Tax Publications


Qualities of a Fair State Tax Administration Part 1 – Independent Appeals

Posted on March 27, 2014. Category: Tax Publications

This is the first in a series of posts about the qualities of a fair state tax administration.  These measurements were used by the Council on State Taxation (COST) to analyze each state’s fairness in administering its taxes.  Their fifth annual report is found here.The first quality, and perhaps the most telling, is the presence or absence of an independent appeals tribunal.  States who can recognize that there is a potential for error or bias in their tax department determinations and who therefore provide an independent means of review are leagues ahead of their...

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Louisiana Enacts Amnesty Program

Posted on March 26, 2014. Category: Tax Publications

The Louisiana Department of Revenue (LDR) has implemented a tax amnesty program applicable to all the taxes they administer except motor fuel taxes and penalties for failing to submit information reports not based on an underpayment of tax.Periods in Which Taxpayers Can File There are two remaining periods in which taxpayers can file for amnesty protection—the amount of penalties and interest waived differs depending on when taxpayers file their submission:   •    At least one month occurring between July 1, 2013 and December 31, 2014 (15% of penalties owed will be waived if approved during this submission period), and ...

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Is Your Company Subject to Sales Tax?

Posted on March 25, 2014. Category: Tax Publications

If your company has recently expanded or begun doing business in a different way, you may have unknowingly triggered an act that subjects you to state or local sales tax.Some of the items that could trigger sales tax nexus include: •    You have opened up offices or business locations in other states •    You have employees or independent contractors traveling or working from home •    You are in the software industry •    You sell a complex variety of services •    You sell both services...

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Drop Shipment Challenges to Sales Tax Compliance

Posted on March 20, 2014. Category: Tax Publications

In sales transactions between two parties, a consumer and a seller, it is generally easy to determine whether to collect sales tax and from whom.  If the seller has nexus and is registered in the consumer’s state, then the seller must collect and remit sales tax in that state (unless the consumer provides an exemption certificate which meets the requirements for that state). When you introduce a third party into the transaction, things can get tricky.  A drop shipment scenario is where you have two sellers and one consumer.  The first seller sells property to...

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Unclaimed Property: Delaware Receives a “D-” Score

Posted on March 16, 2014. Category: Tax Publications

Delaware, “the first state”, may be called the “worst state” when it comes to grades for unclaimed property laws.  The Council on State Taxation (COST) recently assigned a D- to the state.  The full report is found here.Unclaimed property laws were originally implemented to protect consumers and provide a way for them to reunite with their uncashed paychecks, abandoned bank accounts, etc.  Businesses with unclaimed property report and pay that amount to the state, who then seeks to locate the rightful owner and return their property.However, Delaware has managed to make...

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COST Publishes Best & Worst of State Tax Administration Scorecard

Posted on March 16, 2014. Category: Tax Publications

The Council on State Taxation (COST) recently published their fifth annual scorecard on the Best & Worst of State Tax Administration.  Maine and Ohio take top honors as “A” rated states. California and Louisiana come in last with D minuses, and Pennsylvania showed the most improvement in 2013, moving from a D to an A minus.The key factors COST reviewed included:Appeals Process •    Fair appeals forums which include true independence  •    No requirement to pay or post bond prior to hearing  •    Record for appeals...

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Decision to Strike Down Colorado’s “Amazon Law” Thrown Out by Tenth Circuit

Posted on March 06, 2014. Category: Tax Publications

Background Colorado established a sales tax law (Colo. Rev. Stat. §39-21-112(3.5)) requiring any retailer selling $100,000 or more of products to customers located in Colorado who does not collect and remit sales tax in Colorado to: 1) Notify the purchaser of their obligation to report and pay use tax,  2) File an annual report detailing purchases of more than $500 per year and the related customer information, and  3) Advise these customers that this purchase summary will be provided to Colorado’s Department of Revenue.All of this could be avoided if retailers opted to collect and remit tax from...

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What Are Your Chances Of Getting a Sales and Use Tax Audit?

Posted on March 02, 2014. Category: Tax Publications

Three Main Criteria Every company “doing business” in a sales tax jurisdiction, whether registered or not, could potentially get audited.  There are three main criteria that greatly increase your company’s odds:1) A high ratio of exempt sales.  If you are consistently reporting a high ratio of exempt sales, it means you’d better have a good exemption certificate management process in place.  States like to catch companies who don’t.  Not only should you be collecting these certificates, but also they need to be validated for accuracy, updated when expired,...

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Internal Revenue Service Appoints New Deputy Commissioner

Posted on March 01, 2014. Category: Tax Publications

New Commissioner The Internal Revenue Service announced on August 26, 2013 the appointment of a new Deputy Commissioner for Services and Enforcement.   John M. Dalrymple has been with the IRS for 31 years and started his new role on September 16, 2013.  He has previously served as IRS Deputy Commissioner for Operations Support from 2003-2006.  This position is a career civil service position reporting directly to the IRS Commissioner.Functional Role As the Deputy Commissioner for Services and Enforcement, Mr. Dalrymple will oversee nine operating divisions or offices: •    Wage & Investment Division •    Large Business...

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California Manufacturing Exemption

Posted on March 01, 2014. Category: Tax Publications

In an effort to drum up business development in the Golden State, California sales and use tax will be exempted from the gross receipts of businesses that sell, use, or consume tangible personal property (TPP) via manufacturing, processing, refining, fabricating, research and development, certain contracting usage, and sale or purchase of bio-technology equipment. The exemption aims to eliminate the 7.5% California state sales and use rate for taxpayers and promote business development for the next near-decade.  It’s important to mention that other taxes may still apply on these transactions.  These sales are not exempt from local California...

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