SALT Blawg – State and Local Tax
State and Local Tax ("SALT") issues require state and local tax knowledge. Chamberlain Hrdlicka's 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.
Chamberlain Hrdlicka Blawgs
The Alliance for Main Street Fairness Launches Website Targeting Amazon.com
On August 25th, the Alliance for Main Street Fairness launched a web site that asked individuals to anonymously submit stories relating to Amazon.com's alleged efforts to avoid collecting state sales taxes. The Alliance, representing mainly brick-and-mortar business, has pushed for states to enact "Amazon" laws, arguing that such laws promote tax fairness. Conversely, opponents to "Amazon" laws believe that states are reaching beyond their constitutional limits.
Although Supportive of "Amazon" Law, Wal-Mart Not Collecting California Sales Taxes by Online Retail Partner
CSN Stores, LLC is a Wal-Mart Marketplace vendor which uses an online platform. During June, California Governor Jerry Brown signed the state's "Amazon" law, which had been supported by Wal-Mart. The California law established nexus and collection obligations for remote sellers who maintain in-state affiliate relationships. While CSN has been making online sales into California, Wal-Mart has not collected taxes on those sales, according to the Los Angeles Times.
Streamlined Sales Tax Governing Board Opposes Federal Digital Goods and Services Taxation Act
On August 31, the Streamlined Sales Tax Governing Board passed a resolution opposing the Digital Goods and Services Tax Fairness Act. The Act seeks to set national guidelines for state and local taxation of digital goods in a stated attempt to promote neutrality, simplicity, and fairness in the taxation of digital goods and digital services. The Board opposes the Act because they believe that it contains language that conflicts with the Streamlined Sales and Use Tax Agreement. Furthermore, some Board delegates argue that federal legislation should not address the digital goods taxation issues. Instead, those delegates argue that the issue should be addressed through the streamlined agreement.
Pennsylvania Third Party Preparers Required to File Electronically or Pay Penalty
On August 27, the Pennsylvania Department of Revenue issued a notice that any third party preparer who prepares fifty (50) or more Pennsylvania corporate tax reports is required to file electronically for all calendar years following the calendar year in which the third party preparer prepares fifty (50) or more Pennsylvania corporate tax reports. If a third party preparer fails to file corporate tax reports electronically per the requirements of the notice, the preparer will be subject to a penalty of 1% of the tax due, amounting to a minimum penalty of $10 and a maximum penalty of $500. Certain exceptions allowing for a waiver of penalty exist under delineated exclusions contained in the notice.
State DOR Rulings
The Iowa Department of Revenue issued two rulings. The first ruling addresses the taxation of “loyalty points” that are awarded by mobile companies and then used to reduce the purchase price of cell phones. In the analysis, such reductions in price are treated akin to coupons, and reductions of the purchase price subject to sales tax.
In the other ruling, the Iowa Department of Revenue ruled that where a cell phone is replaced under a warranty program, the replaced cell phone is not subject to sales tax, but the deductible paid in the exchange (in this case, $100) is subject to sales tax.
Missouri’s Department of Revenue recently issued a ruling regarding the taxation of iPads and similar equipment. Missouri provides for a sales tax holiday for retail sales of clothing, personal computers, and school supplies. The question is whether an iPad is a “computer” and therefore exempt from sales tax on the holiday. The Department answered in the affirmative for iPads, but not for “readers” such as the Kindles.
Rhode Island proposes a new regulation for the taxation of the sale of marijuana. The rule provides that such sale would be exempt when prescribed, just like other prescription drugs.
Maryland’s Department of Legislative Services staff are expected to testify to the Maryland Senate that a gross receipts tax would bring in more gross revenue. (We are withholding comment on the University of Maryland’s new uniforms, which apparently are a hit on campus.) You can see the a Power Point presentation here.
Judicial and Administrative Decisions
New York disregards the form of a transaction as between a husband and a wife.
The New York Division of Tax Appeals ruled that the auditor failed to give adequate notice for records. As time was running out for making the assessment, the auditor rushed through an audit, requested records, but failed to give a reasonable opportunity to the taxpayer to comply. The auditor than generated an estimated audit, which the taxpayer challenged as improper and inaccurate. The taxpayer won.