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Effective July 1, 2017, graphic arts machinery and equipment are included in the Illinois manufacturing and assembling machinery and equipment exemption. Previously, equipment used in the graphic arts and printing industry were excluded from the manufacturing exemption as there was a separate exemption.  This exemption expired August 30, 2014 under the Sunset provisions.  For more information see our prior tip. (Illinois SB 9)

(09/28/2017)

Starting September 1, 2017, Airbnb will collect and remit state and municipal taxes on all eligible bookings in South Dakota. The following taxes will be collected and remitted by Airbnb: state sales tax, municipal sales tax, municipal gross receipts tax, and tourism tax. The appropriate taxes will be charged when booking through Airbnb.If the host rents their unit on other platforms that do no collect the tax on their behalf, they should continue to maintain their registration and collect the tax.  Even though Airbnb will be collecting the tax, the hosts should continue to file returns reporting the gross sales and then showing the Airbnb sales as non-taxable sales. (Airbnb reaches tax agreement with South Dakota, will begin collecting taxes Sept. 1, South Dakota Department of Revenue)

(09/28/2017)

The North Carolina Department of Revenue wishes taxpayers to take note of a sales and use tax exemption for large fulfillment facilities made effective July 1, 2017, but applicable to sales or purchases made on or after that date. North Carolina provides a sales and use tax exemption for “sales of equipment, or an accessory, an attachment, or a repair part for equipment,” that meets all of the following requirements:

 

  • “Is sold to a large fulfillment facility;
  • Is used at the facility in the distribution process, which includes receiving, inventorying, sorting, repackaging, or distributing finished retail products;
  • Is not electricity”

 

To be considered a “large fulfillment facility,” a facility must meet both of the following conditions:

 

  • “The facility is used primarily for receiving, inventorying, sorting, repackaging, and distributing finished retail products for the purpose of fulfilling customer orders;
  • The Secretary of Commerce has certified that an investment of private funds of at least one hundred million dollars ($100,000,000) has been or will be made in real and tangible personal property for the facility within five years after the date on which the first property investment is made and that the facility will achieve an employment level of at least 400 within five years after the date the facility is placed into service and maintain that minimum level of employment throughout its operation.”

 

The exemption will be forfeited if the level of investment or employment is not timely made, achieved, or maintained. If an exemption is forfeited, the taxpayer becomes liable for all past sales and use taxes avoided resulting from the forfeiture (N.C. Gen. Stat. §105-164.13(5o) and Important Notice: Sales and Use Tax Exemption for Large Fulfillment Facilities, North Carolina Department of Revenue, July 24, 2017).

(09/28/2017)

The New Jersey Division of Taxation has announced a voluntary disclosure program for out-of-state sellers with click-through agreements with businesses in New Jersey. New Jersey had previously enacted click-through nexus legislation, effective July 1, 2014. The voluntary disclosure program will run from August 21, 2017 to November 21, 2017. Businesses will be able to enter into an agreement with the Division and comply with the state’s registration and reporting requirements based on these terms:

 

  • The taxpayer must file any required returns for the two quarters between January 1, 2017 and June 30, 2017. All prior periods will be considered closed.
  • All penalties will be waived.
  • Statutory interest (prime rate plus 3% as applicable to each period at issue) will be assessed.
  • Within 45 days of the execution of an agreement with the Division, taxpayers will register with the Division of Revenue and Enterprise Services. They will electronically file quarterly Sales and Use Tax returns, report all sales subject to New Jersey Sales Tax, and remit payment of the tax due.
  • The taxpayer will pay statutory interest within 30 days of filing the Sales and Use Tax returns.
  • Participants must not have been contacted by the Division of Taxation regarding sales and use tax compliance. 

 

This program is in addition to the MTC Online Seller Amnesty in which New Jersey is also participating.  This program will be available to those with click through nexus rather than inventory in a 3rd party warehouse which is available under the MTC Online Seller Amnesty.

 

To participate in the program, taxpayers should contact Stephen L. Szabo III, Auditor, Nexus Audit Group at New Jersey Division of Taxation, PO Box 269, 50 Barrack St., Trenton, NJ 08695-0269. He can also be contacted at 609-984-7985 or Stephen.Szabo@treas.nj.gov. (New Jersey Offers Voluntary Disclosure Program to Out-of-State Sellers with Customer Referral Agreements, August 17, 2017) 

(08/23/2017)

In Texas, a limited liability company (LLC) may claim a partial exemption from Texas sales and use tax on its purchase of taxable items much like a joint venture or partnership. To qualify for the exemption, the LLC must have a medical purpose.

 

Partial exemptions on purchases of taxable items may be granted to an LLC if:

 

  • one or more of its members qualifies for an exemption from sales and use tax under Section 151.310 (Religious, Educational, and Public Service Organizations);
  • the LLC has a medical purpose;
  • the LLC operates similarly to a joint venture;
  • the LLC files as a partnership for federal income tax purposes; and
  • the items purchased relate to the tax-exempt purpose of the exempt member

 

The amount for the partial exemption will equal the percentage of the LLC that is owned by an exempt member or members of the LLC. The tax exemption amount claimed by the LLC is capped and cannot exceed the amount of charity care or government-sponsored indigent health care provided by the LLC. Eligible LLCs that did not claim a sales tax exemption on their qualifying purchases may file a claim for refund for all open periods within the statute of limitations.  (Letter No. 201707003L, (Jul. 7, 2017))

(08/23/2017)

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