Author Archives: Monika Miles

FOCUS ON KENTUCKY

Kentucky is known for its horse races, particularly the Kentucky Derby at Churchill Downs.

This month we travel to the Bluegrass State of Kentucky. The nickname is based on the bluegrass found in many of its pastures due to its fertile soil. The state’s largest city, Louisville, is home to the Kentucky Derby, the renowned horse race held at Churchill Downs on the first Saturday in May.

The Red River Gorge is a canyon system on the Red River in east-central Kentucky. Geologically, it is part of the Pottsville Escarpment, a resistant sandstone belt of cliffs and steep sided, narrow crested valleys. The prevalence of sandstone allowed the Red River to cut a magnificent gorge through the mountains. It is a rock climber’s paradise and is some of the best natural area around!

Kentucky is a land with diverse environments and abundant resources, including the world’s longest cave system, Mammoth Cave National Park, the longest of navigable waterways and streams in the contiguous United States, and the two largest man-made lakes east of the Mississippi River.

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Last Chance: Take Advantage of the Amnesty Program Now!

Don’t miss the amnesty program’s deadline!

Are you still considering whether to take advantage of the current amnesty program? Designed as a way for online sellers to become compliant in states they may have created nexus (either intentionally or inadvertently), the voluntary program provides an opportunity for these businesses to come forward if they haven’t been collecting income, franchise, use or sales tax.

 

 

The program originally was going to end on October 17. However, on October 11, the MTC voted to extend the application deadline to November 1. So contact us soon for help registering for this program! 

How the Amnesty Program Works

Online marketplace and ecommerce sellers (particularly those using fulfillment services such as “Fulfillment by Amazon” or FBA) with outstanding sales and income tax liabilities use the Multistate Tax Commission’s Voluntary Disclosure Agreement to become tax compliant, and the participating states waive the fines and penalties for which sellers would generally be responsible. In several cases they are also waiving the tax itself! Continue reading

New: Online Sales Tax Bill Defeated in SD Supreme Court

Judge's supreme court gavel with law books

South Dakota’s online sales tax legislation could end up before the U.S. Supreme Court. Here are the details.

If you’ve been following the online sales tax debate on our blog, you know South Dakota recently passed, “Senate Bill 106, allowing the state to collect taxes from sales made from online retailers – even if they don’t have nexus within South Dakota itself.”

The 2016 law mandated a sales tax collection responsibility from sellers grossing over $100,000 in sales to South Dakota customers, or transactions numbering more than 200 in a year – even if the seller has no physical presence or other connection with the state. Then NetChoice and the American Catalog Mailers Association sued the state, claiming the law violates Quill Corp. v. North Dakota, a ruling which established businesses need a physical presence in the state to be responsible for sales tax and fees.

Online Sales Tax Bill Ruled Unconstitutional

Unsurprisingly, South Dakota’s Supreme Court ruled Senate Bill 106 to be unconstitutional. Supreme Court Justice Glenn Severson stated, “We see no distinction between the collection obligations invalidated in Quill and those imposed by Senate Bill 106…and hold that the circuit court correctly applied the law when it granted sellers’ motion for summary judgment.” Continue reading

Reminder to CA Manufacturers: Sales Tax Exemption!

Does your manufacturing equipment qualify for the CA partial exemption? Read this article to find out more.

Remember when the California Manufacturing Sales Tax Exemption first came into fruition, on July 1, 2014? It seems like so long ago. But maybe it’s a good time to remind companies about this useful partial exemption available to manufacturing companies.

What exactly is this exemption?

It allows certain manufacturers and biotech companies to exempt a portion of California sales and use tax on purchases of qualified equipment used in manufacturing and R&D (research and development).

This exemption went into effect July 1, 2014 and applies to any sale, purchase, and lease of qualified tangible personal property on or after this date.  However, this exemption won’t be around forever- it sunsets on July 1, 2022.

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Ongoing Amnesty Program: Act Soon!

An update on the new amnesty program.

Last month, we updated our readers on an ongoing amnesty program for state taxes that is currently taking effect. As this program could be helpful to sellers utilizing fulfillment marketplaces, we wanted to provide an update on this program so qualified companies can take advantage of the potential benefits of the amnesty.

 

 

What exactly is it?

Despite certain online sellers, like Amazon, volunteering to collect tax across the U.S., many online sellers are not collecting tax in states where they may have (intentionally or inadvertently) created nexus. Amnesty programs encourage companies to become compliant in a given state. This one is a grand-scale amnesty, covering many states.

The nexus committee of the Multistate Tax Commission (MTC) approved the MTC to participate in a multistate sales tax amnesty program for third-party sellers whose only nexus with a state is the use of fulfillment services offered by third-party marketplaces. The Multistate Voluntary Disclosure Program (MVDP) provides a way for a taxpayer with a potential tax liability in multiple states, to negotiate a settlement, using a uniform procedure.

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How is Indiana Advocating for Online Sales Tax? With a Lawsuit

Indiana us state law, code, legal system and justice concept with a 3d rendering of a gavel on the Indiana state flag on background.

Have you heard the latest online sales tax news coming out of Indiana?

Every time we turn around, it seems there’s a new development in the online sales tax debate. As states continue to get involved and look for new ways to bolster their revenue, the issue continues to grow larger and more complex. Now Indiana is looking to the courts to settle the matter.

Indiana’s Online Sales Tax Lawsuit

On August 29, IndyStar reported that Indiana’s Attorney General filed a lawsuit asking Marion Superior Court (in Indianapolis) to find the state’s online sales tax law constitutional. ” The law, which went into effect July 1, requires out-of-state businesses to collect and remit the same sales taxes as Indiana-based businesses.”

This isn’t the first lawsuit Indiana’s online sales tax law, House Enrolled Act 1129, has been involved in. American Catalog Mailers Association and NetChoice argued the legislation was unconstitutional back in June. Continue reading

FOCUS ON MAINE

A lighthouse in Portland, Maine.

This month we travel all the way to the northeast corner of the country to the state with the rocky coastline and maritime history of Maine, the Pine Tree State.

Maine is the northeasternmost state in the contiguous United States. It is known for its jagged rocky coastline, low, rolling mountains, heavily forested interior, picturesque waterways, and its seafood cuisine, especially clams and lobster.

During the last ice age, the receding glacier left artifacts that we find interesting today- millennia later. Much of Maine’s geomorphology was created by extended glacial activity at the end of the last ice age. Prominent glacial features include Somes sound and Bubble Rock, both part of Acadia National Park on Mount Desert Island. Carved by glaciers, Somes sound is considered to be the only fjord on the eastern seaboard and reaches depths of 175 feet. The extreme depth and deep drop-off allow large ships to navigate almost the entire length of the sound. These features also have made it attractive for boat builders, such as the prestigious Hinkley Yachts.

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New Online Sales Tax Legislation: Why Is It Interesting?

US Capitol Building

What’s the latest in the online sales tax debate? The No Regulation Without Representation Act. Read about it here.

As you know, we’ve been following the online sales tax debate for years. From the Marketplace Fairness Act to states taking matters into their own hands, it’s been interesting to follow as lawmakers debate how to handle imposing state sales tax on internet retailers. It’s especially difficult given the wide variety of taxes and fees that would need to be imposed at a state, county and city level.

New Online Sales Tax Bill: No Regulation Without Representation

The latest legislation coming from Washington DC is called the No Regulation Without Representation Act. Unlike previous bills, this one would actually remove the ability for states to collect online sales tax by essentially codifying the physical presence standard set in the US Supreme Court case Quill Corp v. North Dakota (1992). What would that mean for taxpayers? It would define physical presence (and that you have to have it in order for a state to impose its taxing scheme), as Quill did, and also likely create a de minimis threshold. The bill would essentially eliminate click through nexus standards and affiliate nexus rules currently being imposed by various states. Continue reading

How Did Washington Expand Nexus? The Latest State Tax Legislation

Washington map with flag isolated on white background.

Did you hear about Washington’s latest state tax legislation? This post has the details.

Over the last few years, Washington has taken an interesting approach to its nexus and state tax law. Back in 2015, it adopted a click-through statute and economic nexus thresholds for businesses making sales in the state. Washington currently has a few other interesting bills up for debate, but in the meantime the Department of Revenue (DOR) enacted another piece of legislation that affects economic nexus.

About Washington State Tax Law HB 2163

Washington’s DOR explains how this new state law affects nexus and business and occupation (B&O) tax alongside a few examples on its website. Here’s a brief summary. Continue reading

AMNESTY PROGRAM DIRECTED AT FBA SELLERS

Could an Amnesty Program erase your tax burden?

There is a new scheduled amnesty program that may help businesses correct overlooked tax obligations if they have been selling products and services in other states. Many companies engage in multi-state sales through an intermediary, like Amazon, eBay and similar organizations called “fulfillment services.” The fulfillment centers place a seller’s inventory in warehouses in multiple states to expedite shipping, but in the process, create nexus for the seller in those states. As such, the sellers have an obligation to collect sales tax and pay income tax. Unfortunately, unpaid taxes may incur penalties and interest. Now there may be a short time window to correct these errors and avoid interest and penalties.

On Monday, July 31, the nexus committee of the Multistate Tax Commission (MTC) approved the MTC to participate in a multistate sales tax amnesty program for third-party sellers whose only nexus with a state is the use of fulfillment services offered by third-party marketplaces.  The MTC is an intergovernmental state tax agency working on behalf of states and taxpayers to facilitate the equitable and efficient administration of state tax laws that apply to multistate and multinational enterprises.

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