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NEWS & TIPS
The Sales Tax Institute reviews numerous sales tax publications to monitor state activity on various topics related to sales and use tax. By checking updates routinely, you may be alerted to an impending tax law change critical to your business.
Browse recent and archived news items by searching relevant categories, states or descriptions at right
The information listed here is high-level summary and background material intended to help you stay current in the dynamic area of sales and use tax. Sources include CCH State Tax Day, Sales and Use Tax Alert, Sales Tax Notes, Vertex, Inc. Reference Manuals, Westlaw, and other miscellaneous state tax newsletters and Department of Revenue notices.
Please note that these summaries omit many details and special rules, and cannot be regarded as legal or tax advice. For more information, be sure to contact your tax advisor.
HOT NEWS UPDATES:
Kansas has enacted a tax amnesty tax program that will take place from September 1, 2015 to October 15, 2015. Penalties and interest will be waived for taxpayers who pay delinquent taxes in full. The amnesty program applies to the following taxes: privilege, income, estate, cigarette, tobacco products, liquor enforcement, liquor drink, mineral severance, state sales and use, and local sales and use taxes. The amnesty program applies only to penalties and interest on liabilities associated with tax periods ending on or before December 31, 2013. The amnesty program does apply to any matter for which, on or after September 1, 2015, taxpayers have received notices of assessment or for which an audit had previously been initiated. Fraud or intentional misrepresentation in connection with an amnesty application voids the application and waiver of any penalties and interest.(H.B. 2109 and S.B. 270, Laws 2015, effective July 1, 2015, and applicable as noted)
South Carolina has enacted a bill authorizing the Department of Revenue (DOR) to create a tax amnesty period during which penalties and interest, or a portion of them, will be waived for taxpayers that voluntarily file and pay all taxes owed. Amnesty will be granted to taxpayers who:
- request an amnesty form and voluntarily file all delinquent tax returns and pay in full all taxes due;
- voluntarily file an amended tax return to correct an incorrect or insufficient original return and pay all taxes due; or
- voluntarily pay in full all previously assessed tax liabilities due within an extended amnesty period as determined by the department. The department may set up installment agreements so long as all taxes are paid within this period.
A taxpayer who has an appeal pending with respect to an assessment will be able to participate in the amnesty program if the taxpayer pays all taxes owed. A taxpayer who is the subject of a state tax-related criminal investigation or criminal prosecution will not be eligible to participate in the program. If the DOR establishes an amnesty period, it must notify the South Carolina General Assembly of the amnesty period at least 60 days before the start of the amnesty period. An administrative fee of 5% must be reimbursed to the department on the total amount collected under amnesty. Any overdue tax debt, as defined in Section 12-55-30, remaining unpaid may have imposed on it at the department's discretion an additional ten percent collection assistance fee. This collection assistance fee initially may be imposed on any overdue tax debt at the close of the extended amnesty period as prescribed by the department. This additional collection assistance fee only may be imposed for a period of one year after the close of the extended amnesty period. (S.B. 526, Laws 2015, effective June 8, 2015)
Oklahoma has enacted legislation authorizing the Oklahoma Tax Commission to establish a Voluntary Compliance Initiative and offer tax amnesty to delinquent taxpayers from September 14, 2015 to November 13, 2015, subject to the availability of funds. Participants who voluntarily file delinquent tax returns and pay the tax due during the compliance initiative period are entitled to a waiver of penalties, interest and other collection fees or costs due on eligible taxes.Eligible taxes include the following taxes that were due and payable for any tax period or periods ending before January 1, 2015: mixed beverage tax; gasoline and diesel tax; gross production and petroleum excise tax; sales and use tax; income tax; withholding tax; and privilege tax. Franchise tax is not included in the initiative.(H.B. 2236, Laws 2015, effective May 20, 2015)
Puerto Rico has enacted a tax amnesty program, effective March 30, 2015 and ending June 30, 2015. The amnesty program applies to corporate and personal income taxes (excluding taxable years beginning after December 31, 2013), estate and gift taxes, sales and use taxes (for taxable periods ended before July 1, 2014), and excise taxes. The program allows certain taxpayers that duly filed declarations or returns to elect to pay, on or before June 30, 2015, the principal balance on tax liabilities already assessed, or awaiting assessment as of December 31, 2014 and to have the interest and penalties waived on the overdue amounts. (Act 44 (H.B. 2316), Laws 2015, effective as noted)
Effective July 1, 2015, for sales and use tax purposes, Nevada has expanded its definition of nexus to include remote sellers if the retailer is: part of a controlled group of business entities that has a component member that has physical presence in Nevada; and the component member engages in certain activities in Nevada that relate to the ability of the retailer to make retail sales to residents of Nevada. The specified activities are when a component member:
- sells a similar line of products or services as the retailer and does so under a business name that is the same or similar to that of the retailer;
- maintains an office, distribution facility, warehouse or storage place or similar place of business in Nevada to facilitate the delivery of tangible personal property sold by the retailer to the retailer’s customers;
- uses trademarks, service marks or trade names in Nevada that are the same or substantially similar to those used by the retailer;
- delivers, installs, assembles or performs maintenance services for the retailer’s customers within Nevada;
- facilitates the retailer’s delivery of tangible personal property to customers in Nevada by allowing the retailer’s customers to pick up tangible personal property sold by the retailer at an office, distribution facility, warehouse, storage place or similar place of business maintained by the component member in Nevada; or
- conducts any other activities in Nevada that are significantly associated with the retailer’s ability to establish and maintain a market in Nevada for the retailer’s products or services.
There is a rebuttable presumption provision included in the legislation stating that a presumption can be rebutted by providing proof that the component member with physical presence in Nevada did not engage in any activity in Nevada that was significantly associated with the retailer’s ability to establish or maintain a market in Nevada for the retailer’s products or services.
The legislation also establishes click through nexus rules which are effective October 1, 2015. A retailer is required to collect and remit sales and use taxes if: the retailer enters into an agreement with a resident of Nevada under which the resident receives certain consideration for referring potential customers to the retailer through a link on the resident’s Internet website or otherwise; and the cumulative gross receipts from sales by the retailer to customers in Nevada through all such referrals exceeds $10,000 during the preceding four quarterly periods ending on the last day of March, June, September and December. The click-through provision can be rebutted by providing proof that each resident with whom the retailer has an agreement did not engage in any activity that was significantly associated with the retailer’s ability to establish or maintain a market in Nevada for the retailer’s products or services during the preceding four quarterly periods. (Ch. 219 (A.B. 380), Laws 2015)