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The Sales Tax Institute is dedicated to
educating business people about sales and use tax concepts and issues. We enable companies
to minimize the tax expenses and administrative costs related to accurate compliance by
offering three training courses throughout the United States.
The course offerings are: E-STI: Sales Tax Concepts online- Introduction, Definitions & Nexus Sales Tax Concepts,
Basics of Sales and Use Tax,
and the Advanced Sales and
Use Tax Workshop.
If you would like more information about
upcoming courses, send a message to courseinfo@salestaxinstitute.com.
The Sales Tax Institute was founded by
Diane L. Yetter of
Yetter Consulting Services, Inc.
HOT NEWS UPDATE: 06/29/2009
Vermont Announces Amnesty Program Dates Vermont has approved a six week amnesty program beginning July 20, 2009 and ending August 31, 2009. During this time, certain tax penalties may be waived upon payment of the tax and interest due, without the need for proof of reasonable cause or the absence of willful neglect. The amnesty program will apply to any tax type and any periods for which the due date of the return was before January 26, 2009, but will not apply to those penalties in which the commissioner would not have the sole authority to waive .(Highlights of 2009 Tax Legislation, Vermont Department of Taxes, June 11, 2009). Nevada Increases Local School Support Tax by .35% A revenue bill has been passed by the Nevada Legislature that will temporarily increase the combined sales and use tax rate by imposing an additional Local School Support Tax of 0.35%. This increase will be imposed on every county in the State for the period July 1, 2009 through June 30, 2011. (S.B. 429, as passed by the Nevada Legislature on May 22, 2009) Hawaii Announces Amnesty Program The Hawaii Department of Taxation is offering a “Tax Fresh Start Program” to taxpayers who owe eligible taxes for any taxable period ending on or before December 31, 2007. The program, effective May 27, 2009 through June 26, 2009, covers all taxes administered by the Department and is available to eligible taxpayers who have failed to file a return for a taxable period, or have underreported tax due on a previously filed return. The program offers a 50% reduction in interest, waived penalties, and potentially avoiding referral for criminal prosecution. Taxpayers are not be eligible for the program if they are currently under audit by the Department or the federal government, currently under criminal investigation or litigation, or if they are currently in the Department’s collection program. Taxpayers who are not eligible for a certain tax types may still be eligible for others. (News Release, Hawaii Department of Taxation, May 27, 2009). City of Colorado Springs Enacts Tax Amnesty Program Beginning May 12, 2009 and ending August 14, 2009, the City of Colorado Springs is offering a Tax Amnesty Program that provides an opportunity for businesses within the City to voluntarily pay any past due sales, use, lodgers, auto rental, bicycle and movie admission tax liabilities without penalties and with reduced interest. During this period, interest will be assessed at 6%, instead of the normal 18%. All businesses and individuals who have failed to file a return or have underreported the tax on a previously filed return for any period ending on or before March 31, 2009 are eligible for the program, even if the taxpayer is currently under audit. Taxpayers are not eligible if they have already entered into a written agreement with the City or have accepted a settlement offer. (News Release, City of Colorado Springs, May 11, 2009) Kansas Amends Limitation Period for Refunds and Credits Kansas legislation amends the limitation period for sales tax refund and credit claims. Under old legislation, no refund or credit was allowed after a three year period from the due date of the return, unless the taxpayer filed a claim before the end of the period. Under amended legislation, taxpayers must file a claim within one year of the return due date to be eligible to receive a refund or credit (Senate Sub. For Sub. For H.B. 2365, Laws 2009, effective upon publication in the Kansas Register). Tax Amnesty Enacted in Maryland Legislation has been enacted in Maryland allowing for a tax amnesty period from September 1 through October 30, 2009. The amnesty period is applicable to income, withholding, sales and use, and admissions and amusement taxes. During this period, taxpayers may file any delinquent returns and pay all tax liabilities or enter into an agreement with the Comptroller. The Comptroller will waive one half of the interest due and all civil penalties, except previously assessed fraud penalties. Taxpayers who have more than 500 U.S. employees, who were previously granted amnesty in 2001, or were eligible for the 2004 Chapter 557 settlement period, are ineligible for the 2009 amnesty program. Taxpayers will not face any criminal charges arising from any filed return or paid taxes during the program. Other rules apply (S.B. 552, effective June 1, 2009). Louisiana Tax Amnesty Period Set The recently enacted Louisiana Tax Delinquency Act of 2009 establishes a tax amnesty program for a period not to exceed two consecutive months, set for July 1, 2009 and June 30, 2010. The amnesty program will apply to all taxes administered by the Department with the exception of motor fuel taxes. The legislation introduces post amnesty collection penalties. If, following termination of the tax amnesty period, the secretary issues a deficiency assessment for a period for which amnesty was taken, the secretary shall have the authority to impose penalties and institute civil or criminal proceedings as authorized by law only with the respect to the difference between the amount shown on the amnesty application and the correct amount of tax due. The legislation also provides a 20% cost of collection penalty on any deficiency assessed for any taxable period due on or after July 1, 2001 and ending before January 1, 2009 (H.B. 720, Regular Session 2009). New Jersey Enacts Rules to Implement Amnesty Program New rules have been adopted for New Jersey’s tax amnesty program. The amnesty program will begin May 4, 2009 and end June 15, 2009. The amnesty will apply for all taxes administered and collected by the Division of Taxation for returns due on or after January 1, 2002 and prior to February 1, 2009. Eligible taxpayers will have to pay the amount of tax owed and one-half of the balance of interest that is due as of May 1, 2009, without and penalties or referral recovery fees. Any taxpayer under criminal investigation or charge for a state tax matter, as certified by a county prosecutor or by the Attorney General, will not be eligible for the Amnesty. If an eligible taxpayer fails to pay the tax during the amnesty period, an additional 5% penalty will be imposed. This penalty will not be waived or abated and is in addition to any other penalties, interest, or other collection costs as authorized by law. (N.J.A.C. 18:39-1.1 ~1.8, New Jersey Division of taxation, effective March 26, 2009) Minnesota State Sales and Use Tax Rate Increases July 1, 2009 to 6.875% Beginning July 1, 2009, the Minnesota sales and use tax rate will increase from 6.5% to 6.875%. In the November 2008 general election, voters approved a constitutional amendment to increase the tax rate to protect various environmental issues. Sales tax rate charts on the Minnesota Department of Revenue Web site will be updated to reflect this increase. (General Sales and Use Tax Rate Increases to 6.875%, Minnesota Department of Revenue, April 2009) Virginia Authorizes Tax Amnesty During Fiscal Year 2010 A tax amnesty program lasting 60-75 days in Fiscal Year 2010 (July 1, 2009 – June 30, 2010) has been authorized. Exact dates for the amnesty are not yet known. During this period, civil and criminal penalties and 50% of the interest due will be waived if the remaining balance is paid in full. Eligible taxpayers include those who currently have an outstanding assessment or who have not filed a return for any Department of Taxation-administered tax. Taxpayers are ineligible if they are currently under investigation or prosecution for filing a fraudulent return or failing to file a return with the intent to evade tax, have an assessment or unfiled return due within 90 days of the first day of the program, or have an individual, fiduciary, or corporate income tax liability attributable to taxable year January 1, 2008 or later. If eligible balances are not paid during the amnesty program, an additional penalty of 20% will be assessed on the unpaid tax. (S.B. 1120, Laws 2009, effective July 1, 2009) Arizona Tax Amnesty Program Authorized The Arizona Department of Revenue has been authorized to extend a tax amnesty program beginning May 1, 2009 and ending June 1, 2009 for Individual and Corporate Income, Transaction Privilege, Use, Withholding, Partnership, Fiduciary, and Luxury taxes. Eligible taxpayers who pay back taxes in full during this period will not be penalized or criminally prosecuted, and may qualify for a reduced interest rate. Amnesty is available for periods beginning on or after January 1, 2002 and ending before January 1, 2008 for taxes filed on an annual basis. For taxes filed on a quarterly basis, amnesty is available for periods beginning on or after January 1, 2003 and ending before January 1, 2008. To qualify, Amnesty Tax Returns must be accompanied by the Amnesty Application form and must be filed or postmarked and paid in full by June 1, 2009.
Individuals and businesses who failed to file a tax return, failed to report all income or all tax, interest and penalties due, claimed incorrect credits and deductions, or misrepresented or omitted tax due are eligible for the program, even if they are non-residents, part-year residents, or taxpayers under audit. Taxpayers who are seeking amnesty for finalized audit periods, are under criminal investigation, or are party to criminal proceedings for fraud, failure to file or failure to pay Arizona taxes are not eligible. (S.B. 1003, Laws 209, First Special Session, effective 90 days after adjournment)
Minnesota Introduces Bills Proposing to Tax Some Internet Sales The Minnesota House of Representatives and the Minnesota Senate have both introduced bills that are similar to the New York “Amazon law.” In both bills, a retailer is presumed to have a solicitor in the state if it enters into an agreement with a resident under which the resident, for a commission or other consideration, directly or indirectly refers potential customers, whether by link on an internet web site, or otherwise, to the seller. This presumption will only apply if the total gross receipts from customers in the state who were referred by these resident solicitors are at least $10,000 in the 12-month period proceeding the calendar quarter in which the sale was made. The presumption can be rebutted by proof that the resident solicitor did not engage in any solicitation that would satisfy the U.S. Constitution during the 12-month period in question. (H.F. 401 and S.F. 282, as introduced in the Minnesota House of Representatives and the Senate on January 29, 2009) New York Supreme Court Dismisses Amazon's Challenge on New Provision Amazon.com’s lawsuit challenging New York’s new statutory provision concerning Internet retailers has been dismissed. Under the new Commission-Agreement Provision that Governor Paterson signed into law, retailers that solicit business by entering into an agreement with a resident of the state, for a commission or other consideration, that directly or indirectly refer potential customers, whether by link on an internet website, and the receipts from these referrals is in excess of $10,000, must collect and remit New York sales tax. Amazon filed suit against the State alleging that the provision violated the Commerce Clause because it imposes tax collection obligations on out-of-state entities that have no substantial nexus with New York. Amazon also contended that it violated the Due Process Clause because it effectively created an irrebuttable presumption of ‘solicitation’ and is overly broad and vague. Amazon further contended that it violated the Equal Protection Clause because it intentionally targeted Amazon.
While the New York Supreme Court held that even accepting all of the facts alleged by Amazon to be true, the Court held that there was no basis upon which Amazon could prevail. Therefore, the Court dismissed Amazon’s arguments and the lawsuit for failure to state a cause of action. The State of New York stated that the “neutral” Commission Agreement simply obligates out-of-state sellers to shoulder their fair-share of the tax-collection burden when using New Yorkers to earn profit from other New Yorkers. (Amazon.com LLC v. New York Department of Taxation and Finance, New York Supreme Court, New York County, Index No. 601247/08, January 12, 2009)
Massachusetts Provides Details on Limited Amnesty Program The Massachusetts Commissioner of Revenue has established a two month amnesty program commencing on March 1, 2009 and ending on April 30, 2009. The program was created in effort to encourage the payment of delinquent tax for individuals, including income tax and use tax liabilities. The program applies only to liabilities for taxable years or periods ending on or before December 31, 2007. To qualify for the amnesty program, the taxpayer must be notified directly from the Commissioner with a “Tax Amnesty Notice.” If the taxpayer pays their full liability of tax and interest due, then the Commissioner is authorized to waive all unpaid penalties including those imposed for failure to file a timely return, failure to file a proper return, failure to timely pay a tax liability, and failure to pay the proper amount of any required estimated tax payments for such period. Penalties that have been or could be assessed against a taxpayer for any other tax types are not eligible for waiver under the Amnesty Program. (Technical Information Release 09-3, Massachusetts Department of Revenue, February 19, 2009) Illinois Initiates Voluntary Disclosure for Use Tax The Illinois Department of Revenue is offering taxpayers the option to voluntarily report and pay unpaid use tax liabilities accrued during the past four years. Taxpayers will be contacted by the Department and must pay all Illinois use tax and interest owed within 60 days of being notified. All penalties will be waived, as well as any tax and interest owed for the fifth and sixth years. (Illinois CPA Society, Come Clean with Illinois Use Tax, 01/31/09) California Increases State Sales and Use Tax Rate In an effort to resolve the state budget deficit, California will be imposing a 1% temporary increase (from 6.25% to 7.25%) in the state sales and use tax rate, effective April 1, 2009. The 1% increase (specifically dedicated to the General Fund portion of the state rate) will remain in effect until July 1, 2011, unless an amendment to the California Constitution is approved. If an amendment is approved the increase would then expire July 1, 2012. (Ch. 18 (A.B. 3), Laws 2009, Third Extraordinary Session, effective February 20, 2009, and operative as noted) Legislation Introduced to Change Statutory Definition of “Retailer Engaged in Business” in California A.B. 27 and A.B.178 have been introduced to include in the definition of a “retailer engaged in business in this state” any retailer entering into an agreement with a resident of California under which the resident, for a commission or other consideration, directly or indirectly refers potential customers of tangible personal property, whether by a link or Internet Web site or otherwise, to the retailer, if the cumulative gross receipts from sales to customers referred pursuant to these agreements is in excess of ten thousand dollars during the preceding four calendar quarters. If the retailer can demonstrate that during the four quarters in question, the resident did not engage in referrals in California on behalf of the retailer that would satisfy the requirements of the United States Constitution commerce clause, the proposed new definition is inapplicable to the retailer.
Additionally, A.B. 27 also seeks to include in the definition any retailer who has any representative, agent, salesperson, canvasser, independent contractor, or solicitor servicing or repairing tangible personal property in California under the authority of the retailer. (A.B. 27 as introduced in the third extraordinary session by the California Assembly on January 29, 2009, and A.B. 178, as introduced in the regular session by the California Assembly on February 2, 2009)
New York Supreme Court Dismisses Overstock Challenge on New Provision The New York Supreme Court dismissed Overstock’s lawsuit challenging the state’s Commission-Agreement Provision, just shortly after the dismissal of a similar lawsuit filed by Amazon.com. The new provision requires out-of-state retailers to collect and remit New York sales and use taxes if they have a commission agreement with an in-state resident based on referral of customers, and earn more than $10,000 of revenue from New Yorkers as a result of the business agreement. Under Overstock’s affiliate program agreement, affiliates were allowed to send emails containing Overstock’s name as long as the recipient had consented to receive the email or if the affiliate had a pre-existing business relationship with the recipient. Overstock was aware of this solicitation and provided incentives to its affiliates. Overstock’s lawsuit was dismissed because there were no arguments made that were materially different from Amazon’s lawsuit. (Overstock.com, Inc, v. New York Department of Taxation and Finance, New York Supreme Court, New York County, Index No. 107581/08, January 12, 2009) Connecticut Offers Tax Amnesty Program The State of Connecticut will offer a tax amnesty program from May 1, 2009 through June 25, 2009 to taxpayers owing certain Connecticut taxes, including sales and use taxes, for any taxable period ending on or before November 30, 2008. To be eligible, a taxpayer must have either failed to file a return for the taxable period or underreported the amount of tax on a previously filed return. Amnesty will not be offered on existing bills, or if the taxpayer is currently under audit by the Connecticut Department of Revenue Services or party to any criminal investigation or any civil or criminal litigation involving the Department. (Connecticut Tax Amnesty – May 1 – June 25, 2009, Connecticut Department of Revenue Services, December 30, 2008) Alabama Announces Tax Amnesty Program The Alabama Revenue Commissioner and State Governor announced a tax amnesty period from February 1, 2009 to May 15, 2009. The amnesty program, known as “Operation Clean Slate”, is for any outstanding taxes owed, including, but not limited to, sales and use tax, personal and corporate income tax, and business franchise tax. In order to be eligible, participants cannot already be under investigation or have previously been contacted by the Department of Revenue with regards to their tax liability. Any person who participates in the program will not be subject to civil penalties or late fees. Any citizen or business with outstanding tax liability is strongly urged to participant in this program as the Department plans on implementing a new state-of –the-art computer system that will aide in identifying unpaid and understated taxes owed. (Press Release, Office of Alabama Governor Bob Riley, January 15, 2009) Utah Sales and Use State and Local Rate Changes Effective January 1, 2009, Utah’s state sales tax rate increased from 4.65% to 4.70%. The state tax on food sales remained at 3%. Utah County will assessed a new County of the Second Class Airport Highway and Public Transit Tax at the rate of 0.25%. Riverdale established a new city or town option tax at the rate of 0.2%. North Logan decreased its Municipal Energy Tax to 3%. Daniel imposed a new Municipal Energy Tax of 4%. (Utah Sales and Use Tax Quarterly Rate Changes, Utah State Tax Commission, November 6, 2008) Minnesota To Increase Sales and Use Tax Rate Voters approved an increase to Minnesota’s sales and use tax rate from 6.5% to 6.875%. The increase will take effect on July 1, 2009. The proceeds will be dedicated to outdoor heritage, clean water, parks and trails, and arts and cultural heritage. (Constitutional Amendment, Minnesota Secretary of State, November 5, 2008) 2009 Tax Holidays Chart updated regularly:Click here for chart |
