In Case You Missed It: Last Week in Allyn Tax News (Nov 1)

Allyn Tax Fun Facts Happy Monday! Are you ready for more Allyn Tax Fun Facts?

Some states tax costumes while others don’t. Massachusetts exempts children’s costumes but taxes adult ones. In New York, costumes priced over $110 are taxed as luxury items! To learn more, ask an expert here: https://lnkd.in/eMTnUw3y

Charged Up!

The Michigan State Tax Commission is currently evaluating its recommended procedures for valuing battery energy storage systems. The effort will not be completed before the time assessors finalize their 2025 assessment rolls. However, the Commission has issued interim guidance regarding the treatment of personal property associated with battery energy storage systems. The guidance applies only to systems which are typical utility scale battery energy storage systems. Battery energy storage systems are reported, classified for equalization purposes, and assessed as industrial personal property for the 2025 assessment year and are valued using Table (Section) E of the Personal Property Statement, Treasury Form 632 (L4175) as this table most closely reflects current battery energy storage data analysis.

Illinois – Direct Pay Permit Update

On August 9, 2024, Illinois Governor J.B. Pritzker signed legislation requiring all holders of a direct pay permit to review their purchase activities annually. By March 31, 2025, and by March 31 of each subsequent year, permit holders must ensure that purchases made during the 12-month period ending December 31 of the previous calendar year were accurately sourced and taxed at the correct rate.

If a Direct Pay Permit holder discovers an error in sourcing or tax rates during the review process, they must file an amended return to correct the error by April 20 of that year. Failure to properly verify purchase activities or correct sourcing and tax rate errors as required by this legislation and the Department’s rules will result in a penalty of $6,000, payable to the Department and deposited into the Tax Compliance and Administration Fund.

However, the penalty will not be imposed if the Department determines that at least 95% of the permit holder’s transactions for the review period were correctly sourced and taxed, or if the permit holder acted with ordinary business care and prudence, as defined under Section 3-8 of the Uniform Penalty and Interest Act. The Department may establish rules to administer these penalties.

Get Your Discounts

The Illinois Department of Revenue issued an informational bulletin to all Illinois retailers and servicepersons that, on or after January 1, 2025, the retailers' discount amount is limited to $1,000 per month for sales and use tax and other related returns. Taxpayers may claim a maximum discount of $1,000 per month for each of the following periodic returns: Form ST-1 (Sales and Use Tax and E911 Surcharge Return); Form ST-70 (Aviation Fuel Sales and Use Tax Return); Form CD-1 (Cannabis Dispensary Tax Return); Form LSE-1 (Tax Return for Vehicle Leasing Companies); ST-201 (Rental Purchase Agreement Occupation Tax Return); Form ART-1 (Automobile Renting Occupation and Use Tax Return); Form CMFT01 (County Motor Fuel Tax Return); and Form MMFT-1 (Municipal Motor Fuel Tax Return). For the following transaction returns, taxpayers may claim a maximum discount of $1,000 per month: Form ST-556 (Sales Tax Transaction Return); and Form ST-556-LSE (Transaction Return for Leases). For all amended periodic and transaction returns, if the amount of tax due is increased, the discount may still not exceed $1,000 per month, and is allowed only if the increased tax reported was paid by the due date of the original return.

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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 America, Europe, and Asia. Allyn’s regional headquarters are strategically located in Fort Myers, Florida, U.S.A., Shanghai, P.R. China and Prague, Czech Republic. For more information, visit www.allynintl.com.