In Case You Missed It: Last Week in Allyn Tax News (August 30 - September 3)

Posted on September 07, 2021

Lawn Care in Arkansas: Taxable or Exempt?

Lawn mowing services provided to a company that leases houses as vacation rentals are not subject to sales tax because these properties are considered to be residential property. The character of the property determines whether the lawn services are subject to sales tax.

If both taxable and non-taxable services are provided to the same customer, the services should be separately stated on the invoice issued to the customer.

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.

Local Tax Rate Changes in Alabama and Oklahoma

Effective September 1st, 2021, Monroe County, AL will be increasing its general sales and use tax rate from 2.5% to 3.5%

Effective October 1st, 2021, several counties in Oklahoma will also be increasing their general sales and use tax rate. Braman County sales and use will increase from 3% to 4%. Jones County will increase from 4% to 5%. Locust Grove County will increase from 4.5% to 5%. Lastly, Harrah County will impose a new lodging tax at a rate of 5%.

Tax rates are constantly being updated by local and state jurisdictions, make sure your business is staying up to date on the latest changes.

Texas: Taxable Entities Engaging Primarily in Retail/Wholesale Trade Qualify for a Lower Franchise Tax Rate

 

In Texas, the generally applicable franchise tax rate is 1% of taxable margin, but taxable entities primarily engaged in the retail or wholesale trades can calculate the tax using a 0.5% rate.

When establishing your business in a new state, looking for ways to minimize liabilities is just as important and beneficial for a company to do in addition to maintaining compliance. Understanding a states limited taxing power coupled with a clear objective for your company is key to ensuring that you are paying your fair share of taxes and not a penny more.

Kentucky’s Cryptocurrency Incentives

Effective July 1, 2021, commercial mining of cryptocurrency through the process of blockchain technology at a colocation facility is eligible for a sales tax and utility gross receipts license tax exemption on electricity that is used or consumed in the commercial mining process. In order to qualify for the exemption, the facility must consume at least 200,000 kilowatt hours of electricity per month. The facility must apply for approval, and if approved, will receive an exemption letter that they can then use to make purchases of electricity exempt from sales tax and utility gross receipts license tax. The facility will need to report to the department the amount of tax exemptions claimed by November 1st each applicable year.

The sales and use tax exemption also applies to taxes paid on purchases of tangible personal property to construct, retrofit, or upgrade an eligible project, including commercial cryptocurrency mining equipment at the facility.

Washington to Institute Ban on Single-Use Plastic Bags

Washington state initially issued a ban on the use of single-use plastic and non-recycled bags effective January 1, 2021. The implementation of this policy was delayed until October 1, 2021. With this date quickly approaching the state issued a reminder to taxpayers that retail establishments may no longer provide customers with single-use plastic carryout bags, paper carryout bags that are not compliant, or reusable carryout bags made of film plastic that do not meet recycled content requirements.

Retail establishments must collect a charge of 8 cents per bag that they provide or sell that is a compliant paper carryout bag or a reusable carryout bag made of film plastic. This charge must be separately stated on the receipt provided to the customer.

While this charge is considered to be a retail sale, the retailer can take a deduction for “Compliant Carryout Bag Charge” so that the business does not pay B&O tax on the charge.

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: tax@allynintl.com.

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 i