Last Week in Tax News (June 19-23)

Tax Holiday

L. 2023, S56 (Act 288), effective 07/01/2023, reinstates the Second Amendment sales tax holiday. Under the current law, the Annual Louisiana Second Amendment Weekend Holiday exempts the sale of eligible firearms, ammunition, and hunting supplies from state sales and use tax on the first weekend of September. However, the current holiday for state sales tax is suspended until September 2025. The legislation adds the Second Amendment state sales tax holiday to the list of currently applicable tax exemptions but provides that hunting supplies will not include the purchase of animal feed, float tubes, off-road vehicles such as ATVs, or vessels such as airboats.

Can We Fix It? Yes, We Can!

The Washington Department of Revenue has provided guidance on when retail sales tax applies to charges for the repair of goods damaged while in transit to a Washington customer. Charges for repair services performed on goods damaged in transport are not subject to retail sales tax if the owner of the goods is in the business of selling the goods at retail to consumers and provides the repairer a Reseller Permit certifying the goods are for resale in the regular course of the owner's business activities. The repairer that provides repair services to the owner of the damaged goods is taxable under the wholesaling B&O tax classification. If repair services are performed for a shipper, carrier, or owner that is not in the business of selling the goods at retail to consumers, the sale of the repair work is a "sale at retail" and is reported under the retailing B&O tax classification and is subject to retail sales tax. If the retail sales tax is not collected by the repairer, the purchaser's use of the repair work is subject to use tax.

Let’s Talk Nexus

The U.S. Supreme Court has declined to review a North Carolina Supreme Court case that reversed the trial court's decision that sales of printed materials produced by the Wisconsin-based taxpayer out-of-state and shipped to its customers and their designees located within North Carolina lacked a sufficient nexus to North Carolina for the imposition of state sales tax under the U.S. Constitution's Commerce Clause in light of the U.S. Supreme Court's decision in McLeod v. J.E. Dilworth Co., U.S. S. Ct., 322 U.S. 327 (1944). In Dilworth, the U.S. Supreme Court held that a state may not tax sales that occur outside its borders, even when the purchased goods are ultimately delivered into the taxing state. The North Carolina Supreme Court declined to follow Dilworth based on the U.S. Supreme Court's subsequent decisions in Complete Auto Transit, Inc. v. Brady, U.S. S. Ct., 430 U.S. 274 (1977) and South Dakota v. Wayfair, Inc., U.S. S. Ct., 138 S. Ct. 2080 (2018).

Time To Go Digital

According to the 2023 Texas House Bill No. 1228, electronic communications are available by selection of the property owner, rather than by mutual agreement between the owner and local tax officials. The tax officials must create a system to allow property owners to choose if they want to be part of the electronic delivery. The bill also requires a chief appraiser, if requested by the property owner, to provide without a fee a copy of the records, supporting data, schedules, and other information the owner or agent is entitled to under the law. Provisions relating to electronic delivery take effect January 1, 2024, and apply to the 2024 tax year in counties with a population of 120,000 or more, and in tax year 2025 in counties with populations less than 120,000.

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