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Idaho has provided guidance on the sales tax responsibilities of individuals who will make sales or rentals to visitors who come to Idaho to view the total solar eclipse on August 21, 2017. There is no exemption for short term or one day sales even by individuals who are not businesses.  Individuals making sales or rentals must register to collect and remit the Idaho sales tax, lodging tax, and any applicable local sales tax. Taxable transactions include sales of food, t-shirts, souvenirs, etc.; rentals of a home, vacation home, cabin, trailer, a room in a home, etc., for temporary lodging; and renting out a yard, driveway, parking lot, or other space for overnight camping.

 

Idaho has taken the position that homeowners that rent their homes or rooms to the public for temporary lodging are still subject to the tax collection requirements.  See our prior tip on this issue at http://www.salestaxinstitute.com/resources/news/idaho-homeowners-must-charge-sales-tax-short-term-rentals

 

Individuals can register online at www.tax.idaho.gov   to get permits for Idaho sales tax, travel and convention tax, and Greater Boise Auditorium District tax. Individuals who are only selling or renting during a one-time event or a few times a year can use one application to apply for temporary permits. Individuals making ongoing sales or rentals need to register for regular permits. To register to collect other local sales taxes, vendors should contact the local taxing authority. For more information, visit tax.idaho.gov/eclipse. (Tax Commission News Release, Idaho State Tax Commission, June 28, 2017)

(07/26/2017)

Alabama has issued a notice regarding legislation that changes the Simplified Sellers Use Tax program, effective July 1, 2017. The legislation allows the Alabama Department of Revenue (DOR) to initiate monthly distributions of the Simplified Sellers Use Tax collectionsto the localities. The DOR may disclose the name of eligible sellers, the effective date the eligible seller began participating in the program and, if applicable, the cease date the eligible seller ceased to participate in the program. As of July 1, 2017, this information will be made publicly available on the DOR’s website. The removal of the 6-month deferral restriction on eligible sellers takes effect July 1, 2017. A participant in the program may remain in the program unless the seller establishes nexus via a physical location or storefront, place of inventory, or affiliation with another business with a physical presence making retail sales in Alabama. The invoice statement requirement is modified to also allow for a statement on the website of the eligible seller. The eligible seller shall provide Alabama customers with a statement or invoice showing that the simplified sellers use tax was collected and is to be remitted on the purchaser’s behalf.(Notice, Alabama Department of Revenue, June 29, 2017)

(07/26/2017)

On June 12, 2017, Rep. Jim Sensenbrenner (R-WI) and House Judiciary Chairman Bob Goodlatte (R-VA) introduced the No Regulation Without Representation Act of 2017. A previous version of this bill had been introduced in 2016 and failed to pass. Under the proposed bill, a State may tax or regulate a person’s activity in interstate commerce only when such person is physically present in the State during the period in which the tax or regulation is imposed. Under the proposed bill, the physical presencerequirement would apply to sales and use taxand net income and other business activities taxes, as well as the states’ ability to regulateinterstate commerce. “Physical presence” in a state includes:

 

  • maintaining a commercial or legal domicile in the state;
  • owning, holding a leasehold interest in, or maintaining real property such as an office, retail store, warehouse, distribution center, manufacturing operation, or assembly facility in the state;
  • leasing or owning tangible personal property (other than computer software) of more than de minimis value in the state;
  • having one or more employees, agents or independent contractors present in the state who provide on-site design, installation, or repair services on behalf of the remote seller;
  • having one or more employees, exclusive agents or exclusive independent contractors present in the state who engage in activities that substantially assist the person to establish or maintain a market in the state; or
  • regularly employing in the state three or more employees for any purpose.

 

“Physical presence” in a state would not include:

 

  • entering into an agreement under which a person, for a commission or other consideration, directly or indirectly refers potential purchasers to a person outside the state, whether by an Internet-based link or platform, Internet Web site or otherwise;
  • any presence in a state for less than 15 days in a taxable year (or a greater number of days if provided by state law);
  • product placement, setup or other services offered in connection with delivery of products by an interstate or in-state carrier or other service provider;
  • Internet advertising services provided by in-state residents which are not exclusively directed towards, or do not solicit exclusively, in-state customers;
  • ownership by a person outside the state of an interest in a limited liability company or similar entity organized or with a physical presence in the state;
  • the furnishing of information to customers or affiliates in such state, or the coverage of events or other gathering of information in such state by such person, or his representative, which information is used or disseminated from a point outside the state; or
  • business activities directly relating to such person's potential or actual purchase of goods or services within the State if the final decision to purchase is made outside the state.

 

In addition, the bill prohibits the imposition or assessment of a sales, use or other similar tax or a reporting requirement unless the purchaser or seller has physical presence in the state.  This would prohibit all the remote seller legislation (click through, affiliate, economic, marketplace and reporting/notification). If enacted, the legislation would apply with respect to calendar quarters beginning on or after January 1, 2018. (No Regulation Without Representation Act of 2017)

(07/12/2017)

Beginning July 1, 2017, most of the duties performed by the California State Board of Equalization (BOE) will be transferred to the new California Department of Tax and Fee Administration (CDTFA) and the Office of Tax Appeals. The BOE will continue to administer programs related to property taxes, insurance taxes, and excise taxes on alcohol. Until December 31, 2017, the BOE will continue to hear taxpayer appeals on all types of tax and fee matters. Beginning January 1, 2018, the BOE will only hear appeals related to the programs related to property taxes, insurance taxes, and excise taxes on alcohol. The Office of Tax Appeals will hear appeals on all other tax and fee matters (e.g. franchise and personal income tax, sales and use tax, and other special taxes and fees). Requirements to register, file, and pay taxes and to meet other obligations will be the same as required prior to July 1, 2017. Schedules, forms, and payments will generally be the same during the transition. For more information visit the CDTFA website at www.cdtfa.ca.gov.This change is due to the passage of Assembly Bill 102 – the Taxpayer Transparency and Fairness Act of 2017.  There is a lot of uncertainty as to what this means.  We will continue to monitor and update as information becomes available.  (AB-102, signed by Governor June 27, 2017; Special Notice L-507, California Department of Tax and Fee Administration, July 2017)

(07/11/2017)

Tennessee has enacted legislation delaying the start date of the sales and use tax provisions that bring Tennessee sales and use tax law into compliance with the Streamlined Sales and Use Tax Agreement. The provisions are now set to take effect July 1, 2019 (previously July 1, 2017). Tennessee continues its history of delaying the date for full implementation of Streamlined.  It is the only associate member state under the agreement. The sales and use tax changes that have been delayed include: 

 

  • requirements that sales delivered or shipped to the customer be sourced to the delivery or shipping destination;
  • changes to the single article limitation on local option sales taxes;
  • acceptance of alternative documentation to support a resale exemption for drop shipments into the state
  • use of a single sales and use tax return covering multiple dealer locations; and
  • implementation of certain privilege taxes in lieu of sales tax.

 

(Tenn. Code Ann. §67-6-702; Important Notice No. 17-06, Tennessee Department of Revenue, April 2017)

(07/11/2017)

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