Upcoming National Meeting

2020 SALT Basics School

The COST SALT Basics School includes 3 separate tracks – Sales Tax, Income Tax and SALT (an overview of all state taxes) taught by leading authorities in the SALT community and is a great educational opportunity for tax professionals with 0 – 3 years of experience; tax professionals transitioning between transactional and income taxes and vice versa.

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Newsletters & Media

Cost Conscious

ISSUE 19-22; November 1, 2019

TODAY’S TOPIC: Company Travel Budgets – We periodically ask our member companies about their travel policies for conferences, continuing education, and other meetings. We would like to compare the current policies of member companies on this issue with the previous responses. Which of the following statements best describes your company’s current approach to employee travel?

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Bloomberg TAX

Recruiting Top Legal Talent: It May Not Really Be All About Pay

 

Partners move between firms for money. But at least one firm says they can be lured by something simpler: good business practices.

States Ditching Opioid Taxes in Pursuit of One-Time Payouts

 

Taxing opioids once looked like the next big revenue opportunity for states. But while taxes on sports betting, marijuana, and vaping products have become common, only New York has followed through with an opioid tax, which partially backfired.

Will A Careless E-File Mistake Invalidate A Tax Return?

 

Technology has changed the way we file taxes. With the click of a button or the touch of your finger on a screen, you can submit your tax returns—and taxpayers are more than willing to hit enter.

Chicago Faces Looming Deadline to Secure State Help for Budget

 

With less than two days to go in Illinois’s legislative veto session, Chicago Mayor Lori Lightfoot is running out of time to secure state help this year in closing the city’s biggest budget deficit in recent history.

Alabama DOR Publishes Memorandum on Legislative Changes for Motor Vehicle Registration Records

 

The Alabama Department of Revenue Nov. 12 published a memorandum on legislative changes affecting motor vehicle registration records, for excise tax purposes. As a follow-up to the Rebuild Alabama Act Memo, the memorandum lists fuel types that must be included in the motor vehicle registration record, except for trailers, and provides a link to the updated registration record format. Several other changes are made to registration validation edits to resolve issues reflected in the registration error report. [Ala. Dep't of Revenue, Memorandum 2019-006, 11/12/19]

Arizona DOR Announces Unclaimed Property Program Seeking Asset Owners From U.S. Military

 

The Arizona Department of Revenue (DOR) Nov. 12 announced that its Unclaimed Property program is seeking members of the U.S. military who have unclaimed funds with the state for individual income tax purposes. The DOR identified more than 8,800 military personnel with last known Arizona addresses from Luke Air Force Base, Tucson's Davis-Monthan Air Force Base, Fort Huachuca Army Base, Yuma Proving Ground Army Base, Camp Navajo Army Base, and Marine Corps Air Station Yuma. The properties, some dating back 30 years, total $2.3 million, with the largest property due to a single owner at $86,034. The DOR is sending notices to the military members' last known Arizona base or most current address with the hope that the property owner or a family member will contact the DOR. The DOR returns property to owners who provide documentation showing their right to claim assets. [Ariz. Dep't of Revenue, News Release, 11/12/19]

Arkansas Finance Department Determines Taxpayer's Microbiocide Spray, Dip Purchase for Poultry Production Were Sales Tax-Exempt

 

The Arkansas Department of Finance and Administration (DFA) Nov. 4 determined in a letter ruling that Taxpayer's purchase of a microbiocide spray and dip for poultry production line was exempt from a sales and use tax. Taxpayer, a poultry processor, inquired about the taxability of its poultry products. The DFA found that: 1) Taxpayer's purchase of the spray and dip was used directly in the manufacturing or processing of the products; 2) the products' samples provided to customers were a taxable withdrawal of manufactured or processed goods; and 3) Taxpayer's use of a film didn't qualify for a manufacturing exemption because the film wasn't machinery or equipment purchased to create a manufacturing plant or facility. Therefore, the DFA determined that Taxpayer's spray and dip purchase was tax-exempt, Taxpayer must remit the tax on the sales price of the processed poultry sample, and Taxpayer's film purchase was subject to the tax. [Ark. Dep't of Fin. & Admin., Opinion No. 20190718, 11/04/19]

Arkansas Finance Department Determines Allowable Depreciation Schedule for Solar Equipment Installed on Taxpayer's Facility

 

The Arkansas Department of Finance and Administration (DFA) Oct. 30 determined in a letter ruling the allowable depreciation schedule for solar equipment installed on Taxpayer's facility for individual income and corporate income tax purposes. Taxpayer inquired about the classification of a solar facility for tax purposes and the allowable depreciation schedule for the equipment installed on the property. The DFA found that: 1) property taxes in Arkansas were levied at the county level and it wasn't charged with the administration or collection of the property tax; 2) the allowable depreciation schedule for equipment placed into service would be the same as allowed for the specific type of equipment under the applicable federal law; 3) Arkansas didn't have bonus depreciation and the deduction for qualifying property was limited; and 4) Arkansas allowed the property to be depreciated in the first year based on when the property was placed into service. [Ark. Dep't of Fin. & Admin., Opinion No. 20190912, 10/30/19]

Arkansas Finance Department Issues Legal Opinion on Sales Taxability of Items Used for Farm Irrigation

 

The Arkansas Department of Finance and Administration (DFA) Oct. 30 issued a legal opinion regarding the sales and use taxability of various items sold for farm irrigation. Taxpayer, a contractor, inquired about the taxability of casing, screen, cap, and gravel that is installed permanently into real estate, since wells were exempt. The DFA explained that: 1) contractors constructing and installing an irrigation well should pay sales and use tax on any materials and taxable services they purchase and consume in constructing an irrigation well; 2) no sales tax should be charged to the customer on the amount billed for the completed irrigation well; 3) repair parts and labor are subject to sales tax; and 4) a hole-punch was a hand tool that didn't qualify for the farm equipment and machinery exemption. The opinion is binding on the DFA for three years from the date of issuance. [Ark. Dep't of Fin. & Admin., Opinion No. 20190305, 10/30/19]

Arkansas Finance Department Determines Volunteer Fire Department's Haunted House Fundraiser Exempt From Sales Tax

 

The Arkansas Department of Finance and Administration (DFA) Oct. 30 determined in a letter ruling that a volunteer fire department's haunted house fundraiser is exempt from sales tax on ticket sales and concessions. The fire department runs an annual fundraiser at which it sells tickets to a haunted house and haunted hayride, as well as refreshments at a concession stand. The DFA clarified that: 1) ticket sales to a place of amusement or entertainment are exempt from sales tax if the seller is a charitable organization; 2) a volunteer fire department is a charitable organization if it isn't engaged in business for profit; and 3) concession stand sales are exempt from sales tax when the stand is operated by a charitable organization and sales don't compete with sales by for-profit businesses. [Ark. Dep't of Fin. & Admin., Opinion No. 20191019, 10/30/19]

Tax Notes

Athletes, Leagues Challenge Pittsburgh's 'Jock Tax'

 

Pittsburgh is the latest locality to be sued over its so-called jock tax on nonresident athletes.

Pennsylvania Car-Sharing Bill Is About Fairness, Enterprise Says

 

A Pennsylvania bill to regulate and tax peer-to-peer car sharing has received the stamp of approval from car rental companies.

Massachusetts House to Vote on Vaping Tax, Flavored Tobacco Ban

 

Massachusetts legislators will vote November 13 on a bill taxing e-cigarettes and banning flavored tobacco.

Connecticut Municipalities Looking to Tackle Property Tax Relief

 

The Connecticut Conference of Municipalities is working to develop a comprehensive property tax relief initiative meant for the 2020 ballot.

Boston Coalition Proposes Statewide Gas Tax Increase

 

A coalition of Boston business leaders has called for Massachusetts to increase its gas tax to help fund transportation expenses.

Pennsylvania Enacts Uniform Definition of Blight

 

Pennsylvania’s statutes will now rely on a uniform definition of blighted property, paving an easier path forward for redevelopment tax credits.

Pennsylvania Governor Approves Repeal of Expired Property Tax

 

Pennsylvania Gov. Tom Wolf (D) has approved legislation repealing an expired property tax, eliminating fears that the law could be used to implement a wealth tax in the state.

Massachusetts Mulls Proposed Changes to NOL Regulation

 

The Massachusetts Department of Revenue will hold a December hearing on updating its net operating loss deduction and carryforward regulation.

Circuit Court Upholds Millions in Cigarette Tax Penalties Against UPS

 

The Second Circuit reduced a penalty against UPS for knowingly shipping untaxed cigarettes from Native American reservations throughout New York state and New York City, but still upheld nearly $100 million in penalties and taxes.

New Jersey Proposed Rules on Market-Based Sourcing Imminent

 

The New Jersey Division of Taxation’s proposed market-based sourcing regulations will likely be published the week of November 11 for formal comment, according to division Director John Ficara.

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 on Massachusetts Decoupling from IRC § 163(j) in the FY2019 Deficiency Budget

Letter to Massachusetts Senate and House leadership to encourage their support on the inclusion of language decoupling Massachusetts from the federal interest expense limitations under IRC § 163(j) in the 2019 supplemental deficiency budget.