Upcoming National Meeting

50th Annual Meeting

2 ½ day program offering sessions for every state tax and government affairs professional with tax responsibilities. The meeting presents an extensive program covering all types of state and local taxes that business taxpayers are confronted with today. The ever-popular audit sessions and state chamber of commerce roundtables are included, and other conference sessions provide updates on key SAL

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Newsletters & Media

Cost Conscious

ISSUE 19-20; October 4, 2019

TODAY’S TOPIC: SURVEY TIME! The periodic COST Membership Survey was released just over a week ago. If you haven’t already completed it, please click the link below and provide us with your feedback. Topics covered include: educational programs, COST’s Foundation (the State Tax Research Institute, or STRI), demographic information, and participation in COST. The survey consists of 20 questions and

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Bloomberg TAX

Uber, Lyft Being Probed in New Jersey on Misclassifying Drivers

 

New Jersey labor auditors are investigating Uber Technologies Inc. and Lyft Inc. to see if the rideshare companies are wrongly classifying drivers as independent contractors and should be on the hook for employment taxes, according to documents obtained by Bloomberg Law.

IRS Opens PTIN Season as Supreme Court Passes on Fees Case

 

The Internal Revenue Service has announced that preparer tax identification number (PTIN) applications and renewals are now being processed. That’s good news for tax professionals who are gearing up for next season—but there could be some changes on the horizon.

New York City Property Tax Fight Centers on Who Should Solve It

 

Arguments in a lawsuit challenging New York City's property tax system are focused on whether courts are the right place for the dispute.

Arizona DOR Publishes Newsletter on Transaction Privilege Tax Updates

 

The Arizona Department of Revenue Oct. 1 published a newsletter on transaction privilege sales and use tax updates. The publication includes: 1) rules for the filing and payment of tax for remote sellers and marketplace facilitators in the October reporting period, beginning Nov. 1; 2) preparations required for 2020 annual tax license renewals, including updated business locations, names, and mailing addresses; 3) tax rate changes for the town of Fountain Hills and Clarkdale, effective Nov. 1; 4) reminders on tax filing frequency and due dates; and 5) information on online lodging marketplaces, live chat, economic nexus, cyber security awareness, and credit or debit card tax payments. [Ariz. Dep't of Revenue, TPT Newsletter, 10/01/19]

Alabama Tax Tribunal Finds LLC Operated as Merchant, Not Farmer, Producer, Affirms DOR's Assessments

 

The Alabama Tax Tribunal Oct. 11 affirmed the Department of Revenue's sales and use tax assessments. Taxpayer claimed that Alabama law exempted from tax the gross proceeds of sales of products of the farm, grove, or garden when such sales are made by the producer. The main issue was whether Taxpayer operated as a merchant of the pine straw, or as a farmer or producer. The tribunal found Taxpayer: 1) acquired access to land owned by others, where the pine trees were already growing, for the sole purpose of obtaining pine straw to sell; 2) used measures to increase the amount of straw that the Taxpayer could gather and sell; 3) operated more as a merchant than as a farmer or producer; and 4) failed to prove the right to an exemption. Therefore, the tribunal affirmed the assessment. [Ala. Tax Trib., Admin. Law Judge Ruling Docket No. S. 17-1074-JP, 10/11/19]

Arkansas Appeals Office Finds Finance Department Correctly Assessed Sales Tax on Vehicle Purchased by Taxpayer (Decision 1 of 3)

 

The Arkansas Office of Hearings and Appeals (OHA) Oct. 14 found that Taxpayer was obligated to pay sales and use tax on a purchased motor vehicle and affirmed an assessment issued by the Department of Finance and Administration (DFA). The DFA determined that Taxpayer didn't register the vehicle and didn't pay the tax, so it mailed her a billing statement. Taxpayer argued that the vehicle was returned to the seller. Upon review, the OHA found that: 1) Taxpayer didn't establish that a rescinded sale occurred; 2) the DFA properly assessed the late payment penalty; 3) the DFA met the burden of showing that a sale of tangible personal property occurred; and 4) Taxpayer failed to demonstrate a defense to the enforcement of the tax law. Accordingly, the OHA sustained the tax assessment, penalty, and interest. [Ark. Dep't of Fin. & Admin., Docket No. 20-152, 10/14/19]

Arkansas Appeals Office Finds Finance Department Correctly Assessed Sales Tax on Vehicle Purchased by Taxpayer (Decision 2 of 3)

 

The Arkansas Office of Hearing and Appeals (OHA) Oct. 14 sustained the Department of Finance and Administration's (DFA) motor vehicle sales and use tax assessment. The DFA issued an assessment, which Taxpayers protested. Taxpayers claimed a trade-in deduction but the DFA was unable to allow it without the associated Vehicle Identification Number (VIN). Taxpayers contended that all relevant information was provided within the protest. The OHA found that: 1) Taxpayers failed to provide the VIN; 2) the DFA's assertion that the number was necessary to claim the deduction was persuasive; 3) Taxpayers didn't prove entitlement to the deduction by a preponderance of the evidence; 4) Taxpayers failed to demonstrate a defense to the tax law enforcement; and 5) the penalty and interest after adjustment required under the state law were properly assessed. Accordingly, the OHA sustained the DFA's assessment. [Ark. Dep't of Fin. & Admin., Docket No. 20-157, 10/14/19]

Arkansas Appeals Office Finds Taxpayers Not Entitled to Vehicle Trade-In Credit, Sustains Sales Tax Assessment

 

The Arkansas Office of Hearings and Appeals (OHA) Oct. 15 found that Taxpayers weren't entitled to the trade-in credit and sustained the Department of Finance and Administration's (DFA) sales and use tax assessment. Taxpayers purchased a vehicle, registered it online, and claimed a trade-in credit for a vehicle sold to the dealer. The DFA conducted a review and issued a gross receipts tax assessment as the vehicle invoice didn't reflect a dealer trade-in. Taxpayers protested the assessment. The OHA found that Taxpayers: 1) entered the VIN number of the vehicle sold as the VIN number of the vehicle purchased during the online registration; and 2) didn't present any evidence to prove that they were entitled to a tax credit on their purchase of the vehicle. Therefore, the DFA correctly assessed the gross receipts tax. Accordingly, the OHA sustained the proposed assessment. [Ark. Dep't of Fin. & Admin., Docket No. 20-153, 10/15/19]

Arkansas Appeals Office Finds Finance Department Correctly Assessed Sales Tax on Vehicle Purchased by Taxpayer (Decision 3 of 3)

 

The Arkansas Office of Hearing and Appeals (OHA) Oct. 14 sustained the Department of Finance and Administration's (DFA) motor vehicle sales tax assessment. Taxpayer purchased a vehicle and a temporary tag was issued to her. The DFA found that Taxpayer didn't register or pay the tax, so it issued a notice of proposed assessment including late payment penalty and interest. Taxpayer protested the assessment contending that she returned the vehicle and didn't know that she had to pay the tax even after returning it. The OHA found that: 1) Taxpayer took ownership and possession of the vehicle; 2) the ownership and possession triggered the tax liability; 3) Taxpayer didn't establish that a rescinded sale occurred; 4) repossession of the vehicle, voluntary or involuntary, didn't extinguish tax liability; and 5) the penalty and interest were properly assessed. Accordingly, the OHA sustained the DFA's assessment. [Ark. Dep't of Fin. & Admin., Opinion No. 20-179, 10/14/19]

Arkansas Appeals Office Finds Finance Department Correctly Assessed Gross Receipts, Alcoholic Beverage Tax, Interest

 

The Arkansas Office of Hearings and Appeals (OHA) Oct. 14 sustained the Department of Finance and Administration's (DFA) gross receipts and alcoholic beverage tax assessments, for excise and sales and use tax purposes. Taxpayer owned and operated a retail liquor store that sold a variety of wine, liquor, and beer. The DFA conducted an audit and assessed taxes and interest. Taxpayer argued that the DFA used wrong percentage and didn't take inventory into consideration. Upon review, the OHA found that: 1) Taxpayer failed to establish the accuracy of its tax returns; 2) Taxpayer failed to maintain sufficient specified documentation to refute the assessments; 3) the DFA made the assessments based upon the best information and documentation available; and 4) the DFA correctly applied the tax law while making the assessments. Accordingly, the OHA sustained the DFA's tax assessments. [Ark. Dep't of Fin. & Admin., Docket Nos. 19-505, 19-506, 10/14/19]

Tax Notes

Pennsylvania Court Denies Bank Refund for Computer Purchases

 

A bank was properly denied a refund of sales taxes it paid on purchases of computer software and related services, a Pennsylvania appellate court has held.

Pennsylvania Bills Would Legalize, Tax Recreational Pot

 

Two Pennsylvania senators have introduced legislation sanctioning adult-use marijuana that is projected to bring in around $500 million in revenue during the first year.

California Governor Takes Final Action on 2019 Tax Bills

 

California Gov. Gavin Newsom (D) took final action on several 2019 tax bills, including approving a deduction for marijuana businesses and new rules for local tax incentive deals and vetoing a cut to the state's minimum franchise tax.

Florida Senate Committee Advances Remote Seller Bill

 

Florida legislation to establish economic nexus standards for remote sellers and marketplace providers has cleared the first of its three Senate committee hurdles.

Amazon Appealing South Carolina Marketplace Decision

 

Amazon Services LLC — the entity that operates Amazon.com’s online marketplace — is appealing the South Carolina Administrative Law Court’s ruling that it is the retailer liable for collecting sales and use tax on third-party sales.

California Extends Green Tech Tax Break

 

California Gov. Gavin Newsom (D) has approved legislation extending a sales tax break for green tech manufacturers, expanding an effort to combat the underground economy, denying tax breaks to college-admission cheats, and asking voters to approve a major bond measure.

Ohio House Votes to Reinstate Tax Deduction for Lawyers, Lobbyists

 

Ohio legislation to reinstate the business income deduction for lawyers and lobbyists is one step closer to passage.

Nebraska Rare-Metal Mining Project Gets Millions in Tax Incentives

 

Nebraska has awarded $200 million in tax incentives to a rare-metal mining project in the southeast part of the state.

Reality Television Stars Settle Georgia Tax Evasion Claims

 

A reality television couple has settled allegations that they failed to pay approximately $2.1 million in Georgia state taxes.

Featured Resources

COST - Council on State Taxation

Amicus Briefs

Express Scripts Inc., v. State of Washington, Dep’t of Rev.

COST on July 22 filed an amicus curiae brief with the Washington Supreme Court urging the Court to review a case, Express Scripts Inc., v. State of Washington, Dep’t of Rev., addressing whether “pass-through” funds should be included in the B&O tax base and whether taxpayers are entitled to retroactive relief when relying on written DOR advice under the State's Taxpayer Bill of Rights.

COST - Council on State Taxation

COST Studies, Articles & Reports

2019 State and Local Amnesty Programs

This report tracks state and local tax amnesty programs by state for 2019.

COST - Council on State Taxation

COST Comments & Testimony

Comments re Proposed Amendments to Miss. Admin. Code Title 35.III.2.06

COST on September 20 filed comments with the Mississippi Department of Revenue urging it to amend or withdraw proposed changes to its regulations addressing the State’s treatment of dividends. COST urged the Department to avoid effectuating a Mississippi tax policy change in response to the Mississippi Supreme Court’s 2016 holding in Mississippi Department of Revenue v. AT&T Corp. through regulati