News & Publications
In Case You Missed It: Last Week in Allyn Tax News
Maryland Ruling: Interstate Commerce Exemption for Aircrafts
Maryland’s Court of Special Appeals recently ruled that a taxpayer’s purchase of an aircraft was not exempt from sales and use tax as interstate commerce. The aircraft was purchased by the taxpayer in Ohio and then stored in the taxpayer’s state of resident, Maryland. The aircraft was primarily used by the taxpayer’s son for flight lessons to prepare for certification as a commercial airline pilot. The taxpayer also used the aircraft to commute to New York for his job.
Maryland law states that the purchase of an aircraft is only exempt from sales and use tax it is principally used to cross state lines in interstate or foreign commerce. Since the taxpayer purchased the aircraft for personal use, he is required to remit taxes.
Cable Television Services in Colorado: Taxable or Exempt?
The Colorado Department of Revenue (CDOR) has issued a private letter ruling that the taxpayer’s sales of basic television service packages, premium channels, sports packages, pay-per-view events, and various other cable TV content and products were not subject to sales and use taxes.
Colorado’s sales tax applies to sales of tangible personal property (TPP) and certain limited services. When bundled transactions with both TPP and non-tangible services occur, a true object test must occur in order to properly characterize the transaction. Using the true object test here, the CDOR concluded that the taxpayer’s bundled transactions were more rightfully assessed as a service, which are usually non-taxable in Colorado.
From a business perspective, bundled transactions can make sense in order to appropriately advertise and sell products as well as to increase revenue. Also, bundled transactions can reduce the administrative burden of itemizing each product in a sale and separately determining and applying sales tax. Businesses should be aware of the tax complications that may occur due to incorrectly classifying a bundled transaction and seek professional help if the taxability is unclear.
Sales Tax Relief for Sellers of Meals in Connecticut
The Connecticut Department of Revenue Services (DRS) has issued additional guidance for sellers of meals that may be eligible for a tax benefit authorized by recently enacted legislation. Under this legislation, certain sellers of meals are allowed to retain sales tax that they collect on sales of meals during a specific period of time.
In order to qualify, the seller must make sales of meals and be induced in Sector 72 of the NAICS 2017 edition. Once a seller determines that they are qualified, the seller can retain sales tax collected in any one of the following periods, as chosen by the seller: 8/1/2021-8/7/2021; 12/12/2021-12/18/2021; or 5/15/2022-5/21/2022. Qualified sellers are advised to monitor their sales activity to determine the best time to request this unique tax benefit.
New Jersey to End COVID-19 Temporary Suspension Period for Nexus
As a result of the COVID-19 pandemic some New Jersey employees were required to work from home. The state temporarily waived the Sales Tax nexus standard which is generally met if an out-of-State seller has an employee working in New Jersey. This meant that if the out-of-state seller did not maintain physical presence other than the employees working from home in New Jersey solely due to the pandemic and was below the economic activity thresholds enacted by P.L. 2018, c. 132, the Division did not consider the out-of-State seller to have nexus for Sales Tax purposes during this waiver time period.
The waiver will no longer be applicable on or after October 1, 2021. On and after this date the pre-pandemic Sales Tax nexus will resume. If an out-of-state seller has an employee working from home in New Jersey this will be considered physical presence nexus.
Paid Subscription Programs in Colorado: Taxable or Exempt?
The Colorado Department of Revenue (CDOR) has issued a private letter ruling concluding that a taxpayer's sales of its paid subscription program is subject to sales and use tax but not its free, one-month trials. The taxpayer offers a paid subscription program where customers may sign up for a free one-month trial, or pay a fee, to access certain benefits associated with shopping on its website during the subscription period. Colorado imposes a sales tax on the price paid or charged on all sales and purchases of tangible personal property at retail. The method of delivery, including delivery by electronic download or Internet streaming, does not impact the taxability of a sale of tangible personal property.
CDOR concluded that the company’s sale of the Paid Subscription Program to Colorado customers is subject to Colorado state and state-administered local sales because when a customer purchases the program, the customer has immediate access to a variety of digital products and, as such, receives tangible personal property in exchange for consideration paid to the retailer.
How Can We Help?
Allyn’s tax team is staffed with seasoned tax professionals experienced in all aspects of Federal, multi-state and local tax compliance and consulting for large US and global corporations. We use that experience to your advantage.
Here at Allyn, we pride ourselves on our ability to always “stay on top of it”. We use the latest in tax software and create a unique, rigorous process for each and every client’s needs, ensuring that nothing slips through the cracks. Our team is equipped to assess in-advance and quickly resolve all tax issues that a business may encounter, allowing our clients to confidently focus on what they do best.
Allyn Tax offers a full scope of corporate tax services across North America, encompassing business tax compliance and consulting, audit defense and support, nexus reviews and registrations, exemption certificate management, overpayment reviews, and mail processing solutions.
Contact us and we can provide a customized cost-effective solution to meet your company’s needs. For further information on Allyn Tax services, please contact: firstname.lastname@example.org.
For More Information
If you are interested in learning more about this topic or other tax topics, please visit our Tax Publications under News & Publications at www.allynintl.com.
Contributor: Courtney Sboro
About Allyn International
Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance. Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North and South America, Europe and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China, Prague, Czech Republic, and Dubai, U.A.E. For more information, visit www.allynintl.com.