Weekly SALT News Update

 

 By Paul Masters

State DOR Letters and Policy Rulings

Illinois Department of Revenue has issued several rulings, including:

* explains how prescription drugs are taxed, and the Service Occupation Use Tax on tangible personal property transferred incident to sales of service;

* explains taxation of software maintenance agreements and the Service Occupation Tax;

* rules that a chemical manufacturer’s containers used to ship fluid products to customers are not subject to sales or use tax because (i) the customers sell the products in the containers and provide the manufacturer with a resale certificate at the time of purchase, and (ii) title to the containers is transferred to the customers;

* when a construction contractor permanently affixes tangible personal property to real property, the contractor is deemed the end user of that tangible personal property. As the end user, the contractor incurs Use Tax on the cost price of that tangible personal property. See 86 Ill. Adm. Code 130.1940 and 86 Ill. Adm. Code 130.2075.;

* the “gross receipts” portion of the Retailers’ Occupation Tax is explained;

* information or data that is electronically transferred is not considered tangible personal property;

issues a detailed (and excellent) ruling on the application of the Service Occupation and Use taxes in connection with engineering services provided along with the sale of custom bridges;

* rules that integrally connected equipment to agricultural equipment (exempt) may also be exempt;

* a ruling regarding the new exemption for property used to repair aircraft; and

* in a significant ruling on Medicare, the DOR rules that in order for a Medicare payment to be exempt from sales tax, the payment must be made directly to the government. Any payments made to a patient or insurance company that would later be reimbursed by the government are subject to tax. It is all in the planning.

 

State Regulations and Public Notices

Ohio releases updated taxability matrix for Streamlined Sales and Use Tax Agreement.

 

State Legislative Affairs

Ted Poe is a conservative representative from Texas. Jackie Speier is a liberal representative from California. And they agree on one thing: states should be able to require Internet retailers to collect sales and use tax absent traditional nexus. H.R. 3179 has been introduced, and it has the support of representatives from both parties in several states, including Arkansas, California, Florida, New York, Tennessee, and Texas. It is known as the Marketplace Equity Act of 2011, and is the first bill that has a real chance of passage.


Judicial and Administrative Decisions

Michigan Tax Tribunal details factors to rely on in determining the proper valuation of commercial property. The case included a traditional battle of the experts (three against one), with the one prevailing because of a more careful study, ample explanation as to the reasoning employed, and better comparables.

 

Other Documents

None noted.

Explore posts in the same categories: Franchise Tax, Income Tax, Property Tax, Sales and Use Tax

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