sales tax
Subscribe to sales tax's Posts

You’re Invited: COST, Bloomberg Tax and McDermott Will & Emery to Host Post-Oral Argument Roundtable Discussion

On Tuesday, April 17, 2018, at 10:00 am (EST) the United States Supreme Court will hear oral arguments in South Dakota v. Wayfair, Inc., a state tax case poised to reconsider the dormant Commerce Clause physical presence standard upheld by the Court on stare decisis grounds in the historic mail-order case Quill Corp. v. North Dakota (U.S. 1992), which was litigated by McDermott Will & Emery. The Court is expected to consider whether a 2016 South Dakota law imposing sales and use tax collection obligations on online retailers–and other sellers–with no physical presence in the state is permissible given, among other things, the advances in technology and e-commerce since Quill was decided. For those that would like to attend the South Dakota v. Wayfair, Inc. oral argument as a member of the public (as opposed to as a member of the US Supreme Court Bar), the Supreme Court Police give out 100–150 numbered tickets between 7:00 am–7:30 am. The doors to the...

Continue Reading

Massachusetts DOR Sending Letters to Sellers Regarding July 1 Effective Date of Economic Nexus Directive

Recently, the Massachusetts Department of Revenue (Department) sent letters to several companies regarding Directive 17-1. The Directive announces a “rule” requiring remote internet sellers to register for and begin collecting Massachusetts sales and use tax (sales tax) by July 1, 2017, if they had more than $500,000 in Massachusetts sales during the preceding year. The legal premise behind the rule is that the Department believes sellers with more than $500,000 in annual Massachusetts sales must have more than a de minimis physical presence so that requiring sales tax collection would not be prohibited by Quill Corp v. North Dakota, 504 US 298 (1992). The Directive’s examples of such physical presence include the presence of cookies on purchasers’ computers, use of third-party carriers to make white-glove deliveries and the use of online marketplaces to sell products. The Directive also states that sellers who fail to collect tax beginning July 1, 2017 will...

Continue Reading

Illinois Appellate Court Delivers Another Blow to Relator in False Claims Act Litigation

On Monday, October 17, the Illinois Appellate Court issued another taxpayer-friendly opinion in an Illinois False Claims Act case alleging a failure to collect and remit sales tax on internet and catalog sales to customers in Illinois (People ex. rel. Beeler, Schad & Diamond, P.C. v. Relax the Back Corp., 2016 IL App. (1st) 151580)). The opinion, partially overturned a Circuit Court trial verdict in favor of the Relator, Beeler, Schad & Diamond, PC (currently named Stephen B. Diamond, PC). Consistent with its opinion in State of Illinois ex rel. Schad, Diamond & Shedden, P.C. v. National Business Furniture, LLC, 2016 IL App (1st) 150526 (Aug. 1, 2016)), the Appellate Court emphasized the high standard of proof imposed on a whistleblower seeking to prove a reckless disregard of the tax laws. The opinion is noteworthy because the court repeatedly acknowledged that “what constitutes sufficient physical presence to justify collection of the use tax is...

Continue Reading

D.C. Proposes Law to Allow Indefinite Suspension of Limitation Period for Assessment and Collection

The Fiscal Year 2016 Budget Support Act of 2015 (BSA), introduced by the Washington, D.C. Council at the request of Mayor Muriel Bowser on April 2, 2015, contains a subtitle (see Title VII, Subtitle G, page 66-67) that would give the Office and Tax and Revenue (OTR) complete discretion to indefinitely suspend the period of limitation on assessment and collection of all D.C. taxes—other than real property taxes, which contain a separate set of rules and procedures. The change to the statute of limitation provision would eliminate a fundamental taxpayer protection that exists today in all states. Those concerned should reach out to members of the D.C. Council to discourage adoption of this subtitle of the BSA. Current Law Under current law, the amount of tax imposed must be assessed (in other words, a final assessment must be issued) within three (3) years of the taxpayer’s return being filed. See D.C. Code § 47-4301(a). Practically speaking, this requires the...

Continue Reading

Maryland Offers Attractive Amnesty Program – Even for Taxpayers Under Audit!

Starting September 1, 2015, the Comptroller of Maryland (Comptroller) will offer qualifying taxpayers that failed to file or pay certain taxes an opportunity to remit tax under very attractive penalty and interest terms.  The 2015 Tax Amnesty Program (Program) is the first offered in Maryland since 2009, when the state raised nearly $30 million, not including approximately $20 million collected the following year under approved payment plans.  The amnesty program offered before that (in 2001) brought in $39.4 million.  Consistent with the Maryland amnesty programs offered in the past, the Program will apply to the state and local individual income tax, corporate income tax, withholding taxes, sales and use taxes, and admissions and amusement taxes. The Program was made law by Governor Larry Hogan when he signed Senate Bill 763, available here, after two months of deliberation in the legislature.  While the Program is scheduled to run through October 30, 2015,...

Continue Reading

Inside the New York Budget Bill: Proposed Sales Tax Amendments

Governor Andrew Cuomo’s 2015-2016 New York State Executive Budget Bill (Budget Bill) contains several important revenue measures, including, but not limited to, technical corrections to the 2014 overhaul of New York State’s Corporate Franchise Tax, conformity of the New York City General Corporation Tax to the revised New York State Corporate Franchise Tax, and several significant changes to New York’s sales and use tax statutes.  This article will address the Budget Bill’s proposed sales and use tax changes.  Several of these changes, while touted by Governor Cuomo as “closing certain sales and use tax avoidance strategies” are much broader and, if enacted, will have a significant impact on the sales and use tax liabilities resulting from routine corporate and partnership formations and reorganizations. Read the full article.

Continue Reading

Inside the New York Budget Bill: 30-Day Amendments

On Friday, February 20, 2015, Governor Andrew Cuomo’s office released the 30-Day Amendments to the 2015–2016 New York State Executive Budget Legislation (Budget Bill).  This year, instead of the usual set of corrections and minor changes to the Budget Bill, the 30-Day Amendments focused primarily on the governor’s five-point ethics reform plan, with only very few corrections and minor changes included with respect to the Revenue Bill.  Those few corrections and changes focused on credits and incentives (e.g., technical corrections and clarifications to the New York State School Tax Relief (STAR) Program, the real property tax credit, the Brownfield Cleanup Program, and the credit for alternative fuel and electric vehicles) leaving any changes to the proposed sales tax provisions, corporate franchise tax technical correction provisions and New York City conformity provisions to the legislative process.  Please see our On the Subject related to the Budget...

Continue Reading

Inside the New York Budget Bill: Proposed Sales Tax Amendments

Governor Andrew Cuomo's 2015–2016 New York State Executive Budget Bill proposes several significant changes to New York’s sales and use tax statutes. Several of these changes, while touted by the governor as "closing certain sales and use tax avoidance strategies,” are much broader and, if enacted, will have a significant impact on the sales and use tax liabilities resulting from routine corporate and partnership formations and reorganizations. Read the full article.

Continue Reading

Three Strikes…Tax on Cloud Computing Out in Michigan?

If the Department of Treasury (Treasury) was hoping that the Michigan courts would simply overlook the previous two cloud computing losses this year in Thomson Reuters (previously covered here) and Auto-Owners (discussed here), they appear to have been mistaken.  Last Wednesday’s Court of Claims opinion in Rehmann Robson & Co. v. Department of Treasury marked the third Michigan decision this year to rule that cloud-based services are not subject to use tax in the state.  In Rehmann Robson, the Court of Claims found that the use of Checkpoint (a web-based tax and accounting research tool) by a large accounting firm was properly characterized as a non-taxable information service, despite Treasury’s continued effort to impose use tax and litigate similar cloud-based transactions.  This taxpayer victory comes just six months after the Michigan Court of Appeals in Thomson Reuters found that a subscription to Checkpoint was primarily the sale of a service under...

Continue Reading

Illinois Department of Revenue Intends to Extend Its Multifactor Post-Hartney Sourcing Regulations to Interstate Transactions

The saga over local sourcing of Illinois retailers’ occupation taxes is well known. The Illinois Department of Revenue has a dedicated webpage for the issue, and Inside SALT covered some of the litigation aspects last month (see Illinois Regional Transportation Authority Suffers A Setback In Its Sales Tax Sourcing Litigation).  A new chapter is unfolding now, with revised proposed local sourcing rules that would apply a multifactor sourcing analysis to both intrastate and interstate sales. The regulations may be made final as soon as next month, and retailers with complex retailing processes should consider how the rules could apply to their operations. Background: The Illinois Department of Revenue Issued Emergency and Proposed Local Tax Sourcing Regulations after the Supreme Court of Illinois Invalidated Its Old Rules in Hartney Illinois has perhaps the most complex sales and use tax system in the country. One driver of this complexity is the fact that the...

Continue Reading

STAY CONNECTED

TOPICS

ARCHIVES