You Missed It: Last Week in Allyn Tax News

Posted on December 14, 2021


Taxable Values: Don’t Be Afraid to Appeal

Every year companies must file business personal property returns to the various local taxing authorities where they hold assets. These returns determine the taxable values that those authorities use to calculate your annual business property tax. Most jurisdictions, upon receipt of the return, calculate an assessment or taxable value and generate a notice that they mail to the various businesses. This amount is then applied to the authority’s tax rate to give you your tax amount for the year. It is vital for a business to know and understand how that amount is determined so they are not being over or under assessed on their property taxes. No one wants to overpay if they don’t have to, and I can’t imagine any business would like to be audited and get charged penalties and interest because they weren’t aware that their amounts were being calculated incorrectly.


New York Property Tax - Residential and Mixed-Use Investment Exemption Program

Effective December 1, 2021, New York State Assembly Bill A7520 provides a real property tax exemption for specific residential and mixed-use properties for a 15-year period. “Residential and mixed-use real property” means any building with one to four units of which one unit may be for commercial or retail use, and the residual units shall be for residential use. A 100% exemption is provided the first four years of the program and then the exemption decreases by 5% each year following. This exemption only applies to properties in a city with a population between 50,000 and 51,000, based on the 2010 federal census.


Pest Control Services in Arkansas – Taxable or Exempt?

Under Arkansas law, pest control services are taxable services. Pest control service providers are responsible for collecting, reporting, and remitting sales tax on the sales of their taxable services. This is unless the service was provided for an exempt customer. Examples of an exempt customer include government agencies and certain nonprofit organizations.


Consumer’s Use Tax vs. Seller’s Use Tax: Nearly Every Business owes Use Tax - do you pay yours?

Consumer’s use tax is typically imposed on the storage, use, or consumption of a taxable item or service on which no sales tax has been paid. A purchaser should pay a consumer use tax on any taxable tangible personal property stored or used in their state, unless the purchaser had paid the correct state sales tax to the seller.

Seller’s use tax, which is also known as retailer’s or vendor’s use tax, typically functions in the same way as a sales tax. The difference is that seller’s use tax applies to sales that are conducted by a vendor located outside of the state but is registered to collect tax in the state of the sale. Therefore, if a vendor charges a customer seller’s use tax at the appropriate rate, the customer will not have a consumer’s use tax obligation. 


Minnesota Updates Release on Taxability of Coupons, Discounts, and Rebates

To help with the taxability of the price of an item affected by coupons, rewards, and rebates; retailer discounts; daily deal website vouchers and coupons; trade-ins; and miscellaneous forms of payment, the Minnesota Department of Revenue has updated a release to explain these circumstances. The revised release discusses how to apply sales and use tax; when to charge the tax before the price reduction, when to charge the tax after the price reduction; and bundled rewards. The release also determines the sales tax treatment of retailer discounts including quantity discounts; cash discounts; promotional discounts; discounts given on future transactions; and discounts given on present transactions. Additionally, the release determines the taxability of miscellaneous forms of payment such as gift cards and gift certificates; barter; alternative forms of currency such and scrip and cryptocurrency; and coupon books.


South Carolina: Item’s Delivered Out-of-State Exempt from Tax

The South Carolina Department of Revenue has issued a statement finding that a manufacturer of cables in SC is exempt from sales tax on a sale to a customer outside the state lines. Both the taxpayer and the customer are indirectly 100% owned by the same ultimate parent company, however both are regarded as separate entities for state tax purposes.

In this case, the taxpayer delivers the cables to the customer to a point outside the United States, on a vehicle that the taxpayer must lease. Because the good is delivered outside SC, the transaction is considered exempt.


Texas Property Tax – Exhaustion of Administrative Remedies

A Texas charitable organization failed to exhaust its administrative remedies by not applying for the property tax exemption. In Texas, real property and buildings owned by a charitable organization are exempt from tax. However, it is the organization’s responsibility to apply for the exemption. The charitable organization in question was denied an application for total exemption from tax in 2017. Instead of submitting a new application in 2018, the organization filed a protest to the 2017 exemption denial. The board determined the market value for the property in 2018 and the organization could not qualify for the exemption since it failed to file a new exemption application for the 2018 tax year.


North Carolina Modified Utility Vehicles: Taxable or Exempt?

The North Carolina Department of Revenue has issued an announcement clarifying that sales and use tax is due on the sales price of a modified utility vehicle (MUV) and highway use tax is not due on MUV’s. Generally, sales of motor vehicles in North Carolina are exempt from sales tax and are only subject to highway use tax. A MUV is not considered a motor vehicles for tax purposes as it is not designed for primarily highway use.


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Contributor: Courtney Sboro

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