Weekly SALT Update Nov. 7, 2011

 By Paul Masters with contributions by Jennifer Weidler in Chamberlain’s Philadelphia office.

State Regulations and Public Notices

California Board of Equalization issues a proposal to amend the definition of “retailers engaged in business in this state,” in conformance with AB 155. It will take effect either September 15, 2012 or January 2013. The effect of this change would be to expand the requirement for retailers to register with the Board and remit California use taxes, or to be subject to payment of these use taxes on such failure to remit.

Utah State Tax Commission notifies public of proposed rule change implementing three-factor formula for apportionment It also requires services to be “inUtah” if the benefit inUtah exceeds that received in any other state, and sets forth rules for the apportionment of income from intangible property.

Indiana Department of Revenue issues information bulletin on application of sales tax to restaurants, and a dealer must pay sales tax on the value of cars not used by sales staff, services to setup rented property are included as taxable as part of the rental receipts, cleaning agents do not qualify for manufacturing exemption, and no public transportation exemption for company that did not document sale of trucking services for hire – listed wrong on invoice. And in an expanded discussion, the DOR rules a manufacturer must pay use tax on HVAC equipment essential for manufacturing operations.

And then there were seven: Ohio revises its requirement for Ohio car dealers to collect Ohio sales tax on non-resident purchases of cars to be taken out of state, with collection required for seven states.

Colorado DOR revises FYI detailing responsibility of taxpayer to pay sales tax on vending machine receipts. Colorado DOR revises FYI 62 regarding rules on collecting local sales tax to be remitted to the state.

State Legislative Affairs

An about face on the Amazon law in Illinois, as Rep. Winters introduces HB 3869 to repeal the affiliate provision of the law that allows Illinois to require Amazon-type entities to collect Illinois use tax. It is currently in the Rules Committee.

The U.S. House of Representatives passes a bipartisan bill to impose a moratorium on any state taxes of mobile phone services via HR 1002.


Judicial and Administrative Decisions

Delaware bankruptcy court rules that a race track operator need not include money in trust fund in calculating Indiana tax as the money in the trust fund is not its income. This has application in reducing the tax base for Texas franchise tax.

Of course it had nexus: Arizona DOR rules that corporation has substantial nexus due to presence of sales representatives who provide customer support and training.

Buckeyes lose another one: The Ohio Supreme Court reverses a decision, and ruled that OSU cannot receive a property exemption for dorms used to house veterinary medicine students. It also leased out space to a McDonald’s and later a credit union. The Court ruled that this income did support the university purpose, as there was no operational relationship of the income to OSU.

Other Documents

General Motors Files Petition for Writ of Certiorari Over Retroactivity Issue

Recently, General Motors Co. filed a petition for writ of certiorari with the United States Supreme Court to address the issue of whether Michigan’s attempt to retroactively deny the taxpayer’s refund claim through the application of an eleven (11) year retroactive use tax amendment was unconstitutional.  We have addressed this issue in a previous blog post, touching on other cases in which taxpayers have attempted to challenge a state’s attempt to enact legislation to retroactively deny refund claims.  The state’s reply in General Motors is due by November 28th.

Indiana Retailer Sues State to Require Amazon to Collect Taxes

On November 3rd, Simon Property Group, a retail real estate management company, filed suit against the state of Indiana in an attempt to force it to require Amazon.com to collect sales tax.  The suit is an attempt to address an issue that brick-and-mortar stores continue to raise in the context of the Amazon debate: that remote retailers have an unfair advantage in that they sell products into Indiana, but do not charge sales tax.  Meanwhile, brick-and-mortar stores must collect taxes on in-state purchases.  The suit is an attempt by the retailer to, in its view, level the playing field.

Explore posts in the same categories: California, Delaware, Franchise Tax, Illinois, Income Tax, Indiana, Michigan, Property Tax, Sales and Use Tax, Utah

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