Upcoming National Meeting

2019 Canadian Tax Workshop For U.S. Companies

2 ½ day workshop covering the key tax issues that U.S. companies outside of Canada who are doing business with Canadians or in Canada need to know. The primary focus of the workshop will be on GST, HST and Income Tax. It will also cover QST, Payroll and Property Taxes. An interactive audit session covering Canadian taxes is also planned.

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Newsletters & Media

Cost Conscious

ISSUE 19-18; September 6, 2019

Transfer Pricing Audit Activity – Several COST members have reported increased transfer pricing audit activity by states that have engaged RoyaltyStat or other third-party consultants. Concern continues to grow about the tactics used during such audits, such as aggressive use of novel transfer pricing theories and excessive IDRs that appear to be designed to force settlements. Which of the followi

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Bloomberg TAX

Users of Streaming Services Seek to Scrap Chicago's Netflix Tax

 

Chicago’s “Netflix tax” operates as an extraterritorial tax that must be found unconstitutional because it treats taxpayers inconsistently, an attorney representing consumers of streaming entertainment services told an Illinois appeals court Sept. 19.

Alabama DOR Announces Hosting of Local Government Outreach Meetings in October

 

The Alabama Department of Revenue (DOR) Sept. 18 announced that it will host a series of outreach meetings with local government officials for individual income, corporate income, sales and use, property, excise, and trust income tax purposes. The DOR will provide updates on the implementation of legislative initiatives that affect all local taxing authorities. The meetings will be held in October in Huntsville, Birmingham, Montgomery, Dothan, and Mobile on the date and time mentioned in the announcement. Officials and revenue employees from all counties and municipalities are invited to attend and will benefit from the information presented on a range of topics, including the roll-out of the Single Point Filing and Payment System for local motor fuel tax, the Wholesale to Retail Accountability Program, and the simplified sellers use tax. [Ala. Dep't of Revenue, ADOR to Host Local Government Outreach Meetings in October, 09/18/19]

California BOE Issues Letter To County Assessors Regarding Marin County Assessment Sampling Survey

 

The California Board of Equalization (SBOE) Sept. 18 issued a letter to county assessors containing a copy of the Marin County Assessment Sampling Survey for property tax purposes. The SBOE completed the survey for purposes of certifying the eligibility of the county to continue to recover the cost associated with administering supplemental assessments. The sampling indicates Marin County's 2016-17 assessment roll meets the requirements for assessment quality established by Cal. Rev. & Tax Code Section 75.60 [Cal. State Bd. of Equalization, SBOE Letter to Assessor 2019/032, 09/18/19]

California CDTFA Publishes Information on Sales and Use Tax Seller's Permit

 

The California Department of Tax and Fee Administration (CDTFA) Sept. 1 published information on seller's permits for sales and use taxes, that also impact individual income and corporate income tax filings. The publication includes information on: 1) acquisition of seller's permit, including for out-of-state sellers; 2) reporting the applicable taxes; 3) usage of a resale certificate; 4) record keeping; and 5) online services. The CDTFA also provided a sample of the state's resale certificate Form CDTFA-230. [Cal. Dep't of Tax & Fee Admin., Your California Seller's Permit, 09/01/19]

California CDTFA Publishes Information on Sales and Use Taxability of Sales to U.S. Government

 

The California Department of Tax and Fee Administration Sept. 1 published information on the sales and use taxability of sales to the U.S. government. The publication includes information on: 1) exempt sales and leases to the U.S. government and exempt purchases using U.S. government bankcards; 2) sales to individuals insured under the Medicare program; 3) the state's special excise taxes and fees; 4) sales to federal contractors; and 5) documentation required for sales to the U.S. government. [Cal. Dep't of Tax & Fee Admin., Publ'n 102, 09/01/19]

California Court of Appeal Denies Taxpayer's Rehearing Petition in Suit Against Costco for Sales Tax Refund

 

The California Court of Appeal Sept. 17 denied Taxpayer's rehearing petition against the trial court's order sustaining the demurrer to Taxpayer's sales and use tax refund complaint. The lawsuit involved Taxpayer seeking to recover amounts paid in the tax reimbursement to Costco Wholesale Membership, Inc. on purchases of dietary supplements. The appeals court concluded none of the documents that Taxpayer relied upon were issued in response to an inquiry about refunds or addressed the refund of the taxes paid by retailers on sales of the products. Therefore, the appeals court denied the rehearing petition, and made two grammatical changes to the original decision of Aug. 22. [Littlejohn v. Costco Wholesale Corp., Cal. Ct. App., No. A144440, 09/17/19]

Colorado DOR Posts Information on 2018 TurboTax Form 104 Submission Error

 

The Colorado Department of Revenue (DOR) Sept. 1 posted information regarding a TurboTax error by providing a link to a TurboTax webpage. The webpage provides that due to a programming issue in the 2018 TurboTax Colorado state electronic file submission, the e-file submission of Colorado Form 104 to the DOR incorrectly transmitted the amount reported for taxpayers' federal taxable income. This didn't affect the calculation of a taxpayer's return or change the amount of any individual income tax refund or taxes owed. Taxpayers are required to amend their returns to report the correct amount of their federal taxable income reported to Colorado. The amended return won't change a taxpayer's refund or create additional tax due. The paper version of the Colorado Form 104 is correct and reflects the correct taxable income. [Colo. Dep't of Revenue, TurboTax Error Information, 09/01/19]

Delaware Governor Announces Launch of New Documentation, Reporting Tool, One Stop

 

The Delaware Governor Sept. 18 announced the launch of a new online tool to help streamline documentation and reporting requirements for new businesses. The new Delaware One Stop, available at onestop.delaware.gov, will allow businesses to interact with core state agencies whether they are starting or ready to grow. The new site is the product of a collaborative effort among multiple state agencies and real-world entrepreneurs that allows users to access many services via a single login. The core functions of the site include business license registration via the Division of Revenue, hiring reporting through the Division of Unemployment Insurance, and coverage verification with the Office of Workers' Compensation. [Del. Governor's Office, News Release, 09/18/19]

Hawaii DOT Announces Mandatory Electronic Filing of Returns for Rental Motor Vehicle, Tour Vehicle

 

The Hawaii Department of Taxation (DOT) Sept. 17 announced the mandatory electronic filing of returns for the rental motor vehicle, tour vehicle, and car-sharing vehicle surcharge tax, effective Oct. 1. The announcement amends the excise tax announcement 2019-06 that was originally issued on June 17. The announcement required taxpayers to file the tax returns electronically for taxable years beginning on or after Oct. 1 and annual returns for taxable years beginning on or after Jan. 1. Form RV-2 and Form RV-3 are available online for electronic filing. The DOT will impose a two-percent penalty if the return isn't filed electronically unless the failure is due to reasonable cause and not due to neglect. [Haw. Dep't of Tax'n, Announcement No. 2019-06, 09/17/19]

Hawaii DOT Releases Tax Clearance Application Form

 

The Hawaii Department of Taxation (DOT) Sept. 1 released a revised Form A-6, Tax Clearance Application, to obtain a state tax clearance for individual income, corporate income, trust income, sales and use, excise, estate, and property tax purposes. The form can be filed electronically, or for all state, city, or county government contracts, may be obtained through the Hawaii Compliance Express. If a tax clearance is required from the Internal Revenue Service (IRS), IRS Form 8821 or IRS Form 2848 is also required. The DOT also issued the instructions for filling the form. [Haw. Dep't of Tax'n, Form A-6, 09/01/19]

Tax Notes

Judge Dismisses Chicago TIF Suit for Lack of Standing

 

A Cook County judge dismissed a challenge to Chicago’s $1.3 billion Lincoln Yards tax increment financing district for lack of standing.

Florida Would Adopt Wayfair Thresholds Under Prefiled Bills

 

Prefiled bills in Florida, the last large state that relies heavily on sales taxes but has not enacted economic nexus standards, would adopt Wayfair-type thresholds for remote sellers and marketplace facilitators.

California Governor Signs Employment Reclassification Law

 

California Gov. Gavin Newsom (D) has approved a bill that will effectively reclassify many workers as employees rather than independent contractors, increasing employment tax obligations for numerous businesses.

Oregon DOR Seeks Input on Gross Receipts Tax Rules

 

The Oregon Department of Revenue is looking for feedback from the business community regarding upcoming rules for the state's new gross receipts tax.

Alabama’s Joe Garrett Jr. Headed to Private Sector

 

Alabama Deputy Revenue Commissioner Joe Garrett Jr. will leave state government at the end of September to join Deloitte.

Nebraska Won't Treat Repatriated Income as Dividend

 

Nebraska's new guidance on the taxation of repatriation income will peg the state as a “significant outlier” vulnerable to litigation, experts say.

Kentucky Gubernatorial Candidate Commits to Gaming Expansion

 

Kentucky Attorney General and gubernatorial candidate Andy Beshear (D) said he is committed to expanding gaming in the state and using the tax revenues to fund Kentucky’s pension system.

Michigan Sports Betting Bill Mirrors Stalled Internet Gaming Bill

 

A Michigan lawmaker has introduced a bill that would legalize and tax sports gambling at 8 percent, the same tax rate proposed in the recent internet gaming bills opposed by the governor and the state budget office.

D.C. Report Examines Worker Misclassification in Construction Industry

 

District of Columbia construction companies that misclassify workers as independent contractors have lower operating costs than companies that properly classify workers, according to a recent report on payroll fraud and tax evasion in the industry.

Wisconsin Bill Would Double Opportunity Zone Tax Incentive

 

A Wisconsin bill would double the state's Opportunity Zone tax incentive, which lawmakers and economic developers hope will give it an advantage over other states.

Featured Resources

COST - Council on State Taxation

Amicus Briefs

Jefferson Parish v. Walmart.com

COST filed an amicus brief on the merits on June 20, 2019 stressing to the Louisiana Supreme Court that a marketplace facilitator does not meet the definition of a “dealer” under the State’s law, violates due process because adequate notice was not provided, and the Parish of Jefferson’s interpretation could result in retroactive imposition of a tax from the Louisiana Dep’t of Revenue and 62 other

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 TB-92, Sourcing of GILTI and FDII

COST comments to the New Jersey Division of Taxation on TB-92, issued August 22, 2019, concerning the sourcing of global intangible low-taxed income (GILTI) under IRC Sec. 951A and foreign derived intangible income (FDII) under IRC Sec. 250.