Category: Company and Industry News

A couple of weeks ago, we commented on California Assembly Bill 2640, noting that while the state’s revenue generation goals are perfectly valid, this particular proposal would be counterproductive in a number of important ways. The Federation of Exchange Accommodators has now weighed in officially, sending a letter detailing its concerns to Assemblyman Juan Arambula, who sponsored the bill. The letter is signed by Brent Abrahm (Director, President-elect & Co-Chair of the State Legislative Committee) and Suzanne Goldstein Baker (Director & Chair, Federal Legislative Committee).
In addition, the letter is co-signed by representatives of several important industry groups, including the Equipment Leasing and Finance Association, the National Association of Equipment Leasing Brokers, Associated Equipment Distributors and the National Equipment Finance Association.
The text of the letter follows.

March 10, 2010 Assemblymember Juan Arambula State Capitol P.O. Box 942849 Sacramento, CA 94249-0031 RE: AB 2640
 
Dear Assemblymember Arambula:
We are writing to you on behalf of the Federation of Exchange Accommodators (“FEA”), the trade association for IRC §1031 exchange facilitators, to voice our opposition to AB 2640 and to specifically request that you drop Sec. 3 which would add new section 18036.7 to the Revenue and Taxation Code (“RTC”) and Sec. 15, which would amend RTC Section 24941. The Equipment Leasing & Finance Association (“ELFA”), the National Association of Equipment Leasing Brokers (“NAELB”), the Associated Equipment Distributors (“AED”), and National Equipment Finance Association (“NEFA”) join this request as representatives of financial services companies, manufacturers and brokers in the $600 billion equipment finance sector. With many of the largest financial services companies and manufacturers, regional and community banks and finance companies, ELFA, NAELB, AED and NEFA lend support to the FEA in stressing that Sections 3 and 15 of the bill would deny existing tax incentives for like-kind exchanges which currently promote upgrades and replacement of machinery, equipment, railcars, aircraft and vehicles as well as real estate transactions.
Federal tax law under IRC §1031 permits a taxpayer to exchange business-use or investment assets for other like-kind business use or investment assets without recognizing taxable gain on the sale of the old assets. The taxes which would have otherwise been due from the sale are thus deferred. Most §1031 exchanges involve separate buyers and sellers. Under these circumstances, tax rules require the use of an exchange facilitator (called a Qualified Intermediary or Exchange Accommodation Titleholder). The exchange facilitator holds the sale proceeds (“exchange funds”) for the benefit of the taxpayer during the exchange, disbursing funds for purchase of replacement property, and returning any unused funds to the taxpayer at the end of the exchange. Taxpayers recognize gain and pay tax on any unused funds.
The FEA, whose members range from privately owned small businesses to affiliates of publicly traded title insurance companies and banks, actively worked with Senator Machado in 2008 to pass SB1007 which added Division 20.5, Sec. 51000 et seq to the Financial Code, to regulate exchange facilitators. This recent legislative activity indicates a belief on the part of the California legislature that IRC §1031 provides a valuable benefit to the California economy, and that exchange facilitators provide a necessary and valuable service to California taxpayers.
§1031 exchanges provide an important economic stimulus to taxpayers of modest means as well as the wealthy, from individuals to large corporations. Owners of real estate are encouraged by the tax benefits to reinvest in real estate, rather than place their money in other investments. Likewise, §1031 gives businesses a tax incentive to replace and upgrade machinery and equipment. If AB2640 is passed in its current form, it will most certainly have a chilling effect upon California real estate transactions and other business transactions, including exchanges of machinery, equipment and leased assets. These tax exemptions serve to stimulate the economy, encouraging purchases and sales, encouraging companies to upgrade and replace machinery, equipment, railcars, aircraft, trucks and other vehicles sooner, because tax on the gain can be deferred. Without the exemptions, many transactions will be put off, and real estate values in California will be further eroded. Fewer transactions also translate into fewer jobs in the §1031 exchange industry, and in the real estate, title insurance, equipment lease financing, mortgage and other related industries, including manufacturing. The effect of the bill will also discourage business activity in California and result in fewer deposits in California banks.
Notwithstanding California’s desperate need for revenue, the overall effect of HB2640 bill will be an unintended, unwanted economic de-stimulant to the California economy, at a time when it can least afford more job losses and economic stagnation.
We would be pleased to answer any questions you may have. Our contact information appears below.
Sincerely,
Brent Abrahm Director, President-elect & Co-Chair State Legislative Committee Federation of Exchange Accommodators Phone: (303) 865-7301 Email: brenta@accruit.com
Suzanne Goldstein Baker Director & Chair, Federal Legislative Committee Federation of Exchange Accommodators Phone: (312) 223-3003 Email: suzanne.baker@ipx1031.com
WE SUPPORT THE ABOVE COMMENTS OF THE FEA:
Dennis Brown Vice President State Government Relations Equipment Leasing and Finance Association 1825 K Street NW, Suite 900 Washington, DC 20006 (202) 238-3411 Email: dbrown@elfaonline.org www.elfaonline.org

A couple of weeks ago, we commented on California Assembly Bill 2640, noting that while the state’s revenue generation goals are perfectly valid, this particular proposal would be counterproductive in a number of important ways. The Federation of Exchange Accommodators has now weighed in officially, sending a letter detailing its concerns to Assemblyman Juan Arambula, who sponsored the bill. The letter is signed by Brent Abrahm (Director, President-elect & Co-Chair of the State Legislative Committee) and Suzanne Goldstein Baker (Director & Chair, Federal Legislative Committee).
In addition, the letter is co-signed by representatives of several important industry groups, including the Equipment Leasing and Finance Association, the National Association of Equipment Leasing Brokers, Associated Equipment Distributors and the National Equipment Finance Association.
The text of the letter follows.

March 10, 2010 Assemblymember Juan Arambula State Capitol P.O. Box 942849 Sacramento, CA 94249-0031 RE: AB 2640
 
Dear Assemblymember Arambula:
We are writing to you on behalf of the Federation of Exchange Accommodators (“FEA”), the trade association for IRC §1031 exchange facilitators, to voice our opposition to AB 2640 and to specifically request that you drop Sec. 3 which would add new section 18036.7 to the Revenue and Taxation Code (“RTC”) and Sec. 15, which would amend RTC Section 24941. The Equipment Leasing & Finance Association (“ELFA”), the National Association of Equipment Leasing Brokers (“NAELB”), the Associated Equipment Distributors (“AED”), and National Equipment Finance Association (“NEFA”) join this request as representatives of financial services companies, manufacturers and brokers in the $600 billion equipment finance sector. With many of the largest financial services companies and manufacturers, regional and community banks and finance companies, ELFA, NAELB, AED and NEFA lend support to the FEA in stressing that Sections 3 and 15 of the bill would deny existing tax incentives for like-kind exchanges which currently promote upgrades and replacement of machinery, equipment, railcars, aircraft and vehicles as well as real estate transactions.
Federal tax law under IRC §1031 permits a taxpayer to exchange business-use or investment assets for other like-kind business use or investment assets without recognizing taxable gain on the sale of the old assets. The taxes which would have otherwise been due from the sale are thus deferred. Most §1031 exchanges involve separate buyers and sellers. Under these circumstances, tax rules require the use of an exchange facilitator (called a Qualified Intermediary or Exchange Accommodation Titleholder). The exchange facilitator holds the sale proceeds (“exchange funds”) for the benefit of the taxpayer during the exchange, disbursing funds for purchase of replacement property, and returning any unused funds to the taxpayer at the end of the exchange. Taxpayers recognize gain and pay tax on any unused funds.
The FEA, whose members range from privately owned small businesses to affiliates of publicly traded title insurance companies and banks, actively worked with Senator Machado in 2008 to pass SB1007 which added Division 20.5, Sec. 51000 et seq to the Financial Code, to regulate exchange facilitators. This recent legislative activity indicates a belief on the part of the California legislature that IRC §1031 provides a valuable benefit to the California economy, and that exchange facilitators provide a necessary and valuable service to California taxpayers.
§1031 exchanges provide an important economic stimulus to taxpayers of modest means as well as the wealthy, from individuals to large corporations. Owners of real estate are encouraged by the tax benefits to reinvest in real estate, rather than place their money in other investments. Likewise, §1031 gives businesses a tax incentive to replace and upgrade machinery and equipment. If AB2640 is passed in its current form, it will most certainly have a chilling effect upon California real estate transactions and other business transactions, including exchanges of machinery, equipment and leased assets. These tax exemptions serve to stimulate the economy, encouraging purchases and sales, encouraging companies to upgrade and replace machinery, equipment, railcars, aircraft, trucks and other vehicles sooner, because tax on the gain can be deferred. Without the exemptions, many transactions will be put off, and real estate values in California will be further eroded. Fewer transactions also translate into fewer jobs in the §1031 exchange industry, and in the real estate, title insurance, equipment lease financing, mortgage and other related industries, including manufacturing. The effect of the bill will also discourage business activity in California and result in fewer deposits in California banks.
Notwithstanding California’s desperate need for revenue, the overall effect of HB2640 bill will be an unintended, unwanted economic de-stimulant to the California economy, at a time when it can least afford more job losses and economic stagnation.
We would be pleased to answer any questions you may have. Our contact information appears below.
Sincerely,
Brent Abrahm Director, President-elect & Co-Chair State Legislative Committee Federation of Exchange Accommodators Phone: (303) 865-7301 Email: brenta@accruit.com
Suzanne Goldstein Baker Director & Chair, Federal Legislative Committee Federation of Exchange Accommodators Phone: (312) 223-3003 Email: suzanne.baker@ipx1031.com
WE SUPPORT THE ABOVE COMMENTS OF THE FEA:
Dennis Brown Vice President State Government Relations Equipment Leasing and Finance Association 1825 K Street NW, Suite 900 Washington, DC 20006 (202) 238-3411 Email: dbrown@elfaonline.org www.elfaonline.org

A couple of weeks ago, we commented on California Assembly Bill 2640, noting that while the state’s revenue generation goals are perfectly valid, this particular proposal would be counterproductive in a number of important ways. The Federation of Exchange Accommodators has now weighed in officially, sending a letter detailing its concerns to Assemblyman Juan Arambula, who sponsored the bill. The letter is signed by Brent Abrahm (Director, President-elect & Co-Chair of the State Legislative Committee) and Suzanne Goldstein Baker (Director & Chair, Federal Legislative Committee).
In addition, the letter is co-signed by representatives of several important industry groups, including the Equipment Leasing and Finance Association, the National Association of Equipment Leasing Brokers, Associated Equipment Distributors and the National Equipment Finance Association.
The text of the letter follows.

March 10, 2010 Assemblymember Juan Arambula State Capitol P.O. Box 942849 Sacramento, CA 94249-0031 RE: AB 2640
 
Dear Assemblymember Arambula:
We are writing to you on behalf of the Federation of Exchange Accommodators (“FEA”), the trade association for IRC §1031 exchange facilitators, to voice our opposition to AB 2640 and to specifically request that you drop Sec. 3 which would add new section 18036.7 to the Revenue and Taxation Code (“RTC”) and Sec. 15, which would amend RTC Section 24941. The Equipment Leasing & Finance Association (“ELFA”), the National Association of Equipment Leasing Brokers (“NAELB”), the Associated Equipment Distributors (“AED”), and National Equipment Finance Association (“NEFA”) join this request as representatives of financial services companies, manufacturers and brokers in the $600 billion equipment finance sector. With many of the largest financial services companies and manufacturers, regional and community banks and finance companies, ELFA, NAELB, AED and NEFA lend support to the FEA in stressing that Sections 3 and 15 of the bill would deny existing tax incentives for like-kind exchanges which currently promote upgrades and replacement of machinery, equipment, railcars, aircraft and vehicles as well as real estate transactions.
Federal tax law under IRC §1031 permits a taxpayer to exchange business-use or investment assets for other like-kind business use or investment assets without recognizing taxable gain on the sale of the old assets. The taxes which would have otherwise been due from the sale are thus deferred. Most §1031 exchanges involve separate buyers and sellers. Under these circumstances, tax rules require the use of an exchange facilitator (called a Qualified Intermediary or Exchange Accommodation Titleholder). The exchange facilitator holds the sale proceeds (“exchange funds”) for the benefit of the taxpayer during the exchange, disbursing funds for purchase of replacement property, and returning any unused funds to the taxpayer at the end of the exchange. Taxpayers recognize gain and pay tax on any unused funds.
The FEA, whose members range from privately owned small businesses to affiliates of publicly traded title insurance companies and banks, actively worked with Senator Machado in 2008 to pass SB1007 which added Division 20.5, Sec. 51000 et seq to the Financial Code, to regulate exchange facilitators. This recent legislative activity indicates a belief on the part of the California legislature that IRC §1031 provides a valuable benefit to the California economy, and that exchange facilitators provide a necessary and valuable service to California taxpayers.
§1031 exchanges provide an important economic stimulus to taxpayers of modest means as well as the wealthy, from individuals to large corporations. Owners of real estate are encouraged by the tax benefits to reinvest in real estate, rather than place their money in other investments. Likewise, §1031 gives businesses a tax incentive to replace and upgrade machinery and equipment. If AB2640 is passed in its current form, it will most certainly have a chilling effect upon California real estate transactions and other business transactions, including exchanges of machinery, equipment and leased assets. These tax exemptions serve to stimulate the economy, encouraging purchases and sales, encouraging companies to upgrade and replace machinery, equipment, railcars, aircraft, trucks and other vehicles sooner, because tax on the gain can be deferred. Without the exemptions, many transactions will be put off, and real estate values in California will be further eroded. Fewer transactions also translate into fewer jobs in the §1031 exchange industry, and in the real estate, title insurance, equipment lease financing, mortgage and other related industries, including manufacturing. The effect of the bill will also discourage business activity in California and result in fewer deposits in California banks.
Notwithstanding California’s desperate need for revenue, the overall effect of HB2640 bill will be an unintended, unwanted economic de-stimulant to the California economy, at a time when it can least afford more job losses and economic stagnation.
We would be pleased to answer any questions you may have. Our contact information appears below.
Sincerely,
Brent Abrahm Director, President-elect & Co-Chair State Legislative Committee Federation of Exchange Accommodators Phone: (303) 865-7301 Email: brenta@accruit.com
Suzanne Goldstein Baker Director & Chair, Federal Legislative Committee Federation of Exchange Accommodators Phone: (312) 223-3003 Email: suzanne.baker@ipx1031.com
WE SUPPORT THE ABOVE COMMENTS OF THE FEA:
Dennis Brown Vice President State Government Relations Equipment Leasing and Finance Association 1825 K Street NW, Suite 900 Washington, DC 20006 (202) 238-3411 Email: dbrown@elfaonline.org www.elfaonline.org

Legislators in the State of California have introduced a new bill aimed at generating increased tax revenue, but unfortunately this short-sighted effort would sacrifice the state’s long-term economic health for short-term, destabilizing gains.
The proposed law,

Legislators in the State of California have introduced a new bill aimed at generating increased tax revenue, but unfortunately this short-sighted effort would sacrifice the state’s long-term economic health for short-term, destabilizing gains.
The proposed law,

Legislators in the State of California have introduced a new bill aimed at generating increased tax revenue, but unfortunately this short-sighted effort would sacrifice the state’s long-term economic health for short-term, destabilizing gains.
The proposed law,

IconX Energy* is one of the world’s largest energy companies, providing customers around the globe with fuel for their automobiles, electricity for their homes and a wide range of petrochemical products for every phase of their lives. As with any large enterprise, IconX is constantly buying and selling large quantities of assets, and in the process, dealing with the complex tax implications of these activities.
The Problem
IconX had historically employed 1031 like-kind exchanges (LKEs) for real estate and leasehold transactions, but several years ago company executives learned that LKEs could also be used for non-real estate assets – vehicles, production/drilling equipment, even certain types of intangible assets (like mineral rights).
Suspecting that 1031 exchanges might support productive tax and cash flow strategies, the firm contacted Accruit, which it knew had strong roots in the Oil & Gas industry.
The Accruit Solution
Accruit’s Sales and Client Service groups immediately realized that IconX was, indeed, an ideal candidate for a robust corporate asset exchange program. The company was moving hundreds of millions of dollars worth of assets and leaving the deferral benefits to which they were legally entitled on the table. In addition to a significant number of real estate exchanges, IconX – like most O&G businesses in its sector – was buying and selling massive numbers of tangible and intangible assets each year.
Accruit worked with IconX’s tax, procurement and investment recovery groups to implement an ongoing Master Exchange program that would allow the company to keep its cash at work in the business.
The Results
Since launching, IconX has funneled more than $650 million worth of sales through its Accruit LKE program. The relinquished assets have run the gamut of Oil & Gas industry asset types (see list below).
The average combined tax rates on these sales has been roughly 40%, meaning that Accruit has provided IconX with the opportunity to generate a tax benefit of roughly $260 million. That’s better than a quarter of a billion dollars in operating cash flow.
IconX has also derived tremendous asset management value from the Accruit Exchange ManagerTM platform. Asset-level tracking capabilities allow IconX to keep tabs on a huge asset portfolio; audit-ready reporting supports a comprehensive range of internal and external financial requirements; and the combination of advanced, automated technology and one-to-one client service has allowed them to dramatically reduce risk and administrative burden across the entire program. These results testify to the IconX program’s substantial value-added benefits – even in cases where the client doesn’t replace relinquished assets, the Accruit platform (constructed on the only patented 1031 exchange process in the industry) still represents a powerful tool for managing the overall asset portfolio.
Assets in IconX LKE Program

Large and small real estate holdings
Leaseholds
Mineral rights
Tubing, piping and casing
Scrap metal
Vehicles (trucks, trailers and SUVs)
Cranes
Valves
Pumping units
Separators
Compressors and skids
Tanks
Sucker rods
Coalescers
Catalytic heaters
Obsolete wellhead materials
Reboilers
Shipping containers
Articulating bridges
Fencing
Generators
Buildings / living quarter materials
Cantilever beams
Transformers
Tools
Flowlines
Satellite VSAT systems
Centrifuges
…and other assorted equipment

* Based on actual Accruit client

IconX Energy* is one of the world’s largest energy companies, providing customers around the globe with fuel for their automobiles, electricity for their homes and a wide range of petrochemical products for every phase of their lives. As with any large enterprise, IconX is constantly buying and selling large quantities of assets, and in the process, dealing with the complex tax implications of these activities.
The Problem
IconX had historically employed 1031 like-kind exchanges (LKEs) for real estate and leasehold transactions, but several years ago company executives learned that LKEs could also be used for non-real estate assets – vehicles, production/drilling equipment, even certain types of intangible assets (like mineral rights).
Suspecting that 1031 exchanges might support productive tax and cash flow strategies, the firm contacted Accruit, which it knew had strong roots in the Oil & Gas industry.
The Accruit Solution
Accruit’s Sales and Client Service groups immediately realized that IconX was, indeed, an ideal candidate for a robust corporate asset exchange program. The company was moving hundreds of millions of dollars worth of assets and leaving the deferral benefits to which they were legally entitled on the table. In addition to a significant number of real estate exchanges, IconX – like most O&G businesses in its sector – was buying and selling massive numbers of tangible and intangible assets each year.
Accruit worked with IconX’s tax, procurement and investment recovery groups to implement an ongoing Master Exchange program that would allow the company to keep its cash at work in the business.
The Results
Since launching, IconX has funneled more than $650 million worth of sales through its Accruit LKE program. The relinquished assets have run the gamut of Oil & Gas industry asset types (see list below).
The average combined tax rates on these sales has been roughly 40%, meaning that Accruit has provided IconX with the opportunity to generate a tax benefit of roughly $260 million. That’s better than a quarter of a billion dollars in operating cash flow.
IconX has also derived tremendous asset management value from the Accruit Exchange ManagerTM platform. Asset-level tracking capabilities allow IconX to keep tabs on a huge asset portfolio; audit-ready reporting supports a comprehensive range of internal and external financial requirements; and the combination of advanced, automated technology and one-to-one client service has allowed them to dramatically reduce risk and administrative burden across the entire program. These results testify to the IconX program’s substantial value-added benefits – even in cases where the client doesn’t replace relinquished assets, the Accruit platform (constructed on the only patented 1031 exchange process in the industry) still represents a powerful tool for managing the overall asset portfolio.
Assets in IconX LKE Program

Large and small real estate holdings
Leaseholds
Mineral rights
Tubing, piping and casing
Scrap metal
Vehicles (trucks, trailers and SUVs)
Cranes
Valves
Pumping units
Separators
Compressors and skids
Tanks
Sucker rods
Coalescers
Catalytic heaters
Obsolete wellhead materials
Reboilers
Shipping containers
Articulating bridges
Fencing
Generators
Buildings / living quarter materials
Cantilever beams
Transformers
Tools
Flowlines
Satellite VSAT systems
Centrifuges
…and other assorted equipment

* Based on actual Accruit client

IconX Energy* is one of the world’s largest energy companies, providing customers around the globe with fuel for their automobiles, electricity for their homes and a wide range of petrochemical products for every phase of their lives. As with any large enterprise, IconX is constantly buying and selling large quantities of assets, and in the process, dealing with the complex tax implications of these activities.
The Problem
IconX had historically employed 1031 like-kind exchanges (LKEs) for real estate and leasehold transactions, but several years ago company executives learned that LKEs could also be used for non-real estate assets – vehicles, production/drilling equipment, even certain types of intangible assets (like mineral rights).
Suspecting that 1031 exchanges might support productive tax and cash flow strategies, the firm contacted Accruit, which it knew had strong roots in the Oil & Gas industry.
The Accruit Solution
Accruit’s Sales and Client Service groups immediately realized that IconX was, indeed, an ideal candidate for a robust corporate asset exchange program. The company was moving hundreds of millions of dollars worth of assets and leaving the deferral benefits to which they were legally entitled on the table. In addition to a significant number of real estate exchanges, IconX – like most O&G businesses in its sector – was buying and selling massive numbers of tangible and intangible assets each year.
Accruit worked with IconX’s tax, procurement and investment recovery groups to implement an ongoing Master Exchange program that would allow the company to keep its cash at work in the business.
The Results
Since launching, IconX has funneled more than $650 million worth of sales through its Accruit LKE program. The relinquished assets have run the gamut of Oil & Gas industry asset types (see list below).
The average combined tax rates on these sales has been roughly 40%, meaning that Accruit has provided IconX with the opportunity to generate a tax benefit of roughly $260 million. That’s better than a quarter of a billion dollars in operating cash flow.
IconX has also derived tremendous asset management value from the Accruit Exchange ManagerTM platform. Asset-level tracking capabilities allow IconX to keep tabs on a huge asset portfolio; audit-ready reporting supports a comprehensive range of internal and external financial requirements; and the combination of advanced, automated technology and one-to-one client service has allowed them to dramatically reduce risk and administrative burden across the entire program. These results testify to the IconX program’s substantial value-added benefits – even in cases where the client doesn’t replace relinquished assets, the Accruit platform (constructed on the only patented 1031 exchange process in the industry) still represents a powerful tool for managing the overall asset portfolio.
Assets in IconX LKE Program

Large and small real estate holdings
Leaseholds
Mineral rights
Tubing, piping and casing
Scrap metal
Vehicles (trucks, trailers and SUVs)
Cranes
Valves
Pumping units
Separators
Compressors and skids
Tanks
Sucker rods
Coalescers
Catalytic heaters
Obsolete wellhead materials
Reboilers
Shipping containers
Articulating bridges
Fencing
Generators
Buildings / living quarter materials
Cantilever beams
Transformers
Tools
Flowlines
Satellite VSAT systems
Centrifuges
…and other assorted equipment

* Based on actual Accruit client

As we told you last week, the FEA was successful once again in pushing regulations through the Colorado House and Senate to provide consumer protection for those conducting 1031 like-kind exchanges in the state. The Governor signed HB09-1254 into law on 4/16/09.  Washington’s Governor signed a similar law on Monday, April 13.  Who next?  Texas? Maine? Arizona? Oklahoma?  The ideal goal is to maintain reciprocity between these states so that QIs can deliver consistent guidance and maintain reasonable standards for customers across the country.
Right now there are five states (CA, NV, ID, WA & CO) that have some form of qualified intermediary regulations on the books.  California took the lead by adopting regulations that provide exchangers certain levels of protection and requiring prudent investment standards ensuring liquidity and protection of principal.  Colorado recognized the importance of achieving consistency; it also understood the importance of safeguarding consumers while simultaneously protecting an industry that facilitates growth for Colorado companies.  Texas, Arizona, Oregon and Oklahoma are all leaning toward a model law that supports reasonable regulations, but Nevada and Idaho have passed regulations that are either very difficult to follow or aren’t business friendly at all.  It’s been two years since Nevada enacted their law and they still don’t have final guidance on how exchangers need to ensure compliance.  Now it seems that Maine wants to follow Idaho’s laborious, expensive and unrealistic standards, forcing QIs to complete reams of paperwork, provide background checks, register with the state and create very specific banking structures just to  provide a well established federal tax service to businesses in their state – all at a tremendous cost.
There will be more states, more laws, more dollars spent to accomplish  – in the end – the same result.  Encouraging your state to adopt model law is a good idea for everybody.  There’s no reason to reinvent the wheel.