateModified":"2025-07-23T20:03:06+00:00","description":"GTM\u2019s Managing Director Chau Tran shares State Tax Compliance housekeeping items to keep in mind, including when you should perform each task.","breadcrumb":{"@id":"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/gtmtax.com\/insight\/state-tax-compliance-checklist\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/gtmtax.com\/"},{"@type":"ListItem","position":2,"name":"State Tax Compliance Checklist"}]},{"@type":"WebSite","@id":"https:\/\/gtmtax.com\/#website","url":"https:\/\/gtmtax.com\/","name":"GTM Tax","description":"","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/gtmtax.com\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"}]}},"_links":{"self":[{"href":"https:\/\/gtmtax.com\/wp-json\/wp\/v2\/insight\/2025","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/gtmtax.com\/wp-json\/wp\/v2\/insight"}],"about":[{"href":"https:\/\/gtmtax.com\/wp-json\/wp\/v2\/types\/insight"}],"wp:attachment":[{"href":"https:\/\/gtmtax.com\/wp-json\/wp\/v2\/media?parent=2025"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}