retroactivity
Subscribe to retroactivity's Posts

Illinois UP Bill Would Retroactively Require Reporting of Gift Cards and B2B Transactions

Earlier this year, an unclaimed property rewrite bill (HB 2603) was introduced in the Illinois House that would require holders to retroactively report a number of property types currently exempt. The provision would require a retroactive period of 10 report years. Items that are currently exempt that would become reportable include gift cards and property resulting from business-to-business (B2B) transactions. Seriously??? The bill would accomplish this result by mirroring a number of provisions included in the Uniform Law Commission’s (ULC) Revised Uniform Unclaimed Property Act (RUUPA) and adding a non-RUUPA “transitional provision” implementing the exemption changes retroactively. Specifically, the bill would include gift cards as property subject to escheat (an optional election in RUUPA) and omit any sort of exemption for B2B transactions (also consistent with RUUPA but not consistent with the accompanying commentary). While the inclusion of gift cards...

Continue Reading

Alabama Issues Remote Sellers Use Tax Assessments, Newegg Inc. Appeals

Ever since Alabama’s new economic nexus regulation went into effect, litigation over its constitutionality has been expected given that Alabama Commissioner Julie Magee and Governor Bentley said as much when announcing it (Rule 810-6-2-.90.03, effective January 1, 2016).  It appears that they finally got their wish. On June 8, 2016, Newegg Inc. (Newegg) filed a Notice of Appeal in the Alabama Tax Tribunal challenging the Alabama Department of Revenue (DOR) Notice of Final Assessment of Sellers Use Tax (Assessment) that was entered on May 12, 2016. The Assessment is for seller’s use tax, interest and penalties for the months of January and February 2016 (the Assessment Period), which represent the first two months the new regulation was in effect. The Alabama litigation comes on the heels of the litigation in South Dakota, which also involves Newegg and other retailers. Although the critical issue in both is whether economic nexus is constitutional, given that...

Continue Reading

How Far Back Can a Back Tax Go? Petition for Certiorari in Hambleton Asks Supreme Court to Right Unjust Retroactivity

Retroactivity is an endemic problem in the state tax world.  In this year alone, we have seen retroactive repeal of the Multistate Tax Compact (MTC) in Michigan, as well as significant retroactivity issues in New York, New Jersey and Virginia.  But after decades of states changing the rules on taxpayers after-the-fact, relief may be on the way if the Supreme Court of the United States grants certiorari in a Washington estate tax case, Hambleton v. Washington, with retroactivity that makes you say "What the heck?". The taxpayers filed a petition for certiorari on June 5, 2015.  The Court requested a response, which is now due by September 9, 2015.  The Tax Executives Institute filed an amicus brief on July 6, 2015. The case involves two widows’ estates.  As stated in the petition: Helen Hambleton died in 2006, and Jessie Macbride died in 2007.  Each was the passive lifetime beneficiary of a trust established in her deceased husband's estate, and neither...

Continue Reading

Retroactive Revenue Raisers: A Taxpayer Win in New York; Problems Ahead in Virginia

When state legislatures are in need of additional funds – as they often are – it is tempting to enact retroactive legislation to bring more dollars into state coffers. Two recent developments have Due Process Clause questions of retroactivity back in the news in the SALT world. In Caprio v. N.Y. State Dep’t of Taxation & Fin., No. 651176/11, 2014 NY Slip Op. 02399 (N.Y. App. Div. Apr. 8, 2014), a New York court rejected a retroactive amendment reaching back three years into the past. Virginia, however, recently amended its add-back statute (H.B. 5001, § 3-5.11) with an even longer retroactive period of 10 years. New York’s Three and a Half Year Retroactive Tax Struck Down As-Applied In Caprio, Florida residents sold their stock in a New Jersey S corporation in exchange for an installment note. The S corporation was a janitorial services company that also did business in New York. The parties to the transaction made an IRC § 338(h)(10) election for...

Continue Reading

STAY CONNECTED

TOPICS

ARCHIVES