Tax Publications

House Votes to Reinstate Research and Experimentation Tax Credit

Posted on July 18, 2014. Category: Tax Publications

On May 9, 2014, the U.S. House of Representatives voted to reinstate the Research & Experimentation Tax Credit under Section 41 of the Internal Revenue Code.  This had previously expired on December 31, 2013. It must still pass the Senate where the Senate Finance Committee backs a measure extending the credit through the end of 2015. What Is It? The Research & Experimentation Tax Credit was first enacted in 1981 in hopes of developing more US-based jobs at a time when many US-based companies were moving jobs overseas.  Since then, the credit has lapsed and been revived several times. The research credit, in...

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Qualities of a Fair State Tax Administration Part 3 – Corporate Income Tax Return Due Dates and Protest Periods

Posted on July 17, 2014. Category: Tax Publications

This is the third 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. The two qualities discussed in this article deal with deadlines: 1)    Due dates for corporate income tax returns and filing of extensions   2)    Protest periods for any type of taxStates who do not allow adequate time to prepare a state income tax return, which starts with having a correct federal taxable income...

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Nexus and Online Sales

Posted on July 16, 2014. Category: Tax Publications

With the Marketplace Fairness Act still pending, many retailers may not be collecting sales tax on their online sales until Congress takes action.  What they fail to note, however, is that companies who have a physical presence nexus in a state are subject to retail sales tax now, and states vary with how they determine physical presence nexus.  States are fishing for more tax revenue by sending out business activities tax questionnaires.  Responses hinting at physical presence nexus by companies who aren’t currently registered to collect and remit retail sales tax will certainly be a...

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Georgia Broadens Manufacturing Exemption

Posted on July 15, 2014. Category: Tax Publications

On July 1, 2014, Georgia will put into effect a broader scope of items included in the manufacturing exemption for sales and use tax.  House Bill 900 was signed into effect by Governor Deal on April 24, 2014, a copy of which can be found here.What It Entails Consumable supplies are defined in this bill as tangible personal property other than machinery and industrial materials that are consumed or expended during the manufacture of tangible personal property.  The term includes certain water treatment chemicals but excludes packaging supplies and energy.  Be sure to reference the wording in the bill to verify...

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New York State Franchise Tax Sweeping Changes in 2015

Posted on July 08, 2014. Category: Tax Publications

On March 31, 2014, New York Governor Andrew Cuomo signed the most extensive New York state corporation franchise tax reforms in almost four generations. The overall result was to eliminate some of the older elements of the franchise tax and implement rules that are more in line with other major states. Some of the more significant changes are listed below. Unless otherwise stated, these changes will go into effect for the 2015 tax year.Most Significant ChangesThe most significant changes in New York’s rather complex corporate franchise tax include: Elimination of the Banking Corporation Tax (Article 32). Banks will now file...

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Alabama Establishes Independent Tax Tribunal

Posted on April 16, 2014. Category: Tax Publications

Alabama has just recently established an independent tax tribunal effective October 1, 2014, replacing its Administrative Law Division which was tied to the Department of Revenue.  See 2014 Alabama House Bill No. 105.  This is significant, as Alabama has attempted to establish this tribunal multiple times in order to improve its tax administration and business climate.What It Entails The independent Alabama Tax Tribunal is an executive branch agency developed to hear tax matters as well as other matters administered by the Department of Revenue and certain participating self-administered counties and cities.  Its purpose is to resolve disputes between taxpayers and...

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Senate Finance Committee Passes Bill to Extend Bonus Depreciation

Posted on April 10, 2014. Category: Tax Publications

The EXPIRE Act (Expiring Provisions Improvement Reform and Efficiency) was passed in the Senate Finance Committee on April 3, 2014.  Part of the act included provisions for extending bonus depreciation under Section 168(k).Bonus Depreciation For over a decade, bonus depreciation has popped in and out of the tax code as a temporary measure to stimulate the economy.  It has allowed anywhere from an additional 30% to 50% of an item’s basis to be depreciated (expensed) in the first year of a capitalized asset’s useful life for certain qualified assets.  The measure has been temporary because it...

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Virginia Rules Post-Sale Technical Training Development Creates Nexus

Posted on March 30, 2014. Category: Tax Publications

The Virginia Tax Commissioner has recently ruled that an employee’s home office in Virginia, wherein test methods for post-sale training were developed, created nexus for income tax despite the training itself being conducted out of state. (Virginia Public Document Ruling 13-172, 09/19/2013).Facts The taxpayer’s only tie to Virginia is an employee with a home office in the state.  This employee travels outside the state to conduct training at customer facilities or the taxpayer’s office.  The employee also conducts test methods from her Virginia home office.  The taxpayer is in the business...

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House’s 7 Principles for Internet Sales Tax Bill

Posted on March 28, 2014. Category: Tax Publications

House Judiciary Committee Chairman, Bob Goodlatte, (R-Va.) released seven principles for devising an Internet Sales Tax Bill on September 18.  This is a follow-up to the passage of the Senate legislation in May of 2013.  In a press release, Goodlatte said, "The aim of the principles is to provide a starting point for discussion in the House of Representatives."The Seven Principles 1. Tax Relief – Using the Internet should not create new or discriminatory taxes not faced in the offline world. Nor should any fresh precedent be created for other areas of interstate taxation by States. 2. Tech Neutrality – Brick ...

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Qualities of a Fair State Tax Administration Part 2 – Even-Handed Statute of Limitations and Interest Rates

Posted on March 28, 2014. Category: Tax Publications

This is the second 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. The qualities discussed in this article are even-handed statutes of limitation for refunds and assessments as well as equal interest rates on refunds and assessments.  States who establish different expiration dates for refunds versus assessments or different interest rates for them are showing an unfair bias against businesses – possibly a consideration when looking to invest in...

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