Archive for the ‘Sales and Use Tax’ category

Oral Arguments Heard in South Dakota’s Challenge to Quill

August 31, 2017

By: Jennifer Weidler Karpchuk

On August 29, oral arguments were held in South Dakota v. Wayfair, Inc. S.D., No. 28160, which challenges the state’s remote sales tax legislation, S.B. 106. 

Enacted during March 2016, S.B. 106 requires remote sellers to collect and remit tax to the state – even if they have no physical presence in the state – if they have more than $100,000 in sales or make more than 200 separate sales into South Dakota annually. The Bill was specifically crafted as a vehicle to undo the U.S. Supreme Court’s ruling in Quill Corp. v. North Dakota, 504 U.S. 298 (1992), which prohibits states from imposing sales and use tax collection obligations on sellers who do not have a physical presence in the state. The lower court found in favor of the taxpayers, holding that the law was unconstitutional pursuant to Quill, and the State quickly appealed to the South Dakota Supreme Court.

During oral arguments at the South Dakota Supreme Court, the State asked the court for an expeditious denial of its appeal so that it can file a writ of certiorari with the U.S. Supreme Court.  Additionally, the State requested that the court provide “a critical and important voice” urging the U.S. Supreme Court to grant cert.

Counsel for the taxpayers explained that the purposeful drafting of an unconstitutional bill in order to challenge a long-standing U.S. Supreme Court decision was unconventional and controversial. Counsel questioned whether purposefully enacting unconstitutional legislation creates bad precedent/practice.

Further, counsel for the taxpayers argued that Congress has the power to regulate interstate commerce and that Congress should decide the fate of state sales tax collection. Currently, there are four different bills pending before Congress seeking to deal with this issue, one of which we previously discussed here.

Counsel for the taxpayers also claimed that important facts were not developed and included in the record at the lower court – such as, what the projected lost revenue is to the State. Counsel for the taxpayers concluded by asking that the decision be affirmed as unconstitutional, without the court weighing in on complex policy issues.

Once the South Dakota Supreme Court issues its opinion, the parties will have 90 day to petition the U.S. Supreme Court for cert.

Don’t Delay – Pennsylvania’s 2017 Tax Amnesty Program Starts Today

April 21, 2017

By Jennifer Weidler Karpchuk

As of today, April 21, 2017, Pennsylvania’s 2017 Tax Amnesty Program has officially commenced.  Those individuals with potential Pennsylvania tax liabilities should consider taking advantage of the program, which is slated to run through June 19, 2017.  During those sixty (60) days, the Pennsylvania Department of Revenue will waive all penalties and half of the interest for anyone who participates.  For more information, see our previous blog post hereContact us to find out if amnesty is the right choice for you.

Proposed Remote Seller Notice and Reporting Requirements in Pennsylvania Post-DMA

March 8, 2017

By Adam Koelsch

Just a few months after the U.S. Supreme Court declined to review the decision of the Tenth Circuit in Direct Mktg. Ass’n v. Brohl — which upheld Colorado’s sales tax notice and reporting requirements for out-of-state retailers — a Pennsylvania lawmaker has reintroduced a bill requiring online retailers to notify Pennsylvania purchasers when sales and use tax is due on their purchases.

In 2010, the Colorado legislature enacted a statute which requires a remote retailer that sells products to Colorado customers, but does not collect Colorado sales tax, to notify those customers that sales or use tax is due on certain purchases made from the retailer and that Colorado requires those customers to file sales or use tax returns.  Colo. Rev. Stat. § 39-21-112 (3.5)(c)(I).  Failure to provide that notice subjects the retailer to a penalty of five dollars ($5.00) for each such failure, unless the retailer shows reasonable cause for such failure.  Colo. Rev. Stat. § 39-21-112 (3.5)(c)(II).

In addition, the statute requires that such retailers must send a notification to each Colorado customer by January 31 of each year showing, among other information, the total amount paid by the customer for Colorado purchases made from the retailer in the previous calendar year.  Colo. Rev. Stat. § 39-21-112 (3.5)(d)(I)(A).  Failure to send that notification subjects the retailer to a penalty of ten dollars ($10.00) for each such failure, unless the retailer shows reasonable cause for such failure.  Colo. Rev. Stat. § 39-21-112 (3.5)(d)(III)(A).

The statute further requires that such retailers file an annual statement for each Colorado customer with the Department of Revenue showing the total amount paid for Colorado purchases by such customers during the preceding calendar year, to be filed on or before March 1 of each year.  Colo. Rev. Stat. § 39-21-112 (3.5)(d)(II)(A).  Failure to file that annual statement subjects the retailer to a penalty of ten dollars ($10.00) for each purchaser that should have been included in the statement, unless, again, the retailer shows reasonable cause for such failure.  Colo. Rev. Stat. § 39-21-112 (3.5)(d)(III)(B).

The Data & Marketing Association (“DMA,” formerly the Direct Marketing Association), challenged the above Colorado notice and reporting requirements in federal court, claiming that those requirements violated the Interstate Commerce Clause of the U.S. Constitution by imposing burdens on out-of-state retailers that were not imposed upon in-state retailers.  In 2011, a preliminary injunction was issued by the federal district court, which, in 2012, also concluded that the Colorado statute violated the Commerce Clause.  In 2013, the Tenth Circuit dissolved the injunction and reversed the decision of the district court — holding that the district court did not have jurisdiction pursuant to the Tax Injunction Act — only to, in turn, have its decision reversed by the U.S. Supreme Court on March 3, 2015, in Direct Mktg. Ass’n v. Brohl, 135 S. Ct. 1124 (2015).  On remand, the Tenth Circuit again reversed the district court, holding that the Colorado statute did not violate the Commerce Clause.  On December 12, 2016, the U.S. Supreme Court denied DMA’s petition for a writ of certiorari.

Meanwhile, after the Tenth Circuit had dissolved the preliminary injunction in 2013, DMA had filed for, and had obtained, another injunction in Colorado state court.

But, on February 23, 2017, DMA and the State of Colorado settled the case, thereby dissolving the state court injunction and finally ending the litigation.  As part of that settlement, the Department of Revenue agreed that the litigation involving DMA over the constitutionality of the statute had constituted reasonable cause for non-compliance with the statute, and that, therefore, the Department would not require compliance with the statute and its accompanying regulations before July 1, 2017, and that it would waive any penalties for failure to comply with the statute and the regulations before that date.

Subsequent to the U.S. Supreme Court’s refusal to review the Tenth Circuit’s decision, a number of states have introduced bills to create notice and reporting requirements similar to those of Colorado.  In particular, in Pennsylvania, on February 17, 2017, Rep. W. Curits Thomas introduced H.B. 542 — a bill substantially similar to the one which he had introduced in 2015, only to have it die in committee when the legislative session adjourned.

H.B. 542 imposes more modest requirements than the Colorado statute.  For instance, H.B. 542 does not require that annual notifications be sent to purchasers, or require that an annual statement be filed with the Pennsylvania Department of Revenue.  Instead, the proposed statute requires that a seller or a remote seller “conspicuously provide” to a Pennsylvania purchaser, on each separate sale of tangible personal property or taxable services via an Internet website operated by that seller or remote seller, the following notice:

Unless you paid Pennsylvania sales tax on this purchase, you may owe a Pennsylvania use tax on this purchase based on the total sales price of the purchase in accordance with the act of March 4, 1971 (P.L.6, No.2), known as the Tax Reform Code of 1971. Visit http://www.revenue.state.pa.us for more information.  If you owe a Pennsylvania use tax on this purchase, you must report and remit the tax on your Pennsylvania income tax form.

H.B. 542 § 279(a).  The proposed statute provides no guidance regarding what constitutes a sufficiently “conspicuous” notice.

A failure by the seller to provide such notice will subject the seller to a fine of “not less than” five dollars ($5.00) for each such failure.  H.B. 542 § 279(b).  The proposed statute would be applicable only to transactions occurring more than sixty (60) days after its enactment.

In light of this proposed statute, and those like it introduced in other states, remote sellers should be alert to any newly imposed notice and reporting requirements in each of the states in which they sell their products.

The text of H.B. 542 is available here.

Start of Pennsylvania 2017 Tax Amnesty Program Draws Near – Do You Qualify?

February 24, 2017

By Jennifer Weidler Karpchuk

In less than two (2) months, Pennsylvania’s 2017 Tax Amnesty Program will commence.  Those individuals with potential Pennsylvania tax liabilities should consider taking advantage of the program, which is slated to run from April 21, 2017 through June 19, 2017.  During those sixty (60) days, the Pennsylvania Department of Revenue (“Department”) will waive all penalties and half of the interest for anyone who participates.

The program applies to delinquencies existing as of December 31, 2015 – whether or not the delinquency is known to the Department.  The litany of taxes eligible for the program includes:

  • Agriculture Cooperative Tax;
  • Bank and Trust Company Shares Tax;
  • Capital Stock or Foreign Franchise Tax;
  • Cigarette Tax;
  • Corporate Loans Tax;
  • Electric Cooperative Tax;
  • Employer Withholding Tax;
  • Financial Institutions/Title Insurance Company Shares Tax;
  • Fuel Use Tax;
  • Gross Premiums Tax;
  • Gross Receipts Tax;
  • Hotel Occupancy Tax (including state administered 1% local Hotel Occupancy Tax for Philadelphia and Allegheny);
  • Inheritance and Estate Tax;
  • Liquid Fuels Tax;
  • Malt Beverage Tax;
  • Marine Underwriting Profits Tax;
  • Motor Carriers Road Tax, for IFTA vehicles, PA portion only;
  • Motor Vehicle Carriers Gross Receipts Tax;
  • Mutual Thrift Institutions Tax;
  • Oil Company Franchise Tax;
  • Parimutuel Wagering and Admissions Tax;
  • Personal Income Tax;
  • Public Transportation Assistance (“PTA”);
  • Public Utility Realty Tax;
  • Realty Transfer Tax, including Local Realty Transfer Tax;
  • Sales and Use Tax, including Local Sales and Use Tax for Philadelphia and Allegheny;
  • Surplus Lines Tax;
  • Unauthorized Insurance Tax; and
  • Vehicle Rental Tax.

Notably, the 2017 Tax Amnesty Program does not include Unemployment Compensation (which is administered by the Department of Labor and Industry), nor does it include any tax administered by another state, local government, or the Federal government.

Pursuant to the program, the taxpayer is responsible for paying the principal tax due, plus one-half interest.  The Department will, in turn, rescind any liens or other enforcement actions for that debt; waive all penalties associated with the debt; waive one-half interest; and waive any fees (ex. lien filing fees or collection agency fees).

Along with the payment for all taxes and one-half of the interest, all missing tax returns or reports must be filed no later than June 19, 2017.  However, a taxpayer with unknown liabilities reported and paid pursuant to the Tax Amnesty Program is eligible for a limited look-back period whereby the taxpayer will not be liable for any taxes of the same type due prior to January 1, 2011.

Those taxpayers who are eligible for the 2017 Tax Amnesty Program, but do not participate will be subject to a five-percent (5%) non-participation penalty.  Generally speaking, individuals, businesses and other entities with state tax delinquencies as of December 31, 2015 (whether known or unknown to the Department) are eligible to participate in the program.  However, any taxpayer who participated in the Department’s 2010 Tax Amnesty Program is ineligible to participate in the 2017 program.  Taxpayers who have entered into Voluntary Disclosure Agreements with the Department are likewise ineligible to participate.  Nevertheless, taxpayers who have entered into deferred payment agreements with the Department are eligible for the 2017 Tax Amnesty Program.  Notably, a taxpayer who applies for tax amnesty forfeits all future appeal rights for liabilities paid through the program.

Business taxpayers may request a statement of account that shows all liabilities by visiting e-TIDES at http://www.etides.state.pa.us.  Individual taxpayers may review account information, including all liabilities, by visiting the Personal Income Tax e-Services Center at http://www.doreservices.state.pa.us.  Please contact us if you need assistance in determining whether you qualify for the 2017 Tax Amnesty Program and whether participation in the program is the right choice for you.

U.S. Supreme Court Extends Time to File Petitions for Certiorari in Ohio Commercial Activity Tax Case

February 22, 2017

By Jennifer Weidler Karpchuk

By Order dated January 31, 2017, the United States Supreme Court granted Crutchfield Corporation (“Crutchfield”) an extension of time until April 16, 2017 to file a petition for certiorari for what could be a precedential decision if the Court decides to grant it. See Crutchfield Corp. v. Joseph W. Testa, Tax Commissioner of Ohio (U.S. Supreme Court Docket No. 16A774).  During November 2016, the Ohio Supreme Court ruled for the State, upholding its commercial activity tax (“CAT”). See Crutchfield Corp. v. Joseph W. Testa, Tax Commissioner of Ohio, 2016 WL 6775765 (2016). The CAT is a gross receipts tax that replaced Ohio’s corporate income tax. Pursuant to the CAT, a company with more than $500,000 of Ohio sales has nexus with the state such that it is subject to the tax.

Crutchfield appealed from imposition of the CAT upon revenue it earned from sales of electronic products within Ohio. Crutchfield is based outside of Ohio, maintains no employees in Ohio, and maintains no facilities in Ohio. The sole business that Crutchfield conducts in Ohio is via the shipment of goods from outside the state to consumers within the state using the United States Postal Service or common-carrier delivery services. Crutchfield contested the issuance of CAT assessments contending that substantial nexus within a state is a necessary prerequisite to imposing the tax pursuant to the United States Constitution’s dormant Commerce Clause and that Crutchfield lacked substantial nexus with Ohio since it did not maintain a “physical presence” within the state.

Responding, the State advanced two (2) arguments. First, it argued that the Commerce Clause does not impose a physical presence requirement and, thus, the $500,000 sales-receipts threshold set forth by the statute satisfies the Commerce Clause’s requirement of substantial nexus. Second, the State argued that assuming arguendo the Commerce Clause does impose a physical presence standard, Crutchfield’s computerized connections with Ohio consumers involves the presence of tangible personal property in Ohio and the presence of that property on computers located in the state constitutes physical presence. The Ohio Supreme Court found in favor of the State based upon its first argument and therefore it did not address the State’s secondary argument.

At first glance, the Ohio Supreme Court’s decision stands in stark contradiction to the United States Supreme Court’s decision in Quill v. North Dakota, 504 U.S. 298 (1992), which held that for a state to subject a company to a use tax collection obligation, it must have a physical presence in the taxing state. However, the Ohio Supreme Court distinguished Quill in a number of ways. Primarily, the tax at issue in Quill was a sales and use tax, whereas the tax at issue in Crutchfield was a business privilege tax. The Ohio Supreme Court found that Quill’s holding does not apply to business privilege taxes. This is not the first time a court has drawn such a distinction. See Couchot v. State Lottery Comm., 659 N.E.2d 1225 (Ohio 1996) (“There is no indication in Quill that the Supreme Court will extend the physical-presence requirement to cases involving taxation measured by income derived from the state”); Capital One Bank v. Commr. of Revenue, 899 N.E.2d 76 (Mass. 2009) (declining to “expand the [United States Supreme] Court’s reasoning [in Quill] beyond its articulated boundaries” and upholding imposition of tax on out-of-state banks in relation to in-state servicing of credit cards based on the volume of business conducted and profits realized); MBNA Am. Bank, N.A. v. Indiana Dept. of State Revenue, 895 N.E.2d 140 (Ind. Tax 2008) (“Based on [Quill] and a thorough review of relevant case law, this Court finds that the Supreme Court has not extended the physical presence requirement beyond the realm of sales and use taxes”); KFC Corp. v. Iowa Dept. of Revenue, 792 N.W.2d 308 (Iowa 2010) (“We * * * doubt that the United States Supreme Court would extend the ‘physical presence’ rule outside the sales and use context of Quill ”).

The United States Supreme Court has not addressed the physical presence nexus standard issue since its landmark decision in Quill twenty-five (25) years ago. Many argue that the Supreme Court in Quill could not and did not anticipate the internet boom and, with it, the vastly different way that business would be conducted. Since then, the Court has denied certiorari for every case since Quill where nexus was at issue, e.g., Tax Com’r of State v. MBNA America Bank, N.A. 640 S.E.2d 226 (W. Va. 2006), cert. denied, 551 U.S. 1141 (2007); Capital One Bank v. Commissioner of Revenue, 9 N.E.2d 76 (Mass. 2009), cert. denied, 557 U.S. 919 (2009); Geoffrey, Inc. v. South Carolina Tax Com’n, 37 S.E.2d 13 (S.C. 1993), cert. denied, 510 U.S. 992 (1993); Lanco, Inc. v. Director, Div. of Taxation, 908 A.2d 176  (2006), cert. denied, 551 U.S. 1131 (2007); see also, Direct Marketing Ass’n v. Brohl, 135 S.Ct. 1124, 1134-1135 (2015) (Kennedy, J., concurring) (“The Internet has caused far-reaching systemic and structural changes in the economy, and, indeed, in many other societal dimensions. Although online businesses may not have a physical presence in some States, the Web has, in many ways, brought the average American closer to most major retailers. A connection to a shopper’s favorite store is a click away—regardless of how close or far the nearest storefront…Today buyers have almost instant access to most retailers via cell phones, tablets, and laptops. As a result, a business may be present in a State in a meaningful way without that presence being physical in the traditional sense of the term. Given these changes in technology and consumer sophistication, it is unwise to delay any longer a reconsideration of the Court’s holding in Quill.”). If the United States Supreme Court grants Crutchfield’s petition for certiorari, we might finally receive an answer to Quill’s application in the age of the internet.

Weekly Update for 3/16

March 19, 2012

 by Jennifer Weidler

ARIZONA

Arizona Court Holds that Cooperative Direct Mail Advertising is Not Subject to Use Tax

The Arizona Appeals Court held that cooperative direct mail advertising was not subject to the state’s use tax, since the dominant purpose of the taxpayer’s business was to obtain nontaxable design, mailing and printing services, and not tangible personal property.

INDIANA

Indiana Legislature Passes Bill to Phase Out Inheritance Tax

The Indiana General Assembly has passed legislation, SB 293, which will phase out the state’s inheritance tax, gradually reducing the rate until it hits zero during 2022.   The phase out would be retroactive to January 1st.

KANSAS

Kansas House Approves Bill to Alter State Income Tax Structure

The Kansas House approved legislation, SB 177, which would make several modifications to the state’s income tax structure.  The legislation includes changes to the state’s sales tax exemption and business income exemption provisions, formulaic individual income tax rate reductions, Rural Opportunity Zone expansions, tax credits and more.

MARYLAND

Maryland Senate Approves “Amazon” Law

The Maryland Senate has approved legislation, SB 523, which includes an “Amazon” law and an income tax increase.  The bill would add three additional tax brackets and rates and would impose a flat tax on those filers making more than $500,000.  The bill also contains affiliate nexus/”Amazon” language.

MICHIGAN

Michigan Court of Appeals Finds Taxpayer Could Not Collaterally Attack Underlying Assessment

The Michigan Court of Appeals held that a taxpayer could not appeal a use tax assessment, as the sole shareholder and responsible corporate officer of a retailer, where the taxpayer’s appeal was untimely and where he was statutorily precluded from collaterally attacking the underlying assessment.

NEW JERSEY

New Jersey Legislature Passes “Amazon” Law

The New Jersey Assembly has passed legislation, A 2608, which would give Amazon.com a temporary sales tax collection exemption in exchange for job creation.  Pursuant to the bill, those retailers that make capital investments of at least $130 million and create at least 1,500 full-time jobs in the state would not have nexus until July 1, 2013.

New Jersey Legislature Passes Bill Expanding State’s Nexus Rules

The New Jersey Assembly passed legislation, A 2608, which would expand the state’s nexus rules by creating nexus for sellers that use in-state affiliates to perform activities to aid in business development or to maintain a New Jersey business market.  Moreover, the bill would create nexus for out-of-state businesses with distribution centers or subsidiaries in the state.

PENNSYLVANIA

Philadelphia DOR Releases 2012 KOZ Booklet

The Philadelphia Department of Revenue has released its 2012 Philadelphia Keystone Opportunity Zone Programs Booklet, which provides guidance on calculations, credits, two-factor apportionment formula, and more.

TENNESSEE

Tennessee General Assembly Approves Bill to Exempt Amazon from Tax

The Tennessee General Assembly passed legislation, HB 2370, which would temporarily exempt Amazon.com from collecting state sales tax.  Pursuant to the legislation, Amazon.com will build new facilities in the state and create thousands of jobs, in exchange for sales tax exemption through January 1, 2014.  The bill is now awaiting the Governor’s signature.

TEXAS

Texas Announces Amnesty Program Slated for June 2012

Texas has announced that it will offer a tax amnesty program for businesses, during which it will waive all interest and penalties for taxpayers that file or amend delinquent tax reports and pay all taxes due.  Reports originally due prior to April 1, 2012 are eligible, and the amnesty program will run from June 12 through August 17, 2012.

Weekly Update for 3/9: Arizona Rejects Amazon Legislation, While New Jersey Considers Implementing Amazon Law; Missouri Considers Amnesty Legislation; Pennsylvania Considers Closing the “Delaware Loophole”…and more.

March 12, 2012

 by Jennifer Weidler

ARIZONA

Arizona Senate Rejects Proposed Amazon Legislation

The Arizona Senate rejected proposed Amazon legislation, SB 1338, which would have broadened Arizona’s definition of retailer to include any company with a warehouse in the state.

CALIFORNIA

California Revises Publication on Internet Sales, Incorporating eBooks and Apps

The California State Board of Equalization revised Publication 109 regarding Internet Sales, in order to provide guidance on the tax treatment of eBooks and apps.  According to the Publication, the transfer of a downloadable file such as an eBook or app is not a taxable transaction, without purchasing any physical storage medium.

GEORGIA

Georgia House Approves Legislation to Establish Tax Tribunal

The Georgia House of Representatives approved legislation, HB 100, which would establish a state Tax Tribunal in the state’s judicial branch.

ILLINOIS

Illinois Releases Information Letter of “Deal-of-the-Day” Transactions

The Illinois Department of Revenue issued an Information Letter providing guidance on the treatment of “Deal-of-the-Day” transactions.  For more detailed information, see the Information Letter.

IOWA

Iowa Court Grants Refund Relief for Illegal Taxation

The Iowa District Court ordered a refund of franchise fees that were collected in excess of the amount determined to be allowable for which the City of Des Moines could impose.  The court found that the refund was a constitutional remedy for the illegal taxation of the city’s residents.  The fact that the funds gathered from the illegal taxation were used wisely, legally and with the best intentions was not a defense.

MISSOURI

Missouri House Approves Amnesty Legislation

The Missouri House has approved legislation, HB 1030, which would offer a tax amnesty period, slated to run from August 1 to October 31, 2012.  The amnesty program would cover all taxes administered by the Department of Revenue and would waive penalties.  The amnesty program is projected to raise $75 million for the state.

NEW JERSEY

New Jersey Finds Nexus Based on Telecommuting Employee

The New Jersey Superior Court upheld a Tax Court ruling, which found that a foreign corporation was subject to the New Jersey Corporate Income Tax because it regularly and consistently permitted one of its employees to telecommute from her New Jersey residence.  Her full-time telecommuting was viewed as doing business in the state, thereby requiring the payment of the tax as well as the filing of corporate income tax returns in New Jersey.

New Jersey Introduces Amazon Legislation

Legislation, S 1762, has been introduced in New Jersey that would grant Amazon.com a temporary state sales tax collection exemption if it builds warehouses within the state.   Pursuant to the bill, distribution facilities built in the state after January 1, 2012 would not create nexus with the state until July 1, 2013, provided that Amazon.com creates at least 1,500 full-time jobs in the state and makes a capital investment exceeding $130 million.

New Jersey Court Affirms Value of Residential Property Where Owner’s Evidence was Insufficient

The New Jersey Tax Court affirmed the value of a residential property established by the assessment after finding that the owner’s evidence regarding comparable sales was insufficient to establish the true market value of the property.  Although the owner overcame the presumption of validity attached to the assessment of his property, he was unable meet his burden of proof with regard to establishing the true market value of the property.

NEW MEXICO

New Mexico Governor Vetoes Combined Reporting Legislation

New Mexico’s Governor vetoed legislation, SB 9, which would have established combined reporting in the state.  The bill would have required combined reporting for multistate retailers with a 30,000 square feet or large facility in New Mexico.  Additionally, it would have lowered the top corporate income tax rate from 7.6 percent to 7.5 percent.

PENNSYLVANIA

Pennsylvania Considers Legislation to Allow Counties to Institute Local Taxes to Reduce or Eliminate Property Tax

The Pennsylvania legislature is considering legislation, HB 2230, which would allow counties in the state to institute a local sales or income tax in order to reduce or eliminate the property tax.  Pursuant to the bill, county governments could ask voters to approve a sales or income tax, which would ultimately provide property tax relief.

Pennsylvania Considers Competing Legislation to Close “Delaware Loophole”

During January, legislation, HB 2150, was introduced that suggested a close to the “Delaware loophole.” For previous coverage of that bill, please click here.  Competing legislation is currently being drafted that will seek to create a broader add-back provision than that contained in HB 2150.

VIRGINIA

Virginia Governor Approves Legislation Phasing in Single-Sales-Factor

Virginia’s Governor has approved legislation, HB 154, which creates a phase-in of single-sales-factor apportionment for retailers.  The bill requires retailers to begin utilizing a triple-weighted sales factor beginning July 1, 2012 and a quadruple-weighted sales factor beginning July 1, 2012.  Finally, a single-sales-factor would be implemented beginning July 1, 2015.

WISCONSIN

Wisconsin Rules that Individual is Responsible for Portion of Company’s Tax Liabilities

The Wisconsin Tax Appeals Commission held that an individual was responsible for a portion of a company’s sales tax and withholding tax liabilities.  The Commission reasoned that the evidence established that the individual maintained the title of president of the company, retained check-writing authority and participated on the board of directors.  As such the Commission found the individual to be a “responsible” person.