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This was the case, even though the petitioner subsequently relocated to California, because there was no claim or evidence that the tax was erroneously, illegally, or unconstitutionally collected or paid. California imposed California sales tax on the remaining lease payments and, according to the petition, would not honor the tax already prepaid to New York. The amount due under a lease agreement, for the entire period covered under the lease, is immediately subject to New York sales tax. There is no provision allowing a refund of sales tax paid on the lease of a vehicle when the lessee relocates to another state that may also require the lessee to pay tax. (Torquato, New York Division of Tax Appeals, Administrative Law JudgeUnit, DTA No. 816973, March 3, 2000.


The Alabama Supreme Court will not hear the case of Yelverton’s, Inc. v. Jefferson County, which allows the opinion of the Court of Civil Appeals to stand. The taxpayer in this case was found not to have nexus in Jefferson County, and was therefore not required to collect and remit local sales tax for that locally administered jurisdiction. Yelverton’s, a retailer located in Walker County, did not charge local tax for sales shipped into Jefferson County as they did not feel they met nexus requirements for doing so. Jefferson County felt they could interpret substantial nexus differently than the state, and that Yelverton’s had indeed met their nexus requirements. The Court of Civil Appeals had sided with the taxpayer by deciding that while local jurisdictions could issue their own regulations, those regulations should not be too dissimilar from the state’s laws. (Yelverton’s Inc. v. Jefferson County, Court of Civil Appeals of Alabama, No. 2951320, 5/9/97)


The Florida Department of Revenue will allow taxpayers to choose an auditor trained through the Florida Institute of CPAs to conduct and audit of state and local sales and use taxes. The taxpayer pays for the audit, but the DOR will waive penalties, the first $25,000 in interest, and 25% of any additional interest. The auditor is required to turn the audit results over to the DOR for sampling. The pilot project is expected to remain in effect until June 30, 2004.


In California, a recent appellate court decision found Yamaha Corporation was subject to use tax on "gifts" or promotional items shipped out of state. Yamaha removed musical instruments from inventory, tax-free, and shipped them via common carrier to retailers and others as promotional gifts. The California court of appeals ruled that when the merchandise is delivered to a common carrier in California, the transaction is completed within California and therefore is subject to the state’s use tax (Yamaha Corp. of America v. State Board of Equalization, California Court of Appeals, Second Appellate District, Division Three, June 29, 1999)


The act declares an exemption for replacement or repair parts for manufacturing machinery. The amended regulation defines "replacement or repair parts" as including machinery, molds, clothing, dies and tooling used on existing machinery that is directly involved in manufacturing tangible personal property at an existing manufacturing plant. Parts that are to qualify must restore the machinery to its original condition and must be separately defined. Spare parts purchased with machinery incorporated into a new plant are not considered replacement or repair parts. The exemption applies to the portion of an item's sales price or value as follows: 20% for calendar year 2001; 40% for calendar year 2002; 60% for calendar year 2003; 80% for calendar year 2004; and 100% thereafter. Suppliers must collect the total tax on sales of repair or replacement parts unless a Certificate of Exemption is presented. (Form ST-5M)



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