Bruce Johnson – Senior Vice President, Tax Policy. Mr. Johnson has over forty-five years of experience in federal, state, and local tax law and policy. He began his tax career as a Certified Public Accountant in Utah, later joining the U. S. Department of Justice Tax Division, where he litigated tax cases in appellate courts across the country. He then joined a large regional law firm where he advised clients on state and local tax issues, handling administrative and judicial appeals in most of the western states.
Mr. Johnson was appointed to serve as a commissioner of the Utah State in 1998, where he served for 16 years. He was named Chair of the Commission in 2009. He is a past chair of the Multistate Tax Commission and a past President of the Federation of Tax Administrators. He was the founding national Co-chair of the Streamlined Sales Tax Implementing States and has served on the Executive Committee of the Governing Board.
He is a past chair of the American Bar Association Tax Section State and Local Tax Committee and a former Board Member of the National Tax Association. He speaks and writes frequently on state and local tax issues and has testified before Congress, President Bush’s Panel on Tax Reform, and legislative committees in several states.
He is the recipient of several awards, including the Wade Anderson Memorial Medal for Leadership in Interstate Tax Cooperation, the Franklin C. Latcham Award for Distinguished Service in State and Local Taxation, and a Lifetime Achievement Award from the Utah Taxpayers Association. Mr. Johnson is a fellow of the American College of Tax Counsel.
He graduated from the University of Utah with a Bachelor of Arts degree, cum laude, in Accounting, and received his Juris Doctorate, magna cum laude, from the J. Reuben Clark Law School at Brigham Young University, where he was named a J. Reuben Clark Scholar.
Russ: Bruce, It’s nice to be able to talk with you about your career and your role at TaxCloud. Few people can claim the kind of depth of experience and leadership in both private practice and public administration that you can.
Let’s start with your role at TaxCloud. What are the major things you work on at TaxCloud? Who do you interact with, how do you provide advice? How is this different from other roles you have played? What do you find gratifying about the work?
Bruce: My title is Vice President, Government Affairs, but I believe I am one of several people with the same title, including yourself. In that role, we try to ensure that the policies and procedures that state legislatures and state tax administrators adopt are sound from a policy standpoint and practical from an implementation standpoint. Even sound policies can be implemented in ways that are difficult or even unworkable for taxpayers. In those cases, we try to help policy makers understand how they can achieve their goals with as little cost and disruption to taxpayers as possible. In that role, I primarily provide input on behalf of our merchants at the national level, that is, with the Streamlined Sales Tax Governing Board, the Multistate Tax Commission, and the Federation of Tax Administration, but we also meet with state tax administrators on particular issues.
Others in the Government Affairs Team, especially Jerry Johnson, Gary Centlivre, and our newest member, Dave Steines, handle audit response issues.
As a lawyer with 45 years of experience in interpreting and applying tax law, I also advise our TaxCloud team on the application of various state (and sometimes local) statutes, ordinances, and regulations. Although we do not provide legal advice to our clients, I work closely with our Customer Success agents in their efforts to support our merchants and respond to their concerns.
Russ: I want to list some of your leadership roles below and ask you to talk about what you value most in each organization and what you gained in each role.
Partner in the Holme Roberts & Owen law firm
Bruce: It was at Holme Roberts that I was first exposed to multistate tax practice. (I had done state compliance work for clients, including responding to sales tax audits, even as an undergraduate.) I learned first hand that most taxpayers want to comply with the law, but it can be costly to do so. Keeping track of different state requirements is burdensome. Moreover, many of my clients did business in Colorado and they would be faced with various, and sometimes conflicting, demands by various local entities.
The work was very gratifying because we tried not to undertake representation if we did not believe we could save our clients more in taxes than we charged in legal fees. We were almost always successful in that regard. It was sometimes frustrating because our fees were fairly high and some taxpayers who needed help simply could not afford us. We did do a significant amount of pro bono work (that is, volunteer work without charge), but it was primarily for individual taxpayers rather than businesses.
Russ: Chair of the American Bar Association Tax Section Committee on State and Local Taxes
Bruce: This work was both enjoyable and educational because the Committee, nicknamed the SALT Committee, was comprised of leading state tax professionals from around the country. We had cutting edge continuing legal education from the best and the brightest. It was also interesting to find that many of the issues that were being raised in the Rocky Mountain states were also hot issues in other parts of the country. One of the highlights of our meetings was an unscripted breakfast roundtable where any committee member could raise an issue and get the benefit of the insights and experiences of the other members. As a result of my ABA work, I have close relationships with leading state tax lawyers in virtually every state.
The ABA, of course, represents both public and private sector lawyers and we made a valiant attempt to recruit more public sector lawyers, but we had limited success. One of our most faithful members was from the South Carolina Department of Revenue, but other than that, I was the only regular attender from the public sector. I had been a member for several years before my appointment to the Tax Commission and actually became Chair of the Committee just after my appointment.
Russ: Commissioner and Chair of the Utah State Tax Commission
Bruce: There are four commissioners, each of whom is appointed by the Governor and confirmed by the Senate four a four-year terms. I was privileged to be appointed by Governor Leavitt, and reappointed three times by his successors. Although appointed by the Governor, we are an independent constitutional body, given the power and responsibility to administer and enforce all of the tax laws of the state.
We are also a quasi-judicial body, meaning that we hold hearings and hear appeals on property tax cases, and disputed substantive tax audits, most relevant here, being sales tax audits. We also worked closely with the Governor and the Legislature. Although we did not see ourselves as a policy-making body, we did have a valuable role in advising policy makers and helping them adopt wise policies in ways that minimized the burdens on the taxpayers.
I had always had great respect for the Tax Commission as a private practitioner, but I accepted the appointment primarily because I felt the need for more substantive tax expertise at the top level of the agency. As a Commissioner, and later as Chair, I felt I could bring some independent judgment and experience to bear. We had, and I continue to have, great respect for the Auditing Division, but we were definitely not a rubber stamp.
As a Commissioner I also saw first hand that most taxpayers want to pay their fair share. But they want to do it with a minimum of cost and effort—their first priority has to be the success of their business. I think we were able to help them in that regard. Their second concern is that their hard-earned tax dollars be spent wisely. That, for better or worse, was beyond our control.
Russ: Chair, Federation of Tax Administrators
Bruce: The FTA is comprised of every state tax department, many City tax agencies, and, I believe, at least once Canadian province. Much of their work involved the nuts and bolts of tax administration, especially electronic filing and relations with the IRS. Although successful coordination among the agencies greatly facilitates compliance for taxpayers, there was relatively little “tax policy.” It was, however, a good opportunity to establish relationships with a broad range of state tax personnel. In fact, I was able to renew many of the acquaintances at the annual Past President’s Luncheon this June.
The exception was federal legislation. During my term as president, I had the opportunity to address President Bush’s Council on Tax Reform and to give testimony on state tax issues to various Congressional committees. My theme was consistent—how to preserve state sovereignty while minimizing the burdens and expenses on taxpayers.
Russ: Chair, Multistate Tax Commission
Bruce: The MTC is another organization of state tax departments. Its full membership is narrower than that of the FTA and it involves itself more with substantive state tax matters. One of its primary purposes is to increase uniformity among various tax systems by proposing uniform statutes and regulations. (Their adoption, of course, is left to the individual states.) They also conduct multistate tax audits of various taxpayers and, of particular importance to many taxpayers in the wake of Wayfair, they administer a nationwide voluntary disclosure program to help taxpayers come into compliance.
I was privileged to be chair of the MTC during a rather pivotal time. Dan Bucks, the longtime Executive Director, was leaving the MTC to become head of the Montana Department of Revenue. Thus, I was instrumental in the selection of a new Executive Director. We were also able to reaffirm, and strengthen, our working relationships with taxpayers, both individually and through groups such as TEI and COST. We also made our meetings more accessible remotely, long before COVID, to allow taxpayer input without the cost of attending a meeting in person.
In my experience, top tax administrators are almost always hard-working, capable people who want to be fair. Some of them have deep substantive tax expertise. Many of them, however, do not. The MTC staff, of course, has a wealth of such expertise. Nevertheless, I believe my experience in the private sector was valuable in guiding many MTC initiatives in the right direction. I continue to believe that more uniformity among the states would lower costs for taxpayers and ease both compliance and administrative burdens nationwide.
Russ: Co-chair, Streamlined Sales Tax Implementing States
This was, for a state tax person, the opportunity of a lifetime.The Implementing States were a group of states formed in 2000 that declared their willingness, either through legislation or formal executive order, to participate in a nationwide effort to simplify sales and use tax and to ensure that the tax was “viable” for the 21st Century. I was privileged to be the Co-chair from the executive branch of the participating states, serving alongside various other co-chairs from the legislatures of those states, including Rep. Matt Kisber of Tennessee, Senator Angela Munsonof Oklahoma, and Delegate Sheila Hixson of Maryland. Over the next 10 years we met regularly to hammer out the details of what would later become the Streamlined Sales and Use Tax Agreement, currently in effect in 24 states.
The SSUTA would never have become a reality without the solid support of visionary leaders from the business community, the state legislatures, local governments—whose participation and cooperation was critical, and many state tax officials. As Co-chair, I took particular pride in ensuring that all voices were heard and all views were respected, even if not ultimately adopted.
Russ: I don’t think very many people know about the tri-state project of Utah, Washington, and Idaho (what was the name of that?) What was your charter? How did you do the work? What were the successes, and how did it pave the way for tax simplification at the national level?
Bruce: In 1998, Utah Governor Mike Leavitt addressed the MTC regarding the future of the sales tax. Internet retailing was in its infancy, but was projected to explode over the next few years. The Governor did not believe the tax, an important revenue source for almost all state and local governments, would be viable if there was not a level playing field. Main Street businesses, who had a sales tax collection burden, would not be able to fairly compete with remote retailers who, under then existing law, had no such burden. Accordingly, the Governor challenged the states to radically simplify their taxes and reduce the burden on multistate retailers to the point that they would be willing to collect the tax and level the playing field.
Utah, Idaho, and Washington took him up on the challenge and, over the next couple of years, working closely with retailers, the three states came up with proposals and strategies to simplify the tax, many of which ultimately found their way into the SSUTA. The main lesson that came out of the project was the futility of state tax administrators trying to figure out what was good for taxpayers. We had to have them at the table to solve their problems, not problems administrators thought they might have.
The answer is probably clear by now. Most taxpayers want to comply, but tax collection is difficult, confusing, and can be expensive. It takes away from the taxpayers time and resources that can be better use in growing the business and serving their customers. It is incumbent on the government, at all levels, to attempt to minimize the costs of compliance, while collecting necessary revenues, so we can all enjoy the benefits of a “civilized society.” [Oliver Wendell Holmes.]
Russ: You have been a leader of tax administrators at the state and national level. What do you want our readers to know about tax administrators, both at the Commissioner level and at the staff level.
Bruce: Tax administrators are a large and diverse group. I have never met one who is not seeking to do a good job, but some certainly have a broader “vision” than others. Similarly, some are much better communicators than others. I would encourage all taxpayers to recognize this and attempt to develop good professional relations with the government personnel with whom they work.
Taxpayers also need to remember that they know far more about their business that the auditor ever will. Taxpayers need to be prepared to spend some time educating the tax collectors, on both their own operations and the effect on their business of government policies and procedures.
Both sides should recognize that there will be disagreements, sometimes very significant ones. But they should be good-faith disagreements based on principled analysis of the issues—not based on animus or miscommunication.
Russ: The Streamlined Implementing States faced a lot of complicated and politically difficult issues to resolve. What were the greatest successes in that regard.
Bruce: I think the most significant tangible accomplishments were, not necessarily in order, the requirement of a single state-wide level of tax administration for each state, the requirement of uniformity between the state and local tax bases in each state (both thanks to the local governments), the requirement of various state-provided databases to assist businesses, and the creation, certification and state compensation of certified service providers, such as TaxCloud, who can reduce the cost of compliance for businesses while drastically reducing their exposure to unforeseen tax liabilities.
The most significant intangible accomplishments is an increased awareness among both taxpayers and tax collectors that we are engaged in a cooperative exercise and we will both benefit more from cooperation than confrontation.