Tax Developments

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October 25, 2012
The Texas Supreme Court (“Court”) has turned away yet another constitutional challenge to the revised Texas franchise tax (also known as the “Margins Tax”) in the case of In Re: Nestle USA, Inc. (No. 12-0518 – Tex., October 19, 2012).  >More

October 19, 2012
On October 16, 2012, the Pennsylvania Supreme Court upheld the decision of the Commonwealth Court that pallets are not “containers” for sales tax purposes. No. 113 MAP 2011, affirming Proctor & Gamble Paper Products Co. v. Commonwealth of Pennsylvania (No. 786 F.R. 2009, decided October 13, 2011).  >More

September 27, 2012
Kentucky’s Tax Amnesty Program (“Program”) begins October 1, 2012 and expires November 30, 2012. The Program offers a waiver of penalties and half the interest due on taxes paid during the amnesty period. Amnesty applies to taxable periods ending or transactions occurring after December 1, 2001 and prior to October 1, 2011.  >More

August 27, 2012
On August 7, 2012, Illinois Governor Pat Quinn signed Senate Bill 3616 into law authorizing the extension of the Illinois Enterprise Zone Program. The new law extends the expiration date of 97 existing enterprise zones:  >More

August 06, 2012
On July 16, 2012, the Massachusetts Department of Revenue issued Directive 12-4: Application of Sales Tax to Sales and Redemption of Qualifying Promotional Vouchers. Directive 12-4 clarifies that the sales of qualifying promotional vouchers that later may be redeemed are not subject to sales tax when purchased. Examples of such arrangements include Deal of the Day, Groupon, and LivingSocial. Only purchases of qualifying promotional vouchers or coupons are excluded from tax.  >More

August 06, 2012
On July 18, 2012, New York Governor Andrew Cuomo signed Senate Bill 1462 into law authorizing a municipal corporation to provide a real property tax exemption for improvements to Leadership in Energy and Environmental Design (LEED) certified or other green initiative certified buildings. Municipal corporations will now decide whether to adopt the exemption.  >More

July 20, 2012
On July 11, 2012, Governor Markell signed into law Senate Bill 258 (“SB 258”), authorizing the Delaware Secretary of State (“Secretary”) to offer and enter into a Voluntary Disclosure Agreement (VDA) for unreported abandoned and unclaimed property (AUP). In so doing, SB 258 allows the Secretary to shorten the “look-back” period for Delaware VDAs by as much as five years.  >More

June 27, 2012
Delaware’s False Claims and Reporting Act (DFCRA) allows private citizens to bring civil law suits on behalf of the government and allows the government to intervene and join the suit. Under the DFCRA, a citizen’s or plaintiff’s suit must allege that the business owed an amount to the government and that the business knowingly made or used a false record or statement to conceal or avoid the obligation.  >More

June 27, 2012
Texas Comptroller of Public Accounts Susan Combs recently announced that she will allow taxpayers to change their election to deduct from total revenue 30%, the cost of goods sold, or certain compensation paid to employees. The Texas franchise tax or “Margins Tax” allows taxpayers, depending on their business, to elect to pay tax based on the lesser of income—less cost of goods sold, income less compensation, or income less 30%.  >More

June 12, 2012
In a private letter ruling issued May 31, 2012, the Pennsylvania Department of Revenue (“Department”) concluded that accessing prewritten software via the Internet is taxable, as long as the user is in Pennsylvania. Letter Ruling SUT-12-001. The ruling represents a marked departure from the Department’s earlier treatment of cloud computing.  >More

June 12, 2012
The Massachusetts Department of Revenue (“DOR”) recently issued two letter rulings finding that software accessed in the “cloud” is taxable depending on the level of access and control over the software application granted to a customer. These letter rulings are representative of the state’s approach to the taxation of cloud computing.  >More

June 11, 2012
Kansas’s House Bill 2117 (“HB 2117”), recently signed by Governor Sam Brownback, repealed the state’s 24-month severance tax exemption for gas wells and oil wells that produce more than 50 barrels of oil per day. Only production after June 30, 2012 is affected.  >More

June 11, 2012
Beginning July 1, 2012, charges to electronically access or obtain construction plans and construction project information will be subject to Wisconsin sales and use tax. Wisconsin imposes tax on specified digital goods, additional digital goods, and certain digital codes. Under Wisconsin law, news or other information products are considered additional digital goods when delivered electronically.  >More

June 08, 2012
On April 26, 2012, the Washington Supreme Court held that regardless of disclosure, Washington law prevents a business from recouping the Business and Occupation (“B&O”) tax as an added charge to its sales price. The court stated that the B&O tax may be included in the sales price, but it may not be added as a separate charge on top of the sales price, whether disclosed or not.  >More

June 05, 2012
Indiana Governor Mitch Daniels recently signed House Bill 1072 (“HB 1072”), providing new gross retail tax exemptions and extending the period for certain refund claims. Effective July 1, 2012, HB 1072 eliminates the prohibition of filing an appeal with the tax court, if the Indiana Department of Revenue (“Department”) takes longer than three years to settle a claim.  >More

May 22, 2012
Texas’s Tax Amnesty Program (“Program”) begins June 12, 2012 and ends August 17, 2012. The Program offers a waiver of penalty and interest on taxes paid during the amnesty period. Amnesty applies to taxes that were due before April 1, 2012 and is available for franchise tax, sales and use tax, and most taxes and fees administered by the Comptroller.  >More

May 22, 2012
June 15, 2012 is the last day taxpayers can take advantage of Ohio’s Tax Amnesty Program (“Program”). The Program allows taxpayers to obtain penalty and partial interest waivers on payments of unreported or underreported taxes that were due and payable as of May 1, 2011.  >More

May 04, 2012
In Indiana Department of State Revenue v. AOL, LLC, the Indiana Supreme Court (“Court”) recently reversed a Tax Court decision and held an out-of-state online service provider was liable for use tax on certain packages and promotional materials sent from out-of-state producers to Indiana residents.  >More

May 04, 2012
While campaigning to become the Governor of Michigan, candidate Rick Snyder proposed to eliminate the business personal property tax because he felt that it was an impediment to attracting reinvestment and new investment into Michigan. Following the Governor’s lead, legislators in both the House and Senate have filed bills that would eliminate, phase out, or diminish the effects of personal property tax on businesses.  >More

May 03, 2012
The Washington Supreme Court denied a petition for review of Getty Images, Inc. v. Seattle, which held that the City of Seattle had properly assessed Business and Occupation (B&O) tax on intercompany fund transfers.  >More

May 03, 2012
On March 28, 2012, Florida Governor Rick Scott signed House Bill 7087 (“HB 7087”), an economic development bill, which includes changes in corporate income tax, credits and incentives, sales and use tax, property tax, severance tax, and oil production tax.  >More

April 10, 2012
In Aquila Foreign Qualifications Corporation v. Director of Revenue, (MO SC No. 91784, March 6, 2012), Missouri’s Supreme Court (“Court”) denied a convenience store/restaurant a partial sales tax exemption for electricity used to prepare food for sale.  >More

April 10, 2012
In Kelly’s Food Concepts of Alabama, LLP (“Kelly’s”), the Alabama Department of Revenue (“Department”) rejected a sale-for-resale exemption claimed by restaurants on purchases of plastic utensils, paper napkins, and other items provided to customers.  >More

March 20, 2012
Texas Comptroller of Public Accounts Susan Combs (“Comptroller”) launched Project Fresh Start, an amnesty program (“Program”) aimed at collecting delinquent taxes owed by Texas businesses. The Program will run from June 12, 2012 to August 17, 2012, during which time taxpayers can pay past due taxes in full and receive waiver of penalty and interest charges normally assessed.  >More

March 20, 2012
In an effort to limit a sales tax exemption for technology transfers and in spite of an adverse court decision, the staff of California Board of Equalization (“Department”) proposed a study or an interested-parties process to define the value of media (discs, drives, etc.) used to store and sell prewritten software.  >More

March 15, 2012
June 30, 2012 is an important date for taxpayers who may be eligible to recover value-added tax (VAT) paid to many European Union (EU) member countries. In many cases, VAT paid in 2011 may not be recoverable if the required documentation is not filed with the respective EU authority by this date.  >More

March 08, 2012
Effective October 1, 2012, the Alabama Terminal Excise Tax Act will change Alabama’s fuel taxes to impose tax at the terminal rack or when the fuel is imported into the state.  >More

February 20, 2012
In a case developed and argued at the administrative level by Ryan, LLC, a Texas Court of Appeals (“Court”) has ruled that certain specialized surgical instruments are exempt from sales and use taxes. In Zimmer US, Inc. v. Combs, No. 03-11-00178-CV (Tex. App. – Austin, February 9, 2012), the Court considered whether cutting guides, reamers, provisional implants, and other surgical instruments qualify for exemption.  >More

February 13, 2012
The Washington Department of Revenue (“Department”) determined that an out-of-state retailer (“Retailer”) is required to collect use tax based on the activities of an in-state affiliate of the retailer. [Wash. Dept. of Rev., Decision Det. No. 10–0057 (2/20/11)].  >More

February 13, 2012
In Northeastern Pennsylvania Imaging Center v. Pennsylvania, the Supreme Court of Pennsylvania (“Court”) reversed a lower court decision and held that installed MRI and PET/CT scan systems should be treated as personal property for sales tax purposes. [No. 93 MAP 2009 (Pa. 2011)].  >More

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Ryan Abandoned and Unclaimed Property Alert: Delaware Unclaimed Property Voluntary Disclosure Program Update.
A deadline is quickly approaching for unclaimed property, creating a limited window of time for businesses to take action. As of June 30, 2014, the... >More

Minnesota Sales and Use Tax: Equipment Exemption Enacted.
Minnesota Governor Mark Dayton signed legislation that exempts sales and purchases for telecommunications or pay television services machinery and equipment from sales and use tax... >More

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