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SALT Blawg

SALT Blawg – State and Local Tax

State and Local tax issues require state and local tax knowledge. SALT Blawg provides exactly that knowledge with news updates and commentary about state and local tax issues. You can expect to find relevant information about topics such as income (corporate and personal) tax, franchise tax, sales and use tax, property (real and personal) tax, fuel tax, capital stock tax, bank tax, gross receipts tax and withholding tax. SALT Blawg, offers tax talk for tax pros… in your neighborhood.

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 by Jennifer Weidler

ARIZONA

Arizona Senate Approves Bill Aimed at Amazon.com

The Arizona Senate Commerce and Energy Committee approved a bill, SB 1338,which is designed to affect Amazon.com by expanding the definition of “retailer” to include companies that have warehouses or distribution centers in the state. Amazon.com currently maintains four (4) warehouses within Arizona.  As we noted in last week’s update, the Arizona Department of Revenue has issued a bill to Amazon.com alleging that it owes $53 million in uncollected taxes in the state.

 

CALIFORNIA

California ...

Categories: SALT

  by Stewart Weintraub and Jennifer Weidler

Earlier this week, the New Jersey Superior Court, Appellate Division, affirmed a decision of the Tax Court of New Jersey finding that a lack of nexus existed for distributions made to a foreign limited liability partner from a partnership with an in-state presence. See, BIS LP Inc. v. Division of Taxation, Docket No. A-1172-09T2 (NJ Super. Ct. 2011).

BIS, the taxpayer at issue, was a foreign corporation with no place of business, property, employees or agents in the state of New Jersey.  Its only interest was its ninety-nine percent (99 ...

Categories: New Jersey, SALT

  by Stewart Weintraub and Jennifer Weidler

Arizona is preparing to launch a tax amnesty program, slated to run from September 1, 2011 through October 1, 2011.  To participate in the program, taxpayers must file an original or amended return, an amnesty application, and pay in full any tax and interest due by October 1, 2011.  With the exception of the estate tax and property tax, the tax recovery program applies to every state and/or local tax obligation, including individual and corporate income tax, sales and use tax, withholding tax and partnership tax.  For annual tax filings ...

Categories: Arizona, SALT

 By Paul Masters

This is the year of the Amazon. Multiple sources, including individual affiliates, are reporting that Amazon, Overstock and other Internet retailers are severing ties with their affiliates in Connecticut and Arkansas. Both of those states recently enacted changes to their sales tax laws that required Internet retailers to collect sales tax on transactions made with persons in those states. The states were able to “reach” the Internet retailers through an expanded nexus by means of the “associate” or “affiliate” programs commonly used by such ...

Categories: Sales and Use Tax, SALT

 By Paul Masters

Alabama House Bill 434, signed by Governor Robert Bentley, enacts three significant changes to Alabama’s apportionment provisions for tax years beginning on or after December 31, 2010:

* Double weight the sales factor for determining apportionment to 50%;

* Change from focusing on the location of income production for apportionment purposes to the taxpayer’s market for the sale for transactions other than tangible personal property; and

* Adoption of a “throwout” rule (similar to that recently rejected by New Jersey), by which a transaction that cannot ...

Categories: Franchise Tax, SALT

 By Paul Masters

Any Material Damage Enough to Avoid Sales Tax on Installation Costs for a Roller Coaster, But Likely Not in Texas

The New York Tax Appeals Tribunal has summarily affirmed a recent decision of the Division of Tax Appeals analyzing the applicability of sales and use tax to the $2,000,000 purchase and installation costs paid by Amusements of WNY, Inc. (“WNY”) for the Silver Comet roller coaster. The Tax Appeals Tribunal rejected the Division of Taxation’s appeal on the basis that the Silver Comet could be unbolted from its cement footings and re-erected elsewhere ...

Categories: Sales and Use Tax, SALT

 By Paul Masters

Some two weeks ago, we commented on the passage of House Bill No. 2403, a stand-alone version of the Amazon law that would have clearly required Amazon and other Internet retailers subject to collecting Texas sales and use tax on sales of tangible personal property if there was a link to a physical presence in Texas. Amazon had such a link via its distribution center near Dallas. A bill introduced by Rep. Harper-Brown to protect Amazon from such a requirement to collectTexas sales and use tax was buried in the House Ways & Means Committee.

On May 31, 2011, Texas Governor Rick ...

Categories: Sales and Use Tax, SALT

 By Paul Masters

The New York Division of Tax Appeals, an Administrative Court, recently ruled in Decision DTA Nos. 822750 and 822751 on the basis of whether the auditor properly used estimated techniques to determine the amount of tax due in connection with an audit of a full-service Japanese restaurant.  The taxpayer, a full-service Japanese restaurant with small bar, was audited for the period of March 1, 2004 through November 30, 2006 in connection with sales and use tax.  The audit period was subsequently amended to include that period through May 31, 2007.  During the course of the ...

Categories: Sales and Use Tax, SALT

 By Paul Masters

Virginia, like Texas, treats a contractor as the consumer, or the user, of materials that it purchases in order to perform construction and other contracting services.  See generally, Virginia Field Audit Guidelines. In the case of Texas, this application of this rule depends on the invoice methodology used by the contractor, i.e., whether the contractor uses a separated or completed contract. See generally, Texas Audit Procedures for Contractors and Repairmen.

In the instant case, the taxpayer fabricates and delivers to job sites various tangible personal ...

Categories: Sales and Use Tax, SALT

 By Paul Masters

With one lone dissent, the Texas Senate passed a bill last Friday, May 13, 2011, relating to Internet retailers doing business in Texas. As previously highlighted HB 2403 attempts to settle the issue raised by the Texas Comptroller on whether Amazon is engaged in business in Texas by setting up a distribution center in Texas. The Comptroller has already estimated a $269 million assessment against Amazon. This bill states that this is a "change in law," and that it does "not affect tax liability accruing before the effective date" of the legislation, being January 1 ...

Categories: Sales and Use Tax, SALT