News

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]

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]

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]

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]

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]

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]

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]

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]

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]

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]