Hot News Update: 02/22/2012

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Puerto Rico Tax Amnesty Available Through February

Puerto Rico has enacted a tax amnesty program that will run through February 29, 2012, or a later date pursuant to the Act. Interest, penalties, surcharges, and any other additions to tax are waived for any taxpayer that pays the tax owed to the Government of Puerto Rico in full before the amnesty cutoff date. The tax amnesty program applies to income tax, inheritance and gift tax, and special real property tax. The Act also provides a mechanism to dispute debts. (Act No. 218, Laws 2011, effective November 7, 2011) (02/22/2012)

Amnesty Chart

Updated regularly - awaiting legislation for additional programs which are added as enacted or announced: Click here for chart (02/16/2012)

2012 Tax Holidays Chart

Updated regularly - information is updated as states announce dates and participation: Click here for chart (02/16/2012)

Wyoming Offers Guidance on Vendor Compensation Credit

The Wyoming Department of Revenue reminds vendors and direct payers that effective with the January 2012 payment reporting period, they are allowed to take a vendor compensation credit on their Wyoming sales and use tax returns. The credit is equal to 1.95% of the first $6,250 due in taxes and 1% of any amount exceeding $6,250, with the credit not to exceed $500 total in any month regardless of the number of business licenses held by a vendor. Tax returns and payments must be postmarked or filed electronically by the 15th day of the month in which the tax is due. Any vendor returns currently due must be filed and paid in full, and the account must not have outstanding balances. If an arrangement has been made to pay past-due balances, the payment plan must be current on all payments due. If a vendor is currently under audit, the vendor’s returns may still qualify for the credit as long as the audit balance is not delinquent. (01/17/2012)

Congress Introduces Marketplace Equity Sales Tax Bill

A new online sales tax bill has been introduced in Congress. Contrary to the Main Street Fairness Act proposed this summer, participation in Streamlined Sales Tax is not required. According to the bill, in order for a state to require the collection of online sales and use taxes, the state must first implement a simplified system of sales tax administration, meeting four requirements. Remote sellers with less than $1 million in U.S. sales or $100,000 in sales in the state are exempt. Remote sellers will only have to file one sales and use tax return specific to remote sellers for the state, and they cannot be required to file returns more frequently than other sellers. There must be a uniform statewide tax base. Finally, remote sellers must collect sales and use tax under one of three rate structures: a single rate blending the state rate and the average local rate; the maximum state rate exclusive of local rates, or; the tax rate of the customer’s location, in which case the state must make available software that eases the burden of collecting at multiple rates. If a state imposes a lower rate on food or drugs and medicine, it may require remote sellers to collect sales and use tax at these rates. Once a state is authorized, the state may begin collecting six months after publishing a notice that lists the requirement, the criteria under which the collection is required, the effective date, the rate(s), and where remote sellers can obtain the tax filing return. (H.R. 3179) (11/14/2011)

Senate Introduces Marketplace Fairness Act

On November 9, 2011, a bi-partisan group of U.S. senators introduced legislation that would give states implementing simplification requirements the authority to require remote sellers to collect sales and use tax. The legislation, called the Marketplace Fairness Act, would not limit the authorization to states who are members of the Streamlined Sales and Use Tax (SST) Agreement but would also apply to other states that implement some minimal simplification provisions. This follows other legislation on remote seller sales tax collection that has been introduced in Congress earlier this year. (11/14/2011)

Ohio Approves Tax Amnesty Program

Ohio Governor John R. Kasich has signed legislation approving a tax amnesty program that will run from May 1, 2012 to June 15, 2012. The program will apply to taxes which were due and payable as of May 1, 2011. The amnesty program will apply to corporate franchise tax, commercial activity tax, estate tax, state and local taxes, including sales and use taxes, motor fuel taxes, cigarette taxes, school district income taxes, and tangible personal property taxes. Under the program, taxpayers will be allowed to pay certain overdue taxes including half of any accrued interest without incurring fines or civil or criminal penalties. Qualifying taxes do not include any tax for which a notice of assessment or audit has been issued, for which a bill has been issued relating to any tax period that ends after the effective date, or for which an audit has been conducted or is being conducted. (10/24/2011)

California Delays Implementation of Remote-Seller Nexus Law

California Governor Edmund Brown has signed new legislation that delays the implementation of click-through and affiliate nexus provisions that were enacted earlier this year (under A.B. 28). Under the new law, the enactment of the click-through and affiliate nexus provisions is conditional on federal authorization for states to require sellers to collect taxes on sales of goods to in-state customers regardless of the seller’s location. Effective retroactively to June 28, 2011, the new law restores the definition of a “retailer engaged in business in the state” to the definition that was in place before A.B. 28 was enacted. (10/24/2011)

Main Street Fairness Act Introduced in Congress

Both houses of Congress introduced legislation on July 29, 2011 that would give member states of the Streamlined Sales and Use Tax (SST) Agreement to collect sales tax from remote sellers that do not qualify for the small-seller exception although this is not defined in the bill. The legislation is referred to as the Main Street Fairness Act. Similar legislation was introduced previously but did not pass. Several provisions that appeared in previous versions of the bill have been eliminated. These include the requirement that the minimum SST simplifications include a single sales and use tax rate per taxing jurisdiction (the SST Agreement currently includes this requirement), a path to SST membership for federally recognized Indian tribes that comply with the Agreement, and a mandate that the minimum simplification requirements in the Agreement apply to sales and use tax on communications services. The new versions of the bill expand on previous versions’ requirement for reasonable vendor compensation by finding that the SST Agreement’s currently mandated compensation satisfies the minimum requirement. There are limitations on the impact of collection of tax under this bill and the creation of nexus for other taxes. The new bills would provide for judicial review of SST Governing Board actions by the U.S. Court of Federal Claims (S. 1452 and H.R. 2701, introduced in both houses of Congress on July 29, 2011) (08/19/2011)