Latest COST Conscious

ISSUE 19-22; November 1, 2019

TODAY’S TOPIC: Company Travel Budgets – We periodically ask our member companies about their travel policies for conferences, continuing education, and other meetings. We would like to compare the current policies of member companies on this issue with the previous responses. Which of the following statements best describes your company’s current approach to employee travel?

Latest Practitioner Connection

ISSUE 19-22; October 25, 2019

The Council On State Taxation’s “Practitioner Connection” is a biweekly publication that provides a list of upcoming meetings, webcasts, and video conferences offered by COST Practitioner Connection members and excerpts of all articles posted in the last two weeks by practitioners on the COST website. To access the articles contained within this publication, please sign onto the COST website prio


Uber, Lyft Tax Passes in San Francisco


San Francisco users of rideshare services including Lyft Inc. and Uber Technologies Inc. will be paying more starting in January, when a voter-approved ballot measure takes effect.

Puerto Rico Sees Job Creation After Corporate Tax Breaks


Puerto Rico’s plan to boost the export of services from the island created 36,222 jobs since 2012, when lawmakers enacted tax breaks to increase such business activity, according to the commonwealth’s commerce department.

Alabama DOR Issues Memorandum on Legislative Changes Concerning Motor Vehicle Registration Records


The Alabama Department of Revenue Nov. 8 published a memorandum on legislative changes affecting motor vehicle registration records, for excise tax purposes. As a follow-up to the Rebuild Alabama Act Memo, registration validation edits are added to the registration record update routine to identify omitted or incorrect fuel types in the registration error report. The memorandum lists the fuel types that must be included in the motor vehicle registration record (except with regard to trailers), and provides a link to the updated registration record format. [Ala. Dep't of Revenue, Memorandum 2019-006, 11/08/19]

Arkansas Appeals Office Finds Finance Department Correctly Assessed Sales Tax on Vehicle Purchase


The Arkansas Office of Hearings and Appeals (OHA) Nov. 8 found that Taxpayer was liable for sales and use tax on the purchase of a motor vehicle. Taxpayer purchased a vehicle, but didn't register or pay tax on it. The Department of Finance and Administration (DFA) issued a notice of the proposed assessment assessing tax, a late payment penalty, and interest. Taxpayer claimed that she voluntarily returned the vehicle to the seller because she was unable to afford and tag it. The DFA noted: 1) Taxpayer took ownership and possession of the vehicle; 2) the sale of tangible personal property was subject to sales tax; 3) the documentation provided by Taxpayer was insufficient to establish a rescinded sale occurred; and 4) the DFA properly assessed the penalty and interest. Accordingly, the OHA sustained the DFA's assessment. [Ark. Dep't of Fin. & Admin., Docket No. 20-233, 11/08/19]

Arkansas Appeals Office Finds Taxpayer Not Eligible for Sales Tax Credit, Sustained Finance Department Assessment


The Arkansas Office of Hearings and Appeals (OHA) Nov. 8 found Taxpayer wasn't liable for a sales and use tax credit on a motor vehicle purchase, sustaining the Department of Finance and Administration's (DFA) assessment. The DFA determined that Taxpayer purchased a new vehicle and didn't sell a used vehicle within 45 days as required by law to claim the trade-in credit. The DFA issued a title of suspense and a notice of proposed assessment. Upon review, the OHA found: 1) Taxpayer didn't prove the new vehicle's delivery was delayed; 2) Taxpayer received the new vehicle April 16, and sold the old vehicle 67 days after the purchase date; and 3) Taxpayer didn't prove entitlement to the motor vehicle tax credit. Accordingly, the OHA sustained the DFA's assessment. [Ark. Dep't of Fin. & Admin., Docket No. 20-140, 11/08/19]

Arkansas Appeals Office Finds Taxpayer Repair Services, Replacement Parts Subject to Sales and Use Tax


The Arkansas Office of Hearings and Appeals (OHA) Nov. 6 sustained the Department of Finance and Administration's (DFA) sales and use tax assessments. Taxpayer sold machinery and equipment, replacement parts, and repair services. The DFA asserted Taxpayer's repair and maintenance services were subject to sales tax and the replacement parts were subject to use tax. Taxpayer conceded its repair services were taxable, but stated it was entitled to two exemptions, including an exemption for replacement of certain directly used manufacturing machinery and equipment. The OHA noted: 1) Taxpayer couldn't be exempt from sales tax in the absence of an exemption claim from its customers on the purchases; and 2) Taxpayer didn't prove that the replacement of any of the purchased components represented substantial replacement of all the components of its machinery. After the concessions agreed to by the DFA, the OHA sustained the remaining assessment. [Ark. Dep't of Fin. & Admin., Opinion Nos. 20-155, 20-156, 11/06/19]

Arkansas Appeals Office Finds Taxpayers Didn't Abandon Domicile, Liable for Individual Income Tax, Penalty, Interest


The Arkansas Office of Hearings and Appeals (OHA) Nov. 4 sustained the Department of Finance and Administration's (DFA) individual income tax assessment. Taxpayers failed to file a return or submit proof indicating that they weren't required to file the return. Auditors conducted a tax audit and issued a notice of proposed assessment with interest and penalty. Taxpayers protested, stating that they moved to another state. The OHA found that Taxpayers: 1) were domiciled within the state prior to the purchase of a home in another state; 2) retained substantial connections with the state by retaining drivers' licenses, vehicle registrations, and voter registration within the state; 3) didn't establish that they abandoned their domicile or that the DFA's returns and assessments were incorrect; and 4) didn't establish the accuracy of farming expenses that resulted in a farming loss. Therefore, the OHA sustained the assessment. [Ark. Dep't of Fin. & Admin., Docket Nos. 20-029 et al., 11/04/19]

Arkansas Finance Department Secretary Finds Appeals Office Erred in Reversing Income Tax Negligence Penalty


The Arkansas Secretary of the Department of Finance and Administration (DFA) Oct. 31 reversed a decision of the Office of Hearings and Appeals (OHA) concerning an individual income tax negligence penalty. Taxpayers operated a farm at their residence and reported net farm losses on Schedule F for 10 consecutive years. The DFA audited Taxpayers, disallowed the losses for three years, and assessed a negligence penalty. Taxpayers protested and the OHA reversed the penalty and found the fourth factor of IRC Section 138 weighed in favor of Taxpayers. The DFA sought revision and the Secretary found that: 1) reversal of the penalty wasn't supported by appropriate reasoning or analysis; 2) negligent misuse of Schedule F deductions allowed Taxpayers to claim net farming losses for ten consecutive years; and 3) OHA erred in analyzing factor four of the IRC Section 183. Therefore, the DFA reversed and modified the OHA's decision. [Ark. Dep't of Fin. & Admin., Docket Nos. 19-096, 19-097, 19-098, 10/31/19]

California Appeals Office Affirms FTB Assessment, Finds Taxpayer Negligent in Filing Returns


The California Office of Tax Appeals (OTA) Sept. 18 affirmed the Franchise Tax Board's (FTB) assessment of additional individual income tax and penalties, since Taxpayers didn't act with due care filing their return. Taxpayers used tax preparation software and alleged it didn't alert them when their 2015 return was rejected. Taxpayers filed an appeal against the FTB's denial of their refund claim for the late-filing penalty. The OTA found: 1) Taxpayers didn't file the 2015 return until 2017, more than 13 months after the due date; 2) the software gave notice of unsuccessful filing, affording Taxpayers an extension to file; and 3) Taxpayers didn't describe any efforts taken to file the return under the extension. Accordingly, the OTA sustained the FTB's assessment. [Cal. Office Tax App., Case No. 18010744, 09/18/19]

California Appeals Office Affirms FTB's Assessment, Finds Taxpayer Didn't File State Return


The California Office of Tax Appeals (OTA) Sept. 17 affirmed the Franchise Tax Board's (FTB) assessment of corporate income tax, penalties, and interest against Taxpayer. Taxpayer, a Delaware corporation, filed a federal income tax return but didn't file a California state return. The FTB assessed tax, penalties, and interest. Taxpayer protested, the FTB affirmed the assessment, and Taxpayer appealed. The OTA found: 1) the assessment wasn't reasonable, since it didn't allow a deduction for compensation paid; 2) Taxpayer didn't establish reasonable cause for not filing a return, so it wasn't entitled to a late-filing or demand penalty abatement; and 3) Taxpayer didn't allege or prove unreasonable delay or error by the FTB, so it wasn't entitled to an interest abatement. Accordingly, the OTA modified the assessment to allow a compensation deduction, and sustained the FTB's proposed assessment with interest and penalties. [Cal. Office Tax App., Case No. 18042977, 09/17/19]

Tax Notes

Massachusetts House to Vote on Vaping Tax, Flavored Tobacco Ban


Massachusetts legislators will vote November 13 on a bill taxing e-cigarettes and banning flavored tobacco.

Connecticut Municipalities Looking to Tackle Property Tax Relief


The Connecticut Conference of Municipalities is working to develop a comprehensive property tax relief initiative meant for the 2020 ballot.

Boston Coalition Proposes Statewide Gas Tax Increase


A coalition of Boston business leaders has called for Massachusetts to increase its gas tax to help fund transportation expenses.

Pennsylvania Enacts Uniform Definition of Blight


Pennsylvania’s statutes will now rely on a uniform definition of blighted property, paving an easier path forward for redevelopment tax credits.

Pennsylvania Governor Approves Repeal of Expired Property Tax


Pennsylvania Gov. Tom Wolf (D) has approved legislation repealing an expired property tax, eliminating fears that the law could be used to implement a wealth tax in the state.

Massachusetts Mulls Proposed Changes to NOL Regulation


The Massachusetts Department of Revenue will hold a December hearing on updating its net operating loss deduction and carryforward regulation.

Circuit Court Upholds Millions in Cigarette Tax Penalties Against UPS


The Second Circuit reduced a penalty against UPS for knowingly shipping untaxed cigarettes from Native American reservations throughout New York state and New York City, but still upheld nearly $100 million in penalties and taxes.

New Jersey Proposed Rules on Market-Based Sourcing Imminent


The New Jersey Division of Taxation’s proposed market-based sourcing regulations will likely be published the week of November 11 for formal comment, according to division Director John Ficara.

Texas School District Can’t End-Run Voters on Homestead Exemption


A Texas school district’s decision to reduce its homestead property tax exemption just before voters ratified a constitutional amendment prohibiting such a reduction violates state law and is void, according to a state appellate court.

New Mexico Court Denies Deduction for Natural Gas Purchases


A utility company’s purchases of natural gas used to produce electricity do not qualify for a statutory tax deduction that covers chemical sales, a New Mexico appellate court has ruled.

Select State Tax News

Franchise Group, Inc. Announces Relisting on Nasdaq


AMERICAN DAILY STOCK REPORT Corporate Wire Date: 12 November 2019 17:29 EST ORIGINAL ANNOUNCEMENT [Text] VIRGINIA BEACH, Va., Nov. 12, 2019 -- Franchise Group, Inc. (OTC PINK: FRGA) ("Franchise...

Third Quarter 2019 Results


HEALTH INSURANCE INNOVATIONS INC ("HIIQ-Q") - Third Quarter 2019 Results Health Insurance Innovations, Inc., a leading cloud-based technology platform and distributor of affordable health insurance,...

Habitat grant helping provide new home for local Veteran, family


ROGERSVILLE — Hawkins Habitat for Humanity will receive $15,500 in grant funding by Habitat for Humanity of Tennessee to build one new home in Hawkins County, TN. The funding comes as part of a...

Residents, business owners speak out about proposed food, beverage and alcohol tax


The final decision on a possible 2% food, beverage and alcohol tax in Quincy is now just one week away. Aldermen are taking into consideration feedback heard at Monday’s city council meeting. As...

SC bill would exempt military retirees from paying state income taxes


COLUMBIA, S.C. (WIS/WVLT) -- South Carolina lawmakers are considering legislation that would exempt military retirees from paying state income taxes. According to WIS , right now in South...

2-1-1 San Diego receives grant for California tax credit outreach


San Diego’s resource and information hotline has been awarded $376,000 in grant funds to help support and increase awareness of state tax credits for working families, officials said Tuesday. The...

South Carolina cashes in with $2 billion extra in budget


COLUMBIA, S.C. (AP) — South Carolina lawmakers will again have a significant amount of extra money to spend in next year's budget. Economists are estimating a nearly $2 billion increase in the...

Kane County Board bans recreational pot sales in unincorporated areas


Kane County wants to reap the potential tax revenue benefits of legal, recreational marijuana use, but officials don't want to bear any potential increased law enforcement costs. With that in mind,...

Moldova Tax Agency Issues FAQ on Withholding Tax for Surface Use Agreement Income


The Moldovan State Tax Service Nov. 7 clarified in an FAQ that...

Analysts: State revenues holding firm, plastic bag fees are down


Despite ongoing public fear of a national recession, state revenues largely remained constant, according to a new report Tuesday from fiscal analysts. General Fund revenues for the fiscal year...



The following discussion and analysis should be read in conjunction with the consolidated financial statements and related notes and with the statistical information and financial data appearing in...

First Trust Advisors L.P. Announces Distributions for Exchange-Traded Funds


:: Newbridge Securities November 12, 2019 - 4:35 PM EST First Trust Advisors L.P. Announces Distributions for Exchange-Traded Funds 2019-11-12T16:35 ...

States' Internet Tax Grab Going Well--for Them


States have a lot to be thankful for as we approach the busiest shopping season of the year, because the Supreme Court’s South Dakota v. Wayfair decision is flooding state tax coffers.   On June...

More Bad News! Tori Spelling Owes Over $1 Million In Taxes Amid ‘90210’ Cancellation


Tori Spelling lost a source of income when BH90210 was canceled after only one season. can exclusively reveal just how dire the paychecks were, as she continues to owe a whopping...

Moana Surfrider, A Westin Resort & Spa To Embark On Global Journey To Welcome 2020


The Moana Surfrider, A Westin Resort & Spa is taking guests around the world to welcome the new decade. The “Around the World” New Year’s Eve extravaganza is set for Tuesday, December 31 at 8...

Lawmakers face call to grow government with higher tax revenue


The group that creates budget estimates for the state of Kansas revised its tax revenue numbers last week, estimating the state will collect $525.5 million more than previously estimated over the...

FBO Profile: FlyAdvanced, Wilmington, Delaware


With Delaware’s favorable corporate tax policies, it’s little wonder that the state’s business aviation traffic stands in contrast to its small size. Sixty-five percent of all Fortune 500 companies...

Volunteers sought for income-tax assistance program


Volunteers are needed for the 2020 VITA — Volunteer Income Tax Assistance program. If you are good with numbers and enjoy working with people, you can help people in your community prepare and file...

Utah Justices Put Foreign Commerce Clause Protections In Doubt


The Utah Supreme Court’s finding that corporations, but not individuals, enjoy dormant foreign commerce clause protections from discriminatory state taxation has raised serious questions about the...

South Carolina lawmakers considering bill that would exempt military retirees from paying state income taxes


. (Source: Jason Raven) COLUMBIA, S.C. (WIS) - Corporal Steven Diaz proudly calls South Carolina home. The United States Marine Corps veteran said some veterans are passing up...