Latest COST Conscious

ISSUE 19-18; September 6, 2019

Transfer Pricing Audit Activity – Several COST members have reported increased transfer pricing audit activity by states that have engaged RoyaltyStat or other third-party consultants. Concern continues to grow about the tactics used during such audits, such as aggressive use of novel transfer pricing theories and excessive IDRs that appear to be designed to force settlements. Which of the followi

Latest Practitioner Connection

ISSUE 19-19; September 13, 2019

Multistate: More State Wayfair-Related Developments – State taxing authorities are beginning to issue guidance for remote sellers and marketplace facilitators to provide guidance on recently-enacted remote seller and marketplace nexus laws. KPMG LLP, September 9, 2019.

BLOOMBERG TAX

Oregon DOR Issues Information on Series of Meetings on Corporate Activity Tax Rules

 

The Oregon Department of Revenue (DOR) Sept. 16 issued information on the new corporate activity excise tax. The DOR provided that it will hold a series of meetings across the state over the next three weeks to seek input from business taxpayers and tax preparers about the administrative rules for the new tax. The first meeting is planned for Sept. 17. The new tax imposes a $250 tax on the first $1 million of gross receipts after subtractions and 0.57 percent tax on gross receipts greater than $1 million after subtractions, beginning Jan. 1, 2020. Issues expected to be discussed at the series of meetings include: 1) who, when, and how businesses register; 2) who must file and pay the tax; 3) annual returns based on the calendar year activity; 4) exemptions for charitable organizations and exclusions; and 5) how estimated payments will be calculated. [Or. Dep't of Revenue, Department of Revenue Seeks Input on Corporate Activity Tax Rules, 09/16/19]

Philadelphia DOR Issues Information on Tax Programs, Services Offered by North Philly Satellite Office

 

The Philadelphia Department of Revenue Sept. 16 issued information on services and programs offered by the North Philly satellite office for corporate income, individual income, trust income, sales and use, excise, property, and estate tax purposes. The managers of the office provided that: 1) the office works with all revenue accounts, including real estate tax, business taxes, water billing, and refuse fees; 2) taxpayers can pay all city taxes and water bills with checks, money orders, and debit and credit cards at the office; and 3) the office helps taxpayers identify what tax programs are out there, and what kind of documents are needed to apply. [Phila. Dep't of Revenue, News Release, 09/16/19]

Pennsylvania Governor Announces Keurig Dr. Pepper Expands to Kraft-Heinz Site, Creating 378 New Full-Time Jobs

 

The Pennsylvania Governor Sept. 16 announced that beverage manufacturing company, Keurig Dr. Pepper, will expand its operations and create 378 new full-time jobs at the shuttered Kraft-Heinz site in the Lehigh Valley. The governor highlighted that the company received a funding proposal from the Department of Community and Economic Development for a $1.5 million Pennsylvania First grant, $170,100 in WEDnetPA funding for worker training, and $1.134 million in job creation corporate income tax credits to be distributed upon creation of the new jobs. The company's new facility will provide additional capacity for existing and new brands and will help optimize logistics by providing large-scale warehouse operations. [Pa. Governor's Office, News Release, 09/16/19]

South Carolina Administrative Court Finds ATVs, UTVs Subject to Motor Vehicle Maximum Sales Tax Limit

 

The South Carolina Administrative Law Court Sept. 13 found that Taxpayer properly remitted the maximum motor vehicle sales and use tax on its sales of all-terrain vehicles (ATVs) and side-by-side vehicles (UTVs). The Department of Revenue (DOR) contended that ATVs and UTVs designed for off-road use weren't entitled to the motor vehicle maximum tax limitation. The administrative court found: 1) the plain language of "motor vehicle," on its face, includes ATVs and UTVs because they are, in the general sense, motorized vehicles; 2) the legislature intended "motor vehicle" to be more expansive than just motor vehicles operated upon public highways; 3) the DOR's interpretation wasn't entitled to deference as it ignored the statutes' plain language; and 4) the tax statutes and the motor vehicle registration statutes did not deal with the same subject matter. Accordingly, the administrative court found ATVs and UTVs were motor vehicles for maximum tax purposes. [Jack's Custom Cycles v. Dep't of Revenue, S.C. Admin. Law Ct., No. 18-ALJ-17-0393-CC, 09/13/19]

South Carolina DOR Announces $50 Rebate Checks to Qualifying Taxpayers by Early December

 

The South Carolina Department of Revenue (DOR) Sept. 16 announced that $61 million of the tax dollars generated from the 2018 Mega Millions winner would be used to fund $50 rebate checks for qualifying individual income taxpayers. To qualify for the rebate, taxpayers: 1) must have filed a 2018 state individual income tax return on or before Oct. 15; and 2) must have a state tax liability after credits of at least $50. The DOR provided that the rebates will be issued as paper checks by Dec. 2, and will be mailed to the most recent address on file for eligible taxpayers. Only one check will be sent per tax return, meaning joint returns receive only one $50 check. The DOR provided instructions on updating a new address. Non-residents who filed a return and meet the eligibility criteria will also receive the rebate. [S.C. Dep't of Revenue, Press Release, 09/16/19]

South Carolina DOR Publishes Ruling to Federal, State Government Employees, Foreign Diplomats on Sales Tax

 

The South Carolina Department of Revenue (DOR) Sept. 13 published a revenue ruling on the application of the sales and use, and excise tax on sales of tangible personal property and sleeping accommodations for: 1) employees of the federal government, including instrumentalities of the federal government, such as the American Red Cross and federal credit unions; 2) foreign diplomats, including Taipei officials; and 3) employees of nonprofit organizations, state governments, and colleges. The applicability of sales and use tax depends upon whether the government r nonprofit organization is making the purchase or the employee. The purpose of the ruling was to inform retailers that federal government employees are using new credit cards to purchase tangible personal property and sleeping accommodations. The DOR also provided exhibits summarizing the taxability of sales transactions with federal government or federal employees using the card. The ruling took effect Nov. 30, 2018. [S.C. Dep't of Revenue, Revenue Ruling No. RR 19-7, 09/13/19]

South Carolina DOR Issues Revenue Ruling on Sales and Use Taxability of Telephone Service Charges

 

The South Carolina Department of Revenue (DOR) Sept. 13 issued a revenue ruling on the sales and use tax applicability of the Universal Service Fund Surcharge, Dual Party Relay Charge, and 911 Service Charge on customer's telephone bills. The ruling provides that: 1) the Universal Service Fund Surcharge billed by certain telephone service providers is part of the gross proceeds of sales of the providers and is subject to sales and use tax, unless the charges are already exempt from sales and use tax; 2) the Universal Service Fund Surcharge billed by prepaid wireless sellers to customers is not subject to sales and use tax; and 3) the Dual Party Relay Charge and 911 Service Charge billed by a telephone service provider to customers aren't subject to tax. The DOR also attached a chart summarizing the application of the tax to the charges by type of service provider. [S.C. Dep't of Revenue, Revenue Ruling No. RR 19-8, 09/13/19]

Tennessee DOR Publishes FAQ on Requirements for Receiving Franchise, Excise Tax Extension

 

The Tennessee Department of Revenue (DOR) Sept. 13 published a FAQ on the requirements for receiving a corporate income and excise tax extension. The DOR provided that a taxpayer must have paid taxes on or before the original due date to receive a six month extension. The amount paid must be equal to or greater than 90 percent of the current period liability, or 100 percent of the previous period liability annualized to 365.25 days, or $100 if the previous period doesn't exist. [Tenn. Dep't of Revenue, Franchise & Excise Tax FAQs, 09/13/19]

Tennessee SBOE Finds Jack Daniels Whiskey Barrels Eligible for Property Tax Exemption

 

The Tennessee State Board of Equalization (SBOE) Sept. 13 found that Taxpayer's previously unused whiskey barrels qualified for property tax exemption and rescinded the back assessments. Taxpayer timely appealed the assessor's back assessment of its whiskey barrels. Taxpayer contended based on a recently enacted statutory provision that the whiskey barrels were tax exempt. The assessor contended that the barrels were properly back assessed because they were never eligible for the exemption and the statutory provision shouldn't be applied retrospectively. The assessor also contended that the administrative judge lacked the authority to adjudicate the facial constitutionality of a statute. The SBOE: 1) found that the subject barrels met the criteria for "aged whiskey barrels" and therefore qualified for the exemption; and 2) recommended that the assessor's office direct the constitutional argument to a court of competent jurisdiction. Accordingly, the SBOE rescinded the back assessments attributable to the subject whiskey barrels. [Tenn. State Bd. of Equalization, Docket Nos. 117543, 117544, 120742, 09/13/19]

Texas Comptroller Finds Restaurant's Smallware, Dual-Purpose Items Purchases Not Exempt From Sales Tax

 

The Texas Comptroller of Public Accounts Aug. 1 decided to adopt the Administrative Law Judge's (ALJ) recommendation that Tax Division's (Staff) sales and use tax audit be amended only as agreed by the Staff. Taxpayer operated a chain of restaurants in the state. The Staff audited and assessed Taxpayer's liability. Taxpayer requested redetermination, contending that it erroneously paid tax on the purchases of smallware and on exempt dish soap, hand soap, and paper towels (dual-purpose items). The Staff issued an amended assessment. The ALJ found that: 1) the smallware purchases weren't eligible for the resale exemption as they weren't purchased for reselling purpose; and 2) Taxpayer didn't provide documentation to establish that the dual-purpose items were used for exempt purposes. Accordingly, the comptroller adopted the ALJ's recommendation and affirmed the amended assessment. [Tex. Comptroller of Pub. Accts., Comptroller's Dec., Hearing No. 112,818, Accession No. 201908002H, 08/01/19]

Tax Notes

Kentucky Gubernatorial Candidate Commits to Gaming Expansion

 

Kentucky Attorney General and gubernatorial candidate Andy Beshear (D) said he is committed to expanding gaming in the state and using the tax revenues to fund Kentucky’s pension system.

Michigan Sports Betting Bill Mirrors Stalled Internet Gaming Bill

 

A Michigan lawmaker has introduced a bill that would legalize and tax sports gambling at 8 percent, the same tax rate proposed in the recent internet gaming bills opposed by the governor and the state budget office.

D.C. Report Examines Worker Misclassification in Construction Industry

 

District of Columbia construction companies that misclassify workers as independent contractors have lower operating costs than companies that properly classify workers, according to a recent report on payroll fraud and tax evasion in the industry.

Wisconsin Bill Would Double Opportunity Zone Tax Incentive

 

A Wisconsin bill would double the state's Opportunity Zone tax incentive, which lawmakers and economic developers hope will give it an advantage over other states.

Issues Over Wayfair Reference to ‘Undue Burden’ Coming to the Fore

 

A year after the U.S. Supreme Court decided South Dakota v. Wayfair Inc., state tax experts are starting to zero in on the Court’s reference to and reshaping of the concept of “undue burden.”

Nebraska County Approves 'Beatrice 6' Sales Tax

 

A Nebraska county will impose a half-cent sales tax to pay off a $28.1 million court judgment over the wrongful imprisonment of the "Beatrice Six."

California Pot Banking Bill on Hold

 

A California bill to allow specially licensed banks to provide limited services to the state's legal cannabis industry has been put on hold until 2020.

California Legislature Passes Pot Business Expense Deduction Bill

 

A California bill to allow marijuana businesses to claim state income tax deductions against their expenses and state business tax credits now heads to Gov. Gavin Newsom (D) for approval.

Chicago Mayor Turns to Congestion Taxes as Revenue-Raising Option

 

Chicago is turning to a possible congestion tax as an option to address a looming $838 million deficit in 2020.

Arizona High Court Says Online Travel Companies Owe Local Taxes

 

Online travel companies must pay local business activity taxes on the revenue they receive for arranging hotel stays in Arizona, according to the state’s supreme court.

Select State Tax News

Coinetic - a modern cryptocurrency exchange

 

The FINANCIAL -- The world is rapidly growing digital, which leads to modernization of money system to accommodate today’s needs. Information exchange has become simple and instant worldwide,...

Raimondo criticizes General Assembly’s small business program

 

- Facebook Twitter Linkedin Google+ Email Print GOV. GINA M. RAIMONDO sharply criticized the Small Business Development Fund, an investment program created by the General Assembly in...

Series: QTAXT41QTAXCAT3CTNO, State Tax Collections: T41 Corporation Net Income Taxes for Connecticut

 

Source: U.S. Census Bureau   Release: Quarterly Summary of State & Local Tax Revenue   Units:   Millions of U.S. Dollars , Not Seasonally Adjusted Frequency:   Quarterly Notes: The...

Series: QTAXT41QTAXCAT3USNO, State Tax Collections: T41 Corporation Net Income Taxes for the United States

 

Source: U.S. Census Bureau   Release: Quarterly Summary of State & Local Tax Revenue   Units:   Millions of U.S. Dollars , Not Seasonally Adjusted Frequency:   Quarterly Notes: The...

FineFix program launches to help uninsured drivers

 

A new state program will help eligible Marylanders reduce their outstanding uninsured auto fines, eliminating a significant hurdle to registering and insuring their vehicles, according to a Motor...

INSIGHT: Utah Court Refuses to Extend Protections of Foreign Commerce Clause to Individuals

 

The Utah Supreme Court refused to extend protections of the foreign commerce clause to individuals. That can’t be right, can it? In light of the landmark U. S. Supreme Court rulings in Wynne and...

Merrill Lynch Fights Back With Counterclaim Against 529 Plan Challenger

 

Wirehouse Merrill Lynch filed late this past week a counterclaim against an investor who has proposed a class action lawsuit against the wirehouse. In his lawsuit, the investor alleges Merrill Lynch,...

New York state has the ‘craziest’ assessments; Syracuse is average

 

SYRACUSE, N.Y. -- Property assessments in Syracuse are outdated and favor the rich over the poor. But other cities in New York are worse. Outdated assessments in Syracuse and other municipalities...

Syracuse skirts the law by going easy on homeowners with big property gains

 

SYRACUSE, N.Y. – When your house goes way up in value, that’s good news. Unfortunately, it also means you have to pay more in property taxes. But in Syracuse, city officials have an unofficial...

When a Business Has 2 Sets of Books

 

"My spouse and I have been looking to buy a business for some time. We've found a good local business with a great location and lots of existing customers. The seller wants us to pay one and one-half...

Special tax credit sought for donors to Avalon updates

 

#inform-video-player-1 .inform-embed { margin-top: 10px; margin-bottom: 20px; } #inform-video-player-2 .inform-embed { margin-top: 10px; margin-bottom: 20px; } The Avalon Theatre Foundation is...

Normal considers pension shortfalls; council fights over rules

 

NORMAL — Normal officials hope state action can help solve a longstanding local budget problem — and won't cause any more. The town's police and fire pension funds continue to be funded well below...

ASSISTANT U.S. EDUCATION SECRETARY COLLETT TO VISIT KANSAS DURING BACK-TO-SCHOOL TOUR

 

The following information was released by the U.S. Department of Education: As part of the U.S. Secretary of Education Betsy DeVos' 2019 Back-to-School Tour, U.S. Assistant Education Secretary Johnny W. Collett will travel to Wichita and Overland Park,...

REVENUE INTERIM COMMITTEE TO MEET SEPT. 24-25 TO CONTINUE TAX STUDY

 

The following information was released by the Montana Legislature: The Revenue Interim Committee will hold its next meeting on September 24-25 in Room 317 of the Capitol building. The HJ 35 Tax Study Committee, which consists of all members of the...

MyCelx Technologies Corporation Half Year Results -7-

 

A reconciliation of the differences between the effective tax rate and the federal statutory tax rate is as follows: 30 June 30 June 31 December ...

City of London Investment Group PLC FINAL RESULTS -11-

 

======================= ============ ============ ========== ========== Cash and cash Loans and Amortised equivalents receivables cost 19,704,111 19,704,111 ============ ...

Utah man charged with tax fraud, used deceased person's name for over 8 years

 

A Holladay, Utah, man is facing 18 state tax-related fraud charges after using the name of a deceased person in numerous business transactions for over eight years. The State of Utah has charged 75-year-old Dan Roberts with 10 counts of filing false...

Virginia health system sues thousands of patients, seizing paychecks and claiming homes

 

Heather Waldron and John Hawley are losing their house in Blacksburg, Va. Their teenage daughter sold her clothes for spending money. Financial disaster, they say, contributed to their divorce,...

State preparing to issue Mega Millions rebate checks

 

The S.C. Department of Revenue is preparing to issue $61 million in rebate checks to state taxpayers. Qualifying state taxpayers will receive a check for $50 from the department of revenue later...

Tennessee August Revenues Higher Than Budgeted

 

Tennessee revenues were more than the budgeted estimates for the first month of the state’s fiscal year.  Finance and Administration Commissioner Stuart McWhorter Monday reported that overall August...

How Uzbekistan will benefit from Russian version of goods labeling?

 

The Uzbek state will benefit from the introduction of the Russian digital marking system due to increased transparency, fiscal effect and a new easier way of administration, a representative of the Center for Advanced Technology Development of Russia...

Cryptocurrency Provides Payment and Tax Solutions for the Cannabis...

 

A member of the Berkeley City Council has reportedly become the first elected official to purchase cannabis with cryptocurrency. According to , Ben Bartlett of the Berkeley City Council purchased...