Completely Compliance- Across the Country

by DMA Staff | Apr 03, 2018

Looking Back

Ohio: The rate rounding was changed effective January 8, 2018. Per HB 49, county tax must be levied in increments

Arkansas: The state released notification of Act 141 which redefines candy, soft drinks and digital products, effective January 1, 2018. Candy and soft drinks are redefined so that they are no longer under the umbrella of food and food ingredients. Therefore, the full 6.5% state rate applies instead of the reduced food rate of 1.5%. In addition to this, the Act defines digital goods as subject to the full state, county and city rates.

Connecticut: Running through November 30, 2018, the state will provide an amnesty program called Fresh Start. Penalties will be waived and interest reduced to 50% for those who qualify. The qualifying liability owed must have failed to have been reported through December 31, 2016.

Cook County, Illinois: In our last issue of Completely Compliance, we noted that the sweetened beverage tax was moving forward effective August 2017. However, since then, the tax has been repealed effective December 1, 2017. Between the effective and repealed dates, the tax must still be collected and paid until November 30, 2017. A special “close out process” is in place for tax remittance and can be found on their website.

Massachusetts: The Commissioner has made the decision to not pursue the accelerated sales tax remittance program (ASTR). After a feasibility study issued on October 31, Commissioner Harding released a statement on November 1 that the program could not be implemented by the June 2018 date, and no further action will be taken.

Mississippi: The state has provided regulation on economic nexus and the requirement to register. At a threshold of $250,000 in sales into Mississippi in the last 12-month period, businesses are now required to register with the Department of Revenue and collect the appropriate sales tax. The state further defined exploiting the Mississippi market to include television and application advertising, telemarketing and direct mail.

New Jersey: As noted in a previous issue, we remind you that another round of New Jersey rate reductions took place January 1, 2018. The state rate decreased from 6.875% to 6.625%. of one-tenth of one percent (0.10%) instead of the previous one-quarter of one percent (0.25%). The state, however, continues to report at the one-quarter increment. Below is an example of the new calculation provided by the state. “For example, use tax is due for both Franklin County (1.75%) and the state (5.75%) on taxable purchases. The county portion is reported as the 2-digit county number (25 for Franklin County) and the rate (1.75% divided by .05% = 35).  The new Franklin County rate code is 2535. The state portion of the rate code remains unchanged (8923) and is made up of the state code (89) and the rate (5.75% divided by .25% = 23).”

In addition, the Ohio Tax Amnesty Program started January 1 and ran through February 15, 2018. 100% of penalties and 50% of interest were waived for those participating.

Port Townsend, Washington: The city has made some changes in the qualifications of business and licensing. If your company generates less that $100,000 in a calendar year, you are no longer required to file in 2018 and future periods. As the renewals are processed through the Washington Department of Revenue site, and it was not able to be updated by January 1, you may have received notification that the license is due. The City asks you pay the amount through the portal, and any remaining balance will be invoiced by the city later. To review the change of notice, go to WebLink Documents Online under City Council and review Ordinance 3184.

Looking Forward

Alabama: Signed on February 27, the Alabama Tax Delinquency Amnesty Act of 2018 will be in effect from July 1, 2018 to September 30, 2018. All penalties and interest will be waived if the delinquent tax was for periods prior to January 1, 2017. All applications must be approved and some conditions are applicable.

California: SB 993 was introduced in February which would impose a sales and use tax on services. Some service types will continue to be exempted, such as health care services and businesses with less than $100,000 in gross receipts in the last four quarters. If passed, the bill would be effective January 1, 2019.

Colorado: After use tax notifications went effective July 1, 2017, the state is sending out reminders to sellers that Annual Purchase Summaries must be sent to purchasers in which use tax must be reported and paid. For individuals, the use tax can be reported as an attachment on the DR 0104 and is due by the April 15th deadline. Businesses can report use tax on the DR 0252. Note that reporting is not necessary if the liability owed is less than $300 cumulative total. If use tax exceeds this total, a monthly report must be filed by the 20th of each month. If less, an annual return can be filed by January 20, 2019.

Grand Junction, Colorado: The city has capped their vendor’s discount effective January 1, 2018. The discount is calculated at 3.333% of the tax collected. It cannot exceed $500.

Ridgway, Colorado: The city has followed suit with many other local Colorado jurisdictions by utilizing the third party MuniRevs to handle their online filing and payment. Because of the transition, the City will no longer send paper returns or accept paper returns or payments.

Georgia: HB 61 has passed the house and is currently making its way through the Senate. If passed, the bill would require businesses with $250,000 or more in gross sales in the previous year or 200 separate retail sales of electronically or physically delivered tangible personal property to register. The bill is nearly identical to similar bills being passed in other states regarding nexus provisions.

Indiana: SB 257 will specify the taxability of software based off of how it is accessed and whether it is prewritten (canned) software. The result, if passed, is that prewritten software is not taxable if the purchaser is buying the right to access it remotely.

Kentucky: Moving to appropriations as of March 1, HB 569 will increase the sales tax rate from 6% to 7% and end many current exemptions allowed. While the bill has not had much recent movement, it is worth noting.

Louisiana: There are many bills that were part of the extraordinary session which convened on February 19 and adjourned March 5. The issue was to determine a way to make up lost revenue from the expiration of the 1% sales tax rate increase that was implemented in 2016. The rate increase is set to expire on June 30th and reduce from 5% to 4%. Some of the bills were aimed at expiring the rate and various types of exemptions and exclusions, while others wanted to keep a rate increase ranging from 0.25% to 2% depending upon the bill. Some aimed to reduce corporate income tax deductions. Unfortunately, none of the bills introduced actually passed during the session.

New Mexico: On March 2, the Governor signed HB 194, which will allow for alternative ways to provide evidence of exemption. These alternative documents could be in the form of an invoice or purchase order so long as the requested information is on the document such as seller’s name, date of transaction and invoice number, for example. The documents would be a replacement of the Non-Taxable Transaction Certificate (NTTC).

New York City, New York: The Commercial Rent Tax thresholds will be changing effective July 1, 2018. The thresholds are aimed at helping aid smaller businesses in the Manhattan area. Rent tax thresholds for a business with up to $5 million will increase from $250,000 to $500,000 and income from $5 to $10 million will increase from $500,000 to $550,000.

Ohio: For those who file the Municipal Net Profit Tax, the state has launched the ability to participate in centralized filing through the Ohio Business Gateway instead of to the individual municipalities. Companies must register and begin filing and paying the quarterly estimated payments, the first of which is due April 15th. The 2018 return will be due in April 2019.

Pennsylvania: Effective April 1, 2018, the use tax notification process will be in place requiring businesses to send notices to purchasers who were not charged sales tax. The notices will list the products and prices of the items purchased and include an annual notice for purchases.

Texas: The state is offering a tax amnesty program which will last from May 1 through June 29, 2018 and will cover periods prior to January 1, 2018. Local motor vehicle tax, IFTA and PUC gross receipts will not be applicable. Outstanding liabilities cannot be included on any other amnesty program.

Washington: On March 19, the state released a new online tax portal with various new capabilities. The old system will be retired and a new login will need to be established. Because of this transition, the February return due in March will not be available to file online. Therefore, the state has extended the due date for the return to April 5, 2018.

Wisconsin: AB 944 will affect sales and use taxes in the state on two different levels. First, the Act will provide a rebate on sales and use tax for the cost of raising a child in the amount of $100 per child. If the rebate is claimed properly, it will be paid out by September 1, 2018. Also, the bill will create a sales tax holiday. The holiday will occur the first Saturday in August 2018 and last until Sunday. Any item sold that is more than $100 will not be subject to sales and use taxes. Of course, there are some exceptions which apply.

Cayoose Creek Indian Band, Canada: The Cayoose Indian Band implemented a First Nations Goods and Services Tax (FNGST) which was effective February 13th. Typically FNGST is a 5% tax that applies to most supplies of goods and services. This tax must be added to said supplies when occurring on Cayoose Creek lands.

Completely Compliance is a quarterly e-newsletter exclusively for clients and employees of DMA. It is intended to provide relevant sales/use tax news, events, and information. As such, this e-newsletter should be used for general informational purposes only, and not as a substitute for consultation with professional tax, legal, or other competent advisers. Before making any decision or taking any action based upon information contained in this e-newsletter, you should consult with a DMA professional.