Upcoming National Meeting

2019 Canadian Tax Workshop For U.S. Companies

2 ½ day workshop covering the key tax issues that U.S. companies outside of Canada who are doing business with Canadians or in Canada need to know. The primary focus of the workshop will be on GST, HST and Income Tax. It will also cover QST, Payroll and Property Taxes. An interactive audit session covering Canadian taxes is also planned.

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Newsletters & Media

Cost Conscious

ISSUE 19-16; August 9, 2019

Impact of the U.S. Supreme Court Kaestner Case on COST Members – On June 21, the U.S. Supreme Court in North Carolina Department of Revenue v. The Kimberly Rice Kaestner 1992 Family Trust held the Due Process Clause prevents a state from taxing the undistributed income earned by a trust merely based on the presence of in-state beneficiaries (see prior coverage in COST Conscious Issue 19-13). Which

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Bloomberg TAX

Missouri Governor Calls Special Session on Car Sales Tax

 

Missouri Gov. Mike Parson has called a September special legislative session aimed at tweaking the new-car sales tax in response to a recent ruling of the state Supreme Court.

Alabama DOR Announces New Rental, Lodging Tax Rates in City of Arab

 

The Alabama Department of Revenue (DOR) Aug. 12 announced the new sales and use, and excise tax rate for the city of Arab. The general rental tax and lodging tax rate is three percent, the auto rental tax rate is one percent, and linen rental tax rate is three percent. The per room lodgings fee is $3 and the per room campsite fee is $0.80. The new rates take effect Sept. 1 and taxpayers can remit the sales and use tax online through the DOR's electronic filing system. [Ala. Dep't of Revenue, Local Tax Rate Notice, 08/12/19]

Alabama DOR Announces New Sales and Use Tax Rates in City of Sumiton

 

The Alabama Department of Revenue (DOR) Aug. 14 announced that the city of Sumiton increased the sales and use tax rates. The DOR stated: 1) the general rate, admissions to places of amusement and entertainment, and retail sale price of food for human consumption from vending machines increased to four percent; and 2) rates for machines, parts, and attachments for machines used in manufacturing tangible personal property is one percent. The new rates take effect Sept. 1 and the taxes can be remitted online through the DOR's electronic filing system. [Ala. Dep't of Revenue, Local Tax Rate Notice, 08/14/19]

Alabama DOR Announces New Sales and Use Tax Rates in Macon County

 

The Alabama Department of Revenue (DOR) Aug. 20 announced that the Macon County Commission increased the sales and use tax rates. The DOR stated: 1) the general rate, admissions to places of amusement and entertainment, and retail sale price of food for human consumption from vending machines increased to 2.50 percent; and 2) rates for machines, parts, and attachments for machines used in manufacturing tangible personal property is 0.25 percent. The new rates take effect Sept. 1 and can be remitted online through the DOR's electronic filing system. [Ala. Dep't of Revenue, Local Tax Rate Notice, 08/20/19]

Alabama DOR Issues Local Tax Notice on Lodging Tax Rate in Autauga County

 

The Alabama Department of Revenue Aug. 13 issued a local excise tax rate notice to persons, firms, and corporations renting or furnishing rooms, lodgings, or accommodations to transients in Autauga County. Effective Sept. 1, the lodging tax rate: 1) outside the city limits of Prattville is 10 percent; and 2) inside the city limits of Prattville is 3 percent. The county's governing body adopted Resolution 2019-211 levying a lodgings tax with an Oct. 20 due date. [Ala. Dep't of Revenue, Local Tax Notice, 08/13/19]

Arizona DOR Issues Reminder for Transaction Privilege Taxpayers to File, Pay August Returns Online

 

The Arizona Department of Revenue (DOR) Aug. 20 issued a reminder for transaction privilege sales and use taxpayers to file their August returns. The DOR informed taxpayers: 1) the online filing service is available on nights and weekends for filing returns and paying taxes; 2) the service is free and allows payments to be scheduled up until the second to last business day before the deadline; 3) electronic filing is mandatory for entities with multiple business locations or with a total annual combined state, county, and municipal tax liability of $10,000 or more in 2018; 4) the minimum penalty for paper filing if electronic filing is mandatory is $25; and 5) the late filing penalty is 4.5 percent of the tax due, subject to minimums and caps set by the DOR. [Ariz. Dep't of Revenue, TPT Filers-Please Submit Your Return - August 2019, 08/20/19]

California BOE Issues Letter to County Assessors on Low-Value Exemption Changes for Property Taxes

 

The California Board of Equalization (SBOE) Aug. 19 issued a letter to county assessors on low-value exemption changes for property tax purposes. Effective July 12, Assembly Bill 608 amends Cal. Rev. & Tax Code Section 155.20 regarding the low value exemption. The section authorizes a county board of supervisors to exempt from property taxes property with a value so low that taxes, assessments, and subventions would amount to less than the cost of assessment and collection. The exemption is determined by factored base year value for real property and real value for personal property. The bill makes several changes to the section on possessory interests and the administration of the exemption. The SBOE enclosed a copy of the amended section in strikeout and italics format. [Cal. State Bd. of Equalization, SBOE Letter to Assessor No. 2019/023, 08/19/19]

California CDTFA Releases Revised Form CDTFA-1071 for Reporting Common Carrier's Cigarette Interstate Deliveries, Foreign Shipments

 

The California Department of Tax and Fee Administration (CDTFA) Aug. 1 released a revised Form CDTFA-1071 for reporting a common carrier's cigarette deliveries of interstate or foreign shipments of cigarettes destined for California. The form provides instructions for preparing and completing the report for excise tax purposes. The report must be filed on or before the 25th day of each month covering cigarette deliveries made during the preceding calendar month, even if no deliveries are made. [Cal. Dep't of Tax & Fee Admin., Form CDTFA-1071, 08/01/19]

California Court of Appeal Finds Lack of Jurisdiction Over Taxpayers' Property Tax Appeal

 

The California Court of Appeal Aug. 20 dismissed Taxpayers' property tax appeal for lack of jurisdiction. The Mariposa County adopted a resolution to levy an annual assessment upon a real property to fund expenditures related to firefighting services. Taxpayers claimed the assessment was a special tax, meaning it had to be approved by two-thirds of the electorate. The county claimed to have acted pursuant to Government Code. The trial court issued a judgment in favor of the county. Taxpayer argued that the levy didn't qualify as an assessment and was therefore unconstitutional. The county moved to dismiss the appeal for lack of appellate jurisdiction. The court of appeal noted that the appeal must be filed within 30 days after notice of entry of judgment. Taxpayers' notice of appeal was filed 56 days after the notice of entry of judgment. Therefore, the court of appeal dismissed the appeal. [Davis v. Mariposa Cty. Bd. of Supervisors, Cal. Ct. App., No. F074986, 08/20/19]

California FTB Addresses Application of Target's Apportionment Formula to Global Media Company Gains

 

The California Franchise Tax Board (FTB) July 11 determined in a letter ruling that gain realized on a target's deemed asset sale pursuant to an IRC section 338(g) election is apportioned using the target's adjusted apportionment formula. Taxpayer, a global media company, inquired about the application of the formula to its gain realized from the election. The FTB determined that the target was already unitary with Taxpayer at acquisition. Taxpayer's election results in the target's deemed sale of assets. Gain on the deemed asset sale pursuant to the election must be apportioned using the target's adjusted apportionment formula. Target's apportionment factor percentage is used to source the gain on a deemed asset sale, and corresponds to the target's intrastate apportionment percentage. Gain realized must be reported by the target on target's return and apportioned to California using the formula, for corporate income tax purposes. [Cal. Franchise Tax Bd., FTB Chief Couns. Ruling No. 2019 - 02, 07/11/19]

Tax Notes

Minnesota Projects Shortfall After Loss in Trust Taxation Case

 

Minnesota’s loss in court over its taxation of trust income is estimated to cost the state $33.4 million in annual revenue.

California Bill to Reduce Local Tax Vote Threshold Fails

 

California’s State Assembly has voted down a constitutional amendment that would have reduced the threshold necessary to increase certain local taxes.

Pennsylvania Bills Propose Tax Hike on Unearned Income

 

Supporters of a Pennsylvania proposal to increase the tax rate on select classes of income have indicated the measure could generate over $2 billion in new revenue during the first year.

Airline Contractor Not Entitled to Exemption, New Jersey Court Says

 

A contractor hired by an airline to install a baggage handling system at Newark Liberty International Airport was not entitled to a sales and use tax exemption for its materials, the New Jersey Tax Court has held.

Louisiana Court Finds Medical Devices Included in Drug Exemption

 

Medical devices are included in the sales and use tax exemption for prescription drugs set out in the Louisiana Constitution, a state appellate court has held.

Wisconsin Bill Would Exempt Some Construction Materials

 

A Wisconsin bill would create a sales tax exemption for construction materials that are altered in the state but used for out-of-state construction by specific purchasers.

Chicago Casino Not a Good Bet, Study Says

 

Opening a casino in downtown Chicago would not be financially feasible because of the "onerous tax and fee structure" imposed by recent legislation, according to a study commissioned by the Illinois Gaming Board.

Post-Wayfair Remote Sales Tax Estimates Fall Short

 

Remote sales tax estimates are falling short of predictions made before Wayfair for several reasons, including overly optimistic online sales growth projections and a failure to account for existing collections by large online retailers.

Ohio Lawmakers Get Hotel Subsidy After TCJA Changes

 

The Ohio House of Representatives is reimbursing out-of-town members for hotel stays during the legislative session after the federal Tax Cuts and Jobs Act suspended itemized deductions for work-related travel.

Pennsylvania Court Rejects Class Action Against Assessment Appeals

 

The Pennsylvania Commonwealth Court has dismissed a class action suit alleging that the uniformity clauses of the U.S. and state constitutions bar Allegheny County and Pittsburgh from appealing a property's assessment, finding that the owners had not exhausted their statutory remedies.

Featured Resources

COST - Council on State Taxation

Amicus Briefs

Jefferson Parish v. Walmart.com

COST filed an amicus brief on the merits on June 20, 2019 stressing to the Louisiana Supreme Court that a marketplace facilitator does not meet the definition of a “dealer” under the State’s law, violates due process because adequate notice was not provided, and the Parish of Jefferson’s interpretation could result in retroactive imposition of a tax from the Louisiana Dep’t of Revenue and 62 other

COST - Council on State Taxation

COST Studies, Articles & Reports

2019 State and Local Amnesty Programs

This report tracks state and local tax amnesty programs by state for 2019.

COST - Council on State Taxation

COST Comments & Testimony

Testimony in Opposition to CA AB 1270 – False Claims Act Suits

COST submitted testimony to the California Senate Appropriations Committee, in opposition to Assembly Bill 1270, which if implemented would allow False Claims Act suits for state and local tax issues