Jon Wellington, J.D., State and Local Tax Principal

Jon Wellington is a licensed attorney that has spent nearly 20 years serving the public. Specializing in matters unique to state and local taxation (“SALT”), Jon is the leader of the firm’s SALT practice. Drawing on experience working with some of the largest accounting firms in the world, Jon’s expertise in SALT matters includes audit defense, income and franchise tax planning, sales and use consulting, nexus studies, and property tax minimization. Jon is exceptionally well-versed in the SALT needs for clients in the construction, manufacturing/distribution, and not-for-profit sectors.

Recent Posts

Pros and cons on joint ventures

Joint ventures offer several potential advantages. They enable smaller construction companies to take on large projects while dividing the contractual and financial risks of such projects. Further, those projects could be in geographic locations that you otherwise would not be able to access. A joint venture can also enable you to increase your bonding capacity, provide an opportunity to learn about more sophisticated technologies, and access other contractors’ relationships.

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Topics: Real Estate, Accounting Tips, Tax, Construction

Buyer Beware – Avoid unexpected tax liability when buying assets from another business

Many business owners know that when they acquire another business entity that they will be assuming any potential tax liabilities of the acquired business, known as, “successor liability.”  But Texas laws also allow for successor liability even if you purchase some — but not all — of another company’s assets.  It is therefore important to make sure that you are aware of these laws, and how to avoid the most common pitfalls.

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Topics: Accounting Tips, Tax

Warning about state laws for NFPs

Not-for-profit organizations (“NFPs”) may not realize that operating outside their home state may create regulatory and tax compliance responsibilities. States have a vested interest in making sure that NFPs are operating for their intended charitable purposes, and are not fraudulently soliciting its residents for donations.

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Topics: Accounting Tips, Not-for-Profit, Tax

Nexus Issues in the Manufacturing and Distribution Industry

In the wake of the recession, states and municipalities are seeking to boost revenue by prioritizing the collection of taxes from out-of-state companies. Some states have even created new departments devoted exclusively to finding out-of-state companies that should be paying taxes but are not. For example, the Texas Comptroller’s Office has a department focused on such companies, known as the Business Activity Research Team, or “BART.” States are also taking advantage of cross-border agreements with other states’ departments of revenue to share information and are collaborating with federal customs agents. While it may be difficult to determine whether your activity in other states triggers a tax liability (i.e., if you have “nexus”), ignorance is no defense and the penalties for noncompliance can be steep, making this a critical issue for small businesses.

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Topics: Manufacturing & Distribution

Upcoming Sales Tax Holiday for Emergency Preparation Supplies

The Texas Comptroller's Office is offering taxpayers a sales tax holiday between 12:01 A.M. on Saturday, April 23, and midnight on Monday, April 25, for purchases of certain emergency preparation supplies. During the sales tax holiday, those items may be purchased tax-free without limit and with no need for an exemption certificate.

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Topics: Accounting Tips

Are You Aware Of Your State and Local Tax Liabilities?

Does your company operate in multiple states? If so, you may owe state and local taxes to some of those states, even if you do not realize it. While it may be difficult to determine whether your activity in other states triggers a tax liability, ignorance is no defense, and the penalties for noncompliance can be steep, making this a critical issue for small businesses.

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Topics: Manufacturing & Distribution, Accounting Tips

States Offering Tax Amnesty Programs In 2015

Eight states have begun or are about to begin amnesty programs. Amnesty programs offer taxpayers the opportunity to report and pay delinquent tax liabilities they may owe to the state. While these programs vary from state to state, they generally allow for the waiver of penalties, reduction of some or all of the interest that would otherwise be due and limit the lookback period to three or four years. These programs are open to taxpayers who have not previously filed with the state or who have otherwise been contacted by the taxing authorities.

The following list identifies the eight states offering an amnesty program in 2015, the amnesty period duration and the percentage of penalties and interest that would be waived:
1. Arizona: 9/1/2015 – 10/31/2015 (100% penalty/100% interest)
2. Indiana: 9/1/2015 – 11/16/2015 (100% penalty/100% interest)
3. Kansas: 9/1/2015 – 10/15/2015 (100% penalty/100% interest)
4. Louisiana: To be determined but before the end of 2015 (33% penalty/17% interest)
5. Maryland: 9/1/2015 – 10/30/2015 (100% penalty/50% interest)
6. Missouri: 9/1/2015 – 11/30/2015 (100% penalty/100% interest)
7. Oklahoma: 9/14/2015 – 11/13/2015 (100% penalty/100% interest)
8. South Carolina: TBD
Taxpayers should be careful before moving forward with an amnesty request. On one hand, these programs generally only last for a few months so it is important to act quickly. Some states will even impose greater penalties on taxpayers who fail to take advantage of their amnesty program. On the other hand, states typically require full payment of any amount due, so taxpayers should consider whether they can afford to make such potential payments (some states offer installment payment plans). Similar relief may be available under a voluntary disclosure agreement, minimizing the benefit of an amnesty program.
Under the right circumstances, amnesty programs offer great benefits to taxpayers who have not previously been in proper compliance. Please contact Jon Wellington at LGT for more details at (214) 461-1430 or

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Topics: Accounting Tips, Tax

Texas Franchise Tax Opportunity for Companies Performing Installation Services

A recent court decision could allow auto dealers and other taxpayers who perform installation services to increase their cost of goods sold deduction (“COGS Deduction”) for Texas franchise tax purposes, thereby reducing their future franchise tax liability and also presenting a refund opportunity.

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Topics: Auto, Accounting Tips, Tax

Saving Tax Dollars With A Reverse Audit

If you have not paid all of your Texas sales and use taxes, chances are, the Comptroller’s Office will let you know about it. However, when you pay too much sales and use tax, no one is going to tell you. To identify overpayments and seek reimbursements, companies should consider conducting a “reverse audit,” whereby it audits its own records looking for overpayments of sales and use taxes.

Take Advantage of Tax Exemptions
While many companies have sales and use tax compliance systems in place to prevent overpayment of sales and use tax, such systems need to be frequently reviewed to ensure that they are working properly. Business expansion or downsizing, employee turnover, or even just human error can compromise the safeguards you have in place, resulting in overpaying sales and use tax.
The majority of overpayments come from unclaimed tax exemptions. With a combined sales tax rate in Texas typically exceeding 8%, it can be well worth your time to ensure that you are claiming all of the exemptions that you are entitled to receive. For example, manufacturers are exempt from sales tax imposed on their manufacturing equipment and related replacement parts and utilities. Beginning in 2014, Texas also offers an exemption for certain research and development expenditures.

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Topics: Accounting Tips, Tax, Audit, Construction

Texas Deadline Reminders on Sales Tax Returns & Reports

1. All Texas 2014 state, local city, county and special purpose sales/use reports, including monthly, quarterly and annual reports, for month or year-end December 31, 2014 must be mailed and post marked on or before January 20, 2015.

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Topics: Real Estate, Accounting Tips, Tax