Stay up to date with sales tax: Join our mailing list!


The Multistate Tax Commission opened a sales/use tax and income/franchise tax amnesty program for online marketplace sellers during the fall of 2017. Online marketplace sellers responded and a total of 852 of them applied to participate, overwhelming the MTC office that only deals with about 100 taxpayers per year.

Originally, the MTC received all the taxpayer’s necessary documentation before forwarding it to the state. Given the volume of applicants, the committee agreed to expedite the process by allowing taxpayers to send final voluntary disclosure agreements, tax registration forms, and other documents directly to the states. This procedural change only applies to sellers who are still waiting to receive state-signed voluntary disclosure agreements. The MTC will inform sellers if they have the option to send documents directly to the states.

For the previous four-year period, thirty applicants reported more than $1 million in back tax liability. Around a quarter of all applicants reported at least $100,000 in back tax liability.

Although the MTC program is closed, taxpayers who believe they have a liability should consider state offered amnesty programs or a voluntary disclosure.  Some states may be willing to negotiate with online sellers.  We are working with some states to negotiate more favorable terms. If you are interested, contact us.
 

(01/29/2018)

Effective December 1, 2017, Wisconsin is expanding its exemption from sales tax for lump sum contracts to apply to all construction contracts and to subcontractors. An exempt construction contract is defined as a “contract to perform real property construction activities and to provide products.” This rule exempts the sale of tangible property that is not affixed to real property from sales tax on either a time and material or a lump sum contract.  In these cases, the contractor is deemed the consumer and owes the use tax on the cost of the materials. The expanded exemption is first applicable to a contract that is entered into or extended, modified, or renewed on December 1, 2017.



Additionally, products sold by a subcontractor to a prime contractor, or to another subcontractor for eventual sale to the prime contractor, as part of a construction contract are exempt if:
 

  • the total sales price of all products is less than 10% of the total amount of the construction contract; or
  • the products will be sold by the prime contractor as part of a construction contract, and that sale is exempt as a sale of products by a prime contractor.


The subcontractor is considered the consumer of the products and must pay the sales or use tax on them.
 

The subcontractor is considered the consumer of all products used by the subcontractor in real property construction activities, but the subcontractor may purchase, without tax, for resale, products that are sold by the subcontractor to the prime contractor or another subcontractor as part of the subcontractor’s construction contract for resale to the entity and that are not consumed by the subcontractor in real property construction activities.
 

No use tax is due by either the prime or subcontractor for materials incorporated or sold to an exempt entity for a real property project. (Act 59 (A.B. 64), Laws 2017)

(11/28/2017)

Effective September 23, 2017, Wisconsin has enacted an exemption for prepared food sold by a retailer, if the prepared food meets the following conditions:

 

  • The prepared food is not candy, soft drinks, or dietary supplements;
  • The retailer manufactures the prepared food in a building that is assessed for Wisconsin property tax purposes as manufacturing property, or in a building that would be assessed as such if the building was located in Wisconsin;
  • The retailer makes no retail sales of prepared food at the building where the food is manufactured; and
  • Any of the following applies: The retailer freezes the prepared food prior to its sale and sells it at retail in a frozen state, and the prepared food is not sold with eating utensils that are provided by the retailer, or the prepared food consists of more than 50 percent yogurt.


(Act 59 (A.B. 64), Laws 2017, effective September 23, 2017)
 

(11/28/2017)

As part of Wisconsin’s enacted budget bill, Wisconsin’s sales tax on internet access charges is repealed, effective July 1, 2020. Our previous news item Congress Approves Permanent Extension of Internet Tax Freedom Act details how an end date of June 30, 2020 was established for seven states (including Wisconsin) that imposed a tax on internet access. (Act 59 (A.B. 64), Laws 2017)

(11/27/2017)

The Multistate Tax Commission (MTC) has announced a sales/use tax and income/franchise tax amnesty program for online sellers that will run from August 17 to November 1, 2017 (previously October 17, 2017). Qualified online sellers with potential tax liability may be able to use the MTC's voluntary disclosure agreement (VDA) to negotiate a settlement during the amnesty period if they meet certain eligibility requirements. Taxpayers that have not been contacted by any of the states participating in the amnesty program will be able to apply to start remitting sales tax on future sales without penalty or liability for unpaid, prior accumulated sales tax in the participating states. 25 MTC member states have agreed to participate in the amnesty program. The participating states include: 

 

  • Alabama
  • Arkansas
  • Colorado (sales/use tax only)
  • Connecticut
  • District of Columbia (may not waive all prior periods)
  • Florida
  • Idaho
  • Iowa
  • Kansas
  • Kentucky
  • Louisiana
  • Massachusetts (special provisions apply)
  • Minnesota (special provisions apply)
  • Missouri
  • Nebraska (may not waive all prior periods)
  • New Jersey
  • North Carolina
  • Oklahoma
  • Rhode Island
  • South Dakota
  • Tennessee
  • Texas 
  • Utah
  • Vermont
  • Wisconsin (will require payment of back tax and interest for a lookback period commencing January 1, 2015 for sales/use tax, and including the prior tax years of 2015 and 2016 for income/franchise tax)

 

Some of the additional states may require a limited look-back period for prior tax liabilities. Sellers who wish to participate in the program will need to file the voluntary disclosure program paperwork during the program dates. The MTC will route the paperwork for each participating state for which the seller is seeking amnesty protection. For more details visit the MTC website.

 

UPDATE: The Multistate Tax Commission's online seller amnesty program is now over. If you didn't take advantage of this program but realize you need to evaluate your activities, you can contact us here.

(11/07/2017)

Pages

Scroll to Top