Category Archives: States News

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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The Good & Bad of the New Tax Reform: How California’s Affected

Tax reform text on calculator screen with hundred dollar bill on income tax form.

How does the federal tax reform affect California? This blog post explains.

The beginning of the year marks the start of many new things: a new year, new business goals and new federal tax reform. What do the changes in tax law mean for California companies – especially in Silicon Valley?

In The Daily Journal, Carl Guardino (CEO of the Silicon Valley Leadership Group) likened the latest tax reform to the 1960s western, “The Good, the Bad and the Ugly” – and for good reason. While there are some changes that will benefit corporations, others will likely make it difficult for businesses in the area.

Are these changes considered ‘good, bad and ugly’ throughout the entire state, all the way down to Southern California? Keep reading to find out how this year’s federal tax reform will affect corporations in Silicon Valley as well as Southern California.

‘The Good’ of Federal Tax Reform

One big change to the latest tax reform is corporations seeing tax rates slashed; instead of paying 35 percent, they’ll only need to pay 21 percent. Also, companies making profits overseas will only be subject to taxes based on where the sales are made, eliminating an additional tax they’ve been paying in years prior. As you can imagine, these changes will make a big difference for many companies in the area. It also makes U.S. businesses more competitive with the global innovation economy, an important field for many Silicon Valley enterprises. Continue reading

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

 

The Top 8 Significant Sales Tax Issues of 2017

As 2017 comes to a close, we thought this would be a good time to reflect on the past year. There have been quite a few notable developments in the online sales tax realm and in multistate issues in general over the last 12 months. Here are 8 developments that we thought were of particular significance, which we’ve discussed on our blog in the past year.

1. Fascinating Ramifications of Colorado’s New Online Sales Tax

Side view of a piggy bank with the flag design of colorado.

What are the ramifications of online sales tax in Colorado?

Colorado has been at the forefront of the internet sales tax debate since 2010, when it passed a law that required companies with more than $100,000 in sales that did not have nexus in the state to 1) alert Colorado customers that state sales or use tax is due and 2) file annual reports to the state, listing all the names, purchases and shipping addresses of Colorado customers.

After making its way to the courts and several rounds of negotiations between the state and taxpayers, the law went into effect on July 1, 2017. Find out why the U.S. Supreme Court chose not to hear the case and more in the full blog post.

2. Another Move Toward Economic Nexus

Highway map of the state of Indiana with Interstates and US Routes.  It also has lines for state and county routes (but not labeled) and many cities  on it as well.  All cities are the County Seats and the Capitol (and some others).

How are states like Indiana pushing economic nexus limits?

When businesses sell their products across state lines, they need to think about whether they have taxable presence, or nexus, in the state and if their products are taxable. In 2017, several states began pushing the boundaries of defining the physical presence in order to generate more revenue. Welcome to the concept of “economic nexus.”

Read more about this concept and how states such as Indiana are pushing limits through economic nexus in this blog post. Continue reading

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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