Category Archives: Sales Tax

Upcoming Texas Amnesty Program

Erase your tax obligations with the current and upcoming amnesty programs.

There always seems to be an amnesty program going on somewhere, particularly if you know where to look.

States are aggressively pursuing delinquent taxpayers, while still making it relatively easy for them to come forward themselves. Last year, we wrote an article about some interesting amnesty programs in Connecticut (CT), Ohio (OH), and Rhode Island (RI).

Most amnesty programs allow for a waiver of penalties and a limitation on interest if businesses come forward under the terms of the program as specified by the state legislature. Most of the programs are limited in time (often only a two to three month window) and only cover certain taxes.  Yet, with the right fact pattern, a company might benefit from engaging in such a program. But not always.  As with most things related to multi-state tax issues, the answer may require a little more research and analysis.

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Amazon Shares Valuable 3rd Party Sales Tax Data with MA

Casual beautiful business woman working on a laptop.

Are you a third-party seller? You may want to be aware of the latest from Massachusetts and Amazon.

As we wait for the courts to settle the online sales tax debate, states like Massachusetts are continuing to go after third-party resellers, specifically those that sell on Amazon, in an attempt to track down the sales tax revenue they’ve been missing.

In September, Massachusetts sued Amazon for data about its third-party sellers with inventory in the state. A judge ruled in Massachusetts’ favor and, finally, in late January Amazon notified its sellers they would turn over the information, including:

  • Each marketplace seller’s contact information, including name, address, federal tax ID number, and phone number
  • Estimated value of each marketplace seller’s inventory in Amazon’s Massachusetts fulfillment centers, based on the seller’s selling prices in late 2016 and 2017

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FOCUS ON NEW HAMPSHIRE

The Swift River running through the White Mountains of New Hampshire.

This month, we travel to the New England region of United States to New Hampshire. Known as the Granite State, it is defined by its quaint towns and large expanses of wilderness.

New Hampshire is a state with some mighty history. In January 1776, it became the first of the British North American Colonies to establish a government independent of the Kingdom of Great Britain’s authority, and it was the first to establish its own constitution. Six months later, it became one of the original 13 states that founded the United States of America, and in June 1788 it was the ninth state to ratify the Constitution, bringing that document into effect.

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3 Ways High-Tax States Are Fighting Federal Tax Reform

Closeup on businessman holding a card with text tax reform

What do you think of these states’ proposals to counteract federal tax reform?

As this year’s federal tax reform begins to come into play, high-tax states like California, New York, New Jersey and Maryland are coming up with ways to work around it, “reworking their tax codes to ease residents’ pain from new limits to federal deductions for state, local and property taxes,” as CNBC explains.

How are legislators in these states fighting against the tax reform? Three states – New Jersey, Connecticut and New York – are taking the matter to court, suing the federal government over it. That’s not all high-tax states are doing, though. Here are a few additional ways some state legislatures are proposing to counteract some of the new measures.

In California: Donate to the California Excellence Fund

In response to the $10,000 cap on property, state and local income tax (SALT) deductions, California Senate leader de Leon introduced a bill allowing the residents to pay some state taxes to the California Excellence Fund, a state nonprofit. This would let them deduct their charitable contribution on their federal tax return. The idea is that the taxpayer would pay the first $10,000 of their SALT taxes as normal, and then contribute the remaining amount to the fund as a donation, thereby making their entire SALT taxes deductible. For more information, check out this recent blog post. Continue reading

BREAKING NEWS CONCERNING ONLINE SALES TAX

United States Supreme Court.

The United States Supreme Court announced on January 12, that it has granted certiorari and will hear a case related to state taxes – something that does not happen often!  The High Court could finally settle an ongoing battle between e-retailers and states about how online purchases are taxed, and in the process may overturn a 1992 ruling which currently prevents states from collecting sales taxes on online purchases unless the seller has a physical presence in the state. An overhaul of this nature would change the state tax landscape significantly and require more online sellers to collect sales tax.

 

What’s happening?

Based on a long standing Supreme Court ruling from 1992 (Quill Corp. v. North Dakota), online retailers are not required to collect sales tax unless they have a physical presence (such as an office, inventory, or people) in a state. Over the past several years as online purchases have become prolific and states are losing sales tax revenue, the states have fought back by passing creative legislation to allow for collection of sales tax on online purchases. Several state legislatures have recently enacted laws referred to as “economic nexus” provisions, where a company creates nexus in a state by virtue of a minimum amount of sales revenue or instances of sales into a state, instead of looking to the physical presence threshold. Some states, like Colorado, have passed onerous reporting mechanisms to, in effect, report on their customers who may not be self-assessing use tax.

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Happy New Year! An Online Sales Tax Preview for 2018

Happy new 2018 year shiny glowing purple and gold greeting card.

What’s on the horizon for state and sales tax news this year?

Happy New Year from everyone at Miles Consulting Group! We hope you had a wonderful holiday season and are looking forward to 2018. We certainly are!

What’s on the horizon for the coming year? We’re looking forward to seeing how the following state tax news unfolds during this year:

  • States’ conformity to the new federal tax act just passed. Many states may de-couple from some of the changes in the federal law. Planning for this could prove challenging!
  • Supreme Court cases: It will be interesting to see if some of the state legislation we’re watching makes it to the U.S. Supreme Court, such as South Dakota’s Senate Bill 106, Ohio’s “cookie directive” or Indiana’s economic nexus. Could this finally be the year that the Supreme Court (or Congress) weighs in on the online sales tax debate?
  • Increased compliance for those that decide not to collect sales taxes (because they don’t have nexus in a state), but require sharing customer data in states such as Washington and Colorado. We expect more states to jump on this bandwagon in 2018.

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Thank you for an Awesome 2017

We appreciate you!

In our last blog post of 2017, I’d like to stop and reflect for a moment with you, my readers.

As we quickly approach 2018, we know that the multi-state tax landscape will continue to be interesting.  We’ll have plenty of opportunities in the upcoming months to discuss the state tax impact of the recently passed tax act, potential Supreme Court cases, sales tax on online taxes, and myriad other “developments” in many states.

But today, I’d like to simply say thank you!  Thank you to clients who continue to engage with us for your multistate tax needs – from special projects, to nexus and taxability studies, to controversy work and much more!  Thank you to colleagues, CPAs, attorneys, temporary/fractional CFOs and compliance firms with whom we partner to deliver amazing service to our clients.  Thank you to trusted advisors and colleagues in my many networking groups (ProVisors, AFWA, NAWBO and WITNG, among others).  Thank you to my business coach of many years, Barbara, who helps to keeps me accountable and on track – both with the state tax consulting and my Jumpstart Your Rainmaking program.  And of course to my family – who continue to support me in these endeavors and frequently stop me and ask “How are you really doing?!” or “How can I help?”  And thank you also to the team behind Miles Consulting Group who help with IT, marketing, administration, and so many other things that continue to keep us humming! Thank you Jeff for all that you do!

We are excited about a prosperous 2018.  We look forward to continuing to work with our current clients and meeting and working with new ones.  We’re already looking at some travel to conferences in the new year (both to take in some new information AND to be on the teaching side to share information with others), and continuing our on-line education via webinars (both on the tax technical and Rainmaking sides of the house.

So, join us in turning that calendar page to January 2018 in just a few days.  We are excited about working with all of you and seeing what that year will bring.

Happy holidays and Happy New Year to you and yours!!

Fondly,

Monika & The Miles Consulting Team

 

FOCUS ON NEBRASKA

Chimney Rock National Historic Site is a Landmark located in western Nebraska.

This month, we take a journey out west to Nebraska, where early settlers roamed the state. It used to be nicknamed the “Tree Planter’s State,” but was changed in 1945 to the “Cornhusker State.” Husking corn was done by hand by early settlers of course (before the invention of husking machinery). The University of Nebraska athletic team is called the Cornhuskers.

Nebraska is a Midwestern U.S. State encompassing the prairies of the Great Plains, the towering dunes of the Sandhills and the panhandle’s dramatic rock formations. Lincoln, the capital and a vibrant university town, is distinguished by its soaring state capitol. The city of Omaha is home to the Durham Museum, which honors the state’s pioneering past in a converted railroad depot.

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More Amnesty on the Way!

What states are coming up with amnesty programs of their own?

Across the U.S., amnesty seems to be a popular topic these days. The Multistate Tax Commission’s (MTC) special amnesty program for marketplace retailers recently ended. And a few other states have recently announced their own amnesty programs so that they can benefit from potential increased compliance as well. Connecticut (CT), Ohio (OH) and Rhode Island (RI) are the latest states to roll out amnesty programs of their own. And we expect others to follow. The states administer amnesty programs because they want to induce companies to become compliant by waiving, or limiting penalties and interest for prior unpaid taxes.

 

Recent MTC amnesty program

Many states just took part in a special amnesty program. The MTC had negotiated this special program for online sellers using marketplace fulfillment services (such as Fulfillment by Amazon) that created nexus and thereby had sales tax and income tax obligations. Twenty five states participated, including CT and RI. To find out more about this amnesty program, click here.

This special amnesty program waived taxes in addition to interest and penalties. We’ve cautioned our clients not to expect amnesties to be that generous in the future. Most state amnesties allow taxpayers to waive penalties and some interest, but rarely the tax itself.

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FOCUS ON MICHIGAN

Tahquamenon Falls in Michigan’s eastern Upper Peninsula.

This month takes us to the Wolverine State of Michigan. The origins of this name are obscure, but may be derived from a busy trade in Wolverine furs during the 18th Century.

Its largest city, Detroit, is famed as the seat of the U.S. auto industry, which inspired Diego Riviera’s murals at the Detroit institute of Arts. Also in Detroit is Hitsville U.S.A., the original headquarters of the Motown Record Company. Michigan is home to many great musicians including The Supremes, The Temptations, Stevie Wonder, Smokey Robinson, Bob Seger, Kid Rock and Alice Cooper.

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