Heather M. Field (UC-Hastings) presents Binding Choices: Tax Elections & Federal/State Conformity at NYU today as part of its Colloquium Series on Tax Policy and Public Finance convened by Daniel Shaviro (NYU):

Most states’ income tax laws conform, at least to some degree, to the federal income tax laws. The literature discussing the advantages and disadvantages of state conformity to federal tax law generally assumes that the question facing state governments is to what extent (if at all) the state income tax provisions should conform to the federal income tax provisions. However, where the federal income tax law provides explicit tax elections, state legislators must decide not only whether the state law should conform to the federal law (i.e., whether the taxpayers should be afforded the same tax choice for state tax purposes), but legislators must also decide whether to bind each taxpayer, for state tax purposes, to the taxpayer’s federal tax choices. This additional decision matters because the simplicity, administrability, revenue, and federalism implications of election conformity can depend on whether and how state legislators constrain the taxpayer autonomy provided by the elections. Thus, given the large and ever-increasing number of tax elections in the federal income tax law, this Article provides guidance about how state legislators considering conformity should take into account the optionality inherent in explicit elections.