Monday, August 20, 2012
New York - Great news! - Shipping Materials Exempt From Tax
On August 16, 2012, New York court overturned Tax Tribunal decision and ruled in the favor of United Parcel Service, Inc. (“UPS”).
UPS provided shipping supplies (i.e. envelopes, boxes, stickers and pouches) to its customers free of charge. The supplies which contained the Company’s logo were designed for customers using the Company’s air delivery services and are intended to promote the company’s brand, as well as its share of the air delivery market.
The Court ruled the shipping materials that UPS provided to its customers were exempt from tax as promotional materials. For more information on how UPS, Inc. v. Tax Appeals Tribunal of the State of New York (Aug. 16, 2012), impacts your company's operations in the state of New York, please contact Karen Lake at 305.960-1202.
Monday, April 9, 2012
Florida Increases Corporate Income Tax Exemption
Florida increased exemption on corporate income tax, as well as the exemption on Florida’s bank/savings associations franchise tax, from $25,000 to $50,000 of net income. The exemptions are effective Jan. 1, 2013.
The enacted legislation also contains a number of sales/use tax provisions designed to encourage economic development, such as lowering to 5% the productive output increase required to exempt the purchase of machinery and equipment, and declaring an upcoming sales tax holiday period.
The enacted legislation also contains a number of sales/use tax provisions designed to encourage economic development, such as lowering to 5% the productive output increase required to exempt the purchase of machinery and equipment, and declaring an upcoming sales tax holiday period.
Monday, November 28, 2011
California State Boad of Equalization issues "FAQs" on New Click-Through Nexus
The California State Board of Equalization (SBE) has issued guidance in the form of “Frequently Asked Questions” on recently enacted law. http://www.boe.ca.gov/sutax/abx1-28faq.htm
Assembly Bill 155 retroactively repealed and then reenacts with delay the “click-through” nexus and remote seller collection requirements that were enacted earlier this year on June 28, 2011.
These new law provisions will not become operative until either September 15, 2012, or January 1, 2013, depending on the status of certain federal and state legislation.
Friday, August 6, 2010
Massachusetts: State high court ruled for taxpayer!
In a recent sales/use tax case Massachusetts high court held company did not need to produce the final product in order for it to qualify for the state's research and development manufacturing exemption.
Onex Communications Corp. v. Commissioner, Mass. (7/30/10). The Massachusetts Supreme Judicial Court affirmed that a microchip company’s purchased items constituted exempt materials, machinery and replacement parts used directly and exclusively in research and development (R&D), because the company qualified as a “manufacturing corporation.” Under the facts, the company’s engineers drafted intricate electronically-stored “blueprints” to direct the:
Physical construction of an innovative communications microchip from raw silicon, and Embedding of the software into the hardware.
The department argued that the company was not a “manufacturing corporation” during the audit period, because at the end of that period it had not achieved creation of its microchip “finished product.”
The Court agreed with Appellate Tax Board and Court of Appeals that such a “finished product” limitation does not exist under the R&D exemption statute and that a “manufacturing corporation” need only be engaged in activities that are essential and integral to the total manufacturing process to qualify.
Onex Communications Corp. v. Commissioner, Mass. (7/30/10). The Massachusetts Supreme Judicial Court affirmed that a microchip company’s purchased items constituted exempt materials, machinery and replacement parts used directly and exclusively in research and development (R&D), because the company qualified as a “manufacturing corporation.” Under the facts, the company’s engineers drafted intricate electronically-stored “blueprints” to direct the:
Physical construction of an innovative communications microchip from raw silicon, and Embedding of the software into the hardware.
The department argued that the company was not a “manufacturing corporation” during the audit period, because at the end of that period it had not achieved creation of its microchip “finished product.”
The Court agreed with Appellate Tax Board and Court of Appeals that such a “finished product” limitation does not exist under the R&D exemption statute and that a “manufacturing corporation” need only be engaged in activities that are essential and integral to the total manufacturing process to qualify.
Monday, July 19, 2010
Washington - Revised Rule Limits Bad Debt Refund
Washington Department of Revenue has issued an emergency amended rule (Rule 196), which limites application of bad debt refunds.
The new law which amends rule WAC 458-20-196, states that Washington’s sales tax “bad debt” deduction may only be claimed by the actual seller after June 30, 2010
The new law clarifies that the seller’s right to claim a credit or refund is not assignable. If the original seller in the transaction that generated the bad debt has sold or assigned the bad debt instrument to a third-party with recourse, the original seller may claim a credit or refund under statute, but only after the debt instrument is reassigned by the third-party to the original seller.
The amended rule specifically recognizes that only the original seller in the transaction that generated the bad debt, or a certified service provider used by the seller, may claim a retail sales/use tax credit or refund on or after July 1, 2010.
The new law which amends rule WAC 458-20-196, states that Washington’s sales tax “bad debt” deduction may only be claimed by the actual seller after June 30, 2010
The new law clarifies that the seller’s right to claim a credit or refund is not assignable. If the original seller in the transaction that generated the bad debt has sold or assigned the bad debt instrument to a third-party with recourse, the original seller may claim a credit or refund under statute, but only after the debt instrument is reassigned by the third-party to the original seller.
The amended rule specifically recognizes that only the original seller in the transaction that generated the bad debt, or a certified service provider used by the seller, may claim a retail sales/use tax credit or refund on or after July 1, 2010.
Monday, June 28, 2010
Colorado Reportable and Listed Transaction Disclosure
In today's Blog, I address the timing of taxpayer disclosure, highlighting the upcoming July 1, 2010 deadline for tax returns filed after June 1, 2009.
Overview
On April 2, 2009, Colorado adopted House Bill 09-1093, which require taxpayers to disclose participation in "reportable' and "listed transactions'. taxpayers subject to these disclosure provisions include corporations, individuals, estates, trusts, partnerships, S Corporations and other entities required to file an income tax return under Col. Rev. Sta. Sec. 39-22-601.
The new law also requires "material ad visors" to disclose reportable and listed transactions and maintain a list of persons advised with respect to such transactions. Significant taxpayers and material advisor penalties are imposed for failure to comply with these requirements.
Definition
Colorado Listed Transaction
For Colorado purposes a "listed transactions" also includes a "transaction" between a captive real estate investment trust and its more than 50% beneficial owner, and a transaction between a captive regulated investment company and its more than 50% beneficial owner. Pursuant to Colo. Code Reg. sec. 39-22-652(2)(b), these transactions are referred to as "Colorado Listed Transactions' where the relevant tax returns "reflect a Colorado tax benefit".
Taxpayer Disclosure Requirement
Disclosure Timing
Under the general rule, for each tax period in which a taxpayer participates in a Federal Transaction or a Colorado Listed Transactions, including participation for any prior period that is still open for assessment under the statute of limitations, the taxpayer is required to disclose that participation with its next filed tax return. For any return filed after June 1, 2009, a taxpayer should disclose with its return participation in any Federal Transaction or a Colorado Listed Transaction, including any participation for prior periods still open for assessment. For any return made after June 1, 2009, disclosure will be considered timely so long as that disclosure is made by July 1, 2010.
Taxpayer Penalties
A taxpayer who fails to disclose a reportable transaction is subject to a penlaty of up to $15,000. A taxpayer who failes to disclsoe a listed transaction is subject toa penalty of up to $50,000. these penalties are in additin to any other penalties that may be imposed, but may be wavied, reduced or compromised by the Colorado Department of Revneu upon showing of reasonable cause.
Overview
On April 2, 2009, Colorado adopted House Bill 09-1093, which require taxpayers to disclose participation in "reportable' and "listed transactions'. taxpayers subject to these disclosure provisions include corporations, individuals, estates, trusts, partnerships, S Corporations and other entities required to file an income tax return under Col. Rev. Sta. Sec. 39-22-601.
The new law also requires "material ad visors" to disclose reportable and listed transactions and maintain a list of persons advised with respect to such transactions. Significant taxpayers and material advisor penalties are imposed for failure to comply with these requirements.
Definition
Colorado Listed Transaction
For Colorado purposes a "listed transactions" also includes a "transaction" between a captive real estate investment trust and its more than 50% beneficial owner, and a transaction between a captive regulated investment company and its more than 50% beneficial owner. Pursuant to Colo. Code Reg. sec. 39-22-652(2)(b), these transactions are referred to as "Colorado Listed Transactions' where the relevant tax returns "reflect a Colorado tax benefit".
Taxpayer Disclosure Requirement
Disclosure Timing
Under the general rule, for each tax period in which a taxpayer participates in a Federal Transaction or a Colorado Listed Transactions, including participation for any prior period that is still open for assessment under the statute of limitations, the taxpayer is required to disclose that participation with its next filed tax return. For any return filed after June 1, 2009, a taxpayer should disclose with its return participation in any Federal Transaction or a Colorado Listed Transaction, including any participation for prior periods still open for assessment. For any return made after June 1, 2009, disclosure will be considered timely so long as that disclosure is made by July 1, 2010.
Taxpayer Penalties
A taxpayer who fails to disclose a reportable transaction is subject to a penlaty of up to $15,000. A taxpayer who failes to disclsoe a listed transaction is subject toa penalty of up to $50,000. these penalties are in additin to any other penalties that may be imposed, but may be wavied, reduced or compromised by the Colorado Department of Revneu upon showing of reasonable cause.
Thursday, June 24, 2010
Kansas: Amnesty Program Enacted
Kansas: Amnesty Program Enacted
TIME PERIOD
Legislation (Senate Bill 572, signed May 27, 2010) establishes a tax amnesty program to be held from September 1, 2010, through October 15, 2010.
APPLIES TO WHICH TAXES
The program applies to a myriad of Kansas taxes, including sales and use, income, and withholding taxes.
Amnesty is available for tax liabilities due and unpaid for tax periods ending on or before December 31, 2008.
TAXES NOT ELIGIBLE
Amnesty is not available for (1) taxes resulting from an audit if the taxpayer received notification as to the starting date of the audit prior to September 1, 2010, or (2) taxes due as a result of an audit that is underway as of September 1, 2010.
Also not eligible are taxes for which an assessment or proposed assessment has been issued as of September 1, 2010, or assessments that are being appealed administratively or judicially as of that date.
PROCEDURE
Eligible taxpayers that file all required returns and pay all taxes due by the close of the amnesty program will receive a waiver of all penalties and interest otherwise due.
Taxpayers should be aware that participation in the amnesty program constitutes relinquishment of all administrative and judicial rights of appeal with respect to taxes eligible for amnesty. In addition, no tax payments received as a result of the amnesty program are eligible for refunds or credits.
TIME PERIOD
Legislation (Senate Bill 572, signed May 27, 2010) establishes a tax amnesty program to be held from September 1, 2010, through October 15, 2010.
APPLIES TO WHICH TAXES
The program applies to a myriad of Kansas taxes, including sales and use, income, and withholding taxes.
Amnesty is available for tax liabilities due and unpaid for tax periods ending on or before December 31, 2008.
TAXES NOT ELIGIBLE
Amnesty is not available for (1) taxes resulting from an audit if the taxpayer received notification as to the starting date of the audit prior to September 1, 2010, or (2) taxes due as a result of an audit that is underway as of September 1, 2010.
Also not eligible are taxes for which an assessment or proposed assessment has been issued as of September 1, 2010, or assessments that are being appealed administratively or judicially as of that date.
PROCEDURE
Eligible taxpayers that file all required returns and pay all taxes due by the close of the amnesty program will receive a waiver of all penalties and interest otherwise due.
Taxpayers should be aware that participation in the amnesty program constitutes relinquishment of all administrative and judicial rights of appeal with respect to taxes eligible for amnesty. In addition, no tax payments received as a result of the amnesty program are eligible for refunds or credits.
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