Upcoming National Meeting

2019 State and Local Tax Workshop for the Tech Industry

One and a half day conference focusing on state and local tax issues for technology companies. Leading practitioners from across the U.S. will get those new to the area of state and local tax up to speed on all types of taxes, including sales and use, income, property and local taxes, and will provide in-depth panel discussions on other specific state and local issues impacting the tech industry.

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Newsletters & Media

Cost Conscious

ISSUE 19-12; June 14, 2019

Potential OECD Project Implications for SALT – The Organization for Economic Cooperation and Development (OECD) is currently reviewing options to address base erosion and profit shifting. These options include proposals relating to market sourcing, economic presence (to replace permanent establishment rules), digital industry taxation, and a global minimum tax regime. Do you think the final OECD w

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Bloomberg TAX

N.J. Democrat Helped Shape Tax Breaks to His Benefit, Panel Says

 

A New Jersey political boss and some of his allies shaped a law to grant tax breaks for redevelopment in one of America’s most distressed cities, then benefited from a state agency’s sloppy oversight, an investigative panel declared in its first public report.

California Looks to Nix Tampon Tax, Ease Use Tax on Some Sellers

 

Diapers and menstrual products would be tax-free for two years, and some remote sellers would get use tax relief in a bill heading to the California governor.

House Subcommittee Schedules June 25 Hearing on SALT Cap

 

The House Ways and Means Select Revenue Measures Subcommittee will hold a hearing on the cap on state and local tax, or SALT, deductions next week, Chairman Mike Thompson said in a statement.

Tax-Haven Wedding Venues Become Nightmare for Retiree Investors

 

A small group of retirees paid a combined $6.2 million last year for ownership stakes in a fancy event-rental space in Carmel, Indiana, expecting it would generate double-digit returns and qualify them for a tax break used by thousands of Americans to defer capital gains on real estate.

Murphy Foe Thwarted in Bid to Block N.J. Tax-Incentives Inquiry

 

A New Jersey Democratic power broker attempting to reshape one of America’s poorest cities lost a legal bid to quash a report by a panel investigating an $11 billion state tax-break program.

Alabama Governor Signs Law Exempting Ballroom, Dining Room, Club Room, Conference Room From Lodging Tax

 

The Alabama Governor June 9 signed a law on lodging excise tax. The law includes measures: 1) providing that the charges made for the rental of a ballroom, dining room, club room, sample room, conference room, or wedding chapel that isn't intended nor suitable for overnight sleeping purposes wouldn't be subject to the lodging tax; and 2) clarifying that the exclusion applies solely to the transient occupancy tax and doesn't apply to any other taxes, licenses, or fees. The law takes effect Sept. 1. [S.B. 171, enacted 06/09/19]

Alabama Tax Tribunal Affirms DOR's Sales Tax Assessments on Convenience Store

 

The Alabama Tax Tribunal June 10 affirmed the Department of Revenue's (DOR) final assessment of sales tax. The DOR audited for the period in issue and requested Taxpayer's records from which Taxpayer's liability could be computed. Taxpayer submitted records but failed to submit sales records. The DOR determined that Taxpayer's records were insufficient to determine the tax liability. The DOR determined that Taxpayer's purchases exceeded the total taxable sales reported and tax is due on the estimated sales. Taxpayer challenged the DOR's decision. The DOR then applied the mark-up audit method to arrive at Taxpayer's estimated retail sales. Taxpayer claimed that the DOR shouldn't have used this method. The DOR argued that this method is the most recognized when a Taxpayer fails to provide records. The tribunal found that DOR's audit was properly conducted using the best information available. Accordingly, the tribunal affirmed DOR's decision. [Ala. Tax Trib., Admin. Law Judge Ruling Docket No. S. 18-149, 06/10/19]

Arizona DOR Publishes Transaction Privilege Tax Newsletter Update

 

The Arizona Department of Revenue (DOR) June 1 published a newsletter on transaction privilege sales and use tax updates providing that the remote sellers and marketplace facilitators to begin filing and paying starting Oct. 1. The DOR provided that: 1) the remote sellers must file and pay if their annual gross retail or online sales income is more than $200,000, $150,000 in 2020, $100,000 in 2021, and thereafter; 2) the marketplace facilitators must collect and remit tax if their gross retail proceeds or income exceeds $100,000 annually; 3) the online lodging marketplaces must register with the DOR to file and pay; and 4) a penalty abatement procedure applies to property management companies registered with the DOR that filed returns. The DOR also mentioned filing reminders for taxpayers, which includes return due date June 20, paper returns on June 27, and electronic returns by June 28. [Ariz. Dep't of Revenue, TPT Newsletter, 06/01/19]

Arkansas Appeals Office Finds Finance Department Correctly Assessed Sales Tax on Vehicle, Repossession No Defense

 

The Arkansas Office of Hearings and Appeals (OHA) June 13 found that the Department of Finance and Administration (DFA) correctly assessed sales and use tax on Taxpayer's motor vehicle purchase. Taxpayer protested the DFA's gross receipts tax assessment. Taxpayer stated that she wasn't aware of the tax liability since the vehicle was repossessed. The OHA observed that Taxpayer purchased a used vehicle and obtained possession. Taxpayer failed to timely register the vehicle or pay applicable taxes. The DFA proved that: 1) Taxpayer didn't establish that a rescinded sale occurred; 2) Taxpayer took ownership and possession of the vehicle; 3) the vehicle constituted tangible personal property; 4) the ownership and possession of the car triggered the statutory tax liability; 5) lack of knowledge of publicly available statutes and rules couldn't be recognized as a defense to enforcement. Consequently, the OHA sustained the assessment. [Ark. Dep't of Fin. & Admin., Docket No. 19-468, 06/13/19]

California BOE Announces Public Meeting on June 25, 26 for Property Taxes

 

The California Board of Equalization (SBOE) June 14 announced that it will hold a public meetings June 25 and June 26 on property tax matters. The SBOE listed the chronology of agenda items including: 1) a report on the time extension for Amador, Colusa, Lake, Lassen, Nevada, Sierra, Sonoma and Yuba Counties to complete and submit 2019 local assessment rolls; 2) the executive director's reports, covering an overview of Governor's budget; 3) the property tax deputy director's report; 4) the legislative, research, and statistics division chief's report; and 5) the board members' requested matters. [Cal. State Bd. of Equalization, State Board of Equalization Meeting, 06/14/19]

Tax Notes

Colorado's Billion in Pot Revenue May Prove Powerful Enticement

 

States debating whether to legalize recreational marijuana will likely take note of Colorado's recent announcement that it has collected over $1 billion in revenue since legalizing sales of the drug.

California Lawmakers Pass Budget That Assumes Conformity Revenue

 

California lawmakers have approved a fiscal 2020 budget plan that assumes updated IRC conformity to fund a an expansion of the state earned income tax credit.

Nevada Governor Signs Marketplace, Payroll Tax Bills

 

Nevada Gov. Steve Sisolak (D) recently gave final approval to legislation including a marketplace collection bill, a controversial bill extending the state’s payroll tax rates, and a bill exempting virtual currencies from property taxation.

New Jersey Assembly Panels Advance Bill to Extend Incentive Programs

 

A bill that would extend application deadlines for two New Jersey incentive programs that are set to expire soon has cleared two panels in the General Assembly.

Massachusetts Legislature Approves Millionaire’s Tax

 

Massachusetts lawmakers have approved a proposed constitutional amendment to levy a millionaire’s tax.

Hawaii Adopts Market Sourcing for Services, Intangibles

 

Hawaii Gov. David Ige (D) has approved legislation applying market-based sourcing to sales of services and intangibles.

New Jersey Bill Would Exclude Foreign Income From Water's-Edge Combined Group

 

Foreign-source income subject to a federal income tax treaty would be excluded from the net income of a combined group that makes a water’s-edge election, under a recently introduced New Jersey bill.

Massachusetts Leaders Delay Family Medical Leave Plan

 

Massachusetts leaders have reached an agreement to delay rolling out the state's new paid family leave program by three months and postpone until October the effective date of the payroll tax that will fund the program.

Pennsylvania DOR Teams With Service Providers for Remote Sellers

 

Pennsylvania’s revenue department is working with a handful of certified service providers to offer sales tax collection services to out-of-state sellers at a reduced cost.

United Technologies to Remain Eligible for Connecticut Tax Credits

 

United Technologies Corp. will continue to be eligible for research and development tax credits from Connecticut, despite relocating its headquarters to Boston as part of a merger with Raytheon Co.

Featured Resources

COST - Council on State Taxation

Amicus Briefs

Lockheed Martin v. Hegar

COST filed an amicus brief asking the Texas Supreme Court to review whether sales of sensitive military equipment to foreign governments, which the DoD is required to act as an intermediary, are Texas-sourced sales or more properly not Texas-sourced sales because the equipment was delivered to foreign governments.

COST - Council on State Taxation

COST Studies, Articles & Reports

The Best (and Worst) of International Property Tax Administration

This is a follow up from a previous Scorecard on International Property Tax Administration issued by COST and IPTI in 2014, substantially modified to reflect important aspects of property tax administration from an international perspective. The latest Scorecard focuses on three important areas essential for fair and efficient property tax administration: 1) transparency, 2) consistency, and 3) pr

COST - Council on State Taxation

COST Comments & Testimony

Testimony re. Wisconsin Budget Bills A.B. 56 and S.B. 59 – IRC Sec. 163(j) and Marketplace Provider Provisions

COST opposes the application of Internal Revenue Code (IRC) Sec. 163(j) to Wisconsin’s income tax. COST recommends changes to A.B. 56 & S.B. 59 marketplace provider provisions. COST also recommends the allowance of a Wisconsin dividend received deduction when a foreign subsidiary elects to be taxed as a corporation (federal “check the box” rule).