Tax Developments

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December 02, 2013
Earlier today, the Supreme Court of the United States declined to hear argument on two cases involving online retailers.1 In the cases of Overstock.com, Inc. v. NY Dept. of Taxation, et al. and Amazon.com LLC, et al. v. NY Dept. of Taxation, et al., the Court denied writs of certiorari without comment, effectively staying out of the dispute for now but leaving the status quo undisturbed.  >More

October 23, 2013
The Supreme Court of Illinois recently affirmed a lower court’s ruling that the state’s click-through nexus legislation was preempted by a federal law governing taxes placed on electronic commerce.  >More

October 02, 2013
On September 27, 2013, Los Angeles Superior Court Judge Steven Kleinfield ruled in the taxpayers’ favor, granting their motion for summary judgment in the case of Lucent Technologies, Inc. et al. v. State Board of Equalization. [Lucent Technologies, Inc. v. California State Bd. of Equal. (Cal. Ct. App. September 27, 2013)].  >More

September 30, 2013
On September 27, 2013, Governor Deval Patrick signed into law Massachusetts House Bill 3662 (“H.B. 3662”), which repeals the Commonwealth’s sales and use tax on computer system design services and the modification, integration, enhancement, installation, or configuration of pre-written software recently implemented by House Bill 3535 (“H.B. 3535”).  >More

September 20, 2013
On September 19, 2013, the House Judiciary Committee released Seven Basic Principles on Remote Sales Tax. The purpose behind these principles is to guide discussion on the Marketplace Fairness Act and to encourage creative problem solving.  >More

September 20, 2013
The U.S Department of the Treasury and the Internal Revenue Service (IRS) have issued proposed regulations that address several long-standing discrepancies between how taxpayers and the IRS interpret the tax code related to the Section 174 deduction for research and experimentation (R&E) expenditures.  >More

August 29, 2013
Just weeks after the passing of the Commonwealth’s Transportation Finance Bill (“H.B. 3535”) through a legislative override, 20 top business leaders in Massachusetts filed an initiative petition to the state’s attorney general to repeal the law that made various computer services subject to sales and use tax. H.B. 3535 was passed into law on July 24, 2013 and took effect a week later on July 31, 2013.  >More

August 29, 2013
The New Jersey Department of Taxation issued Publication ANJ–29, which offers new guidance regarding what constitutes a taxable information service. New Jersey sales tax applies to the collection, compilation, or analysis of information, where the purpose of the transaction is the information itself, not a related professional service.  >More

August 26, 2013
Governor Pat McCrory, of North Carolina, signed House Bill 998 (aka Tax Simplification and Reduction Act) into law Tuesday, July 23, 2013. Among other outcomes, the state’s Research and Development Credit, formerly known as the Technology Development Credit, has been extended through 2015.  >More

August 06, 2013
The Connecticut Department of Revenue Services (“Department”) will conduct a tax amnesty program (“Program”) during the period of September 16, 2013 until November 15, 2013 for any taxable period ending on or before November 30, 2012 (House Bill 6704, enacted June 18, 2013 and effective July 1, 2013). The Program applies to all taxes administered by the Department, with the exception of the motor carrier road tax.  >More

August 05, 2013

Back to School Sales Tax Holiday: August 2–4, 2013

State sales tax (or use tax) will not be collected on the sale/purchase of the following “covered items”: 1) articles of clothing with a sales price of $100, or less, per article of clothing; 2) a single purchase, with a sales price of $750, or less, of computers, computer software, and school computer supplies; 3) noncommercial purchases of school supplies, school art supplies, and school instructional material, up to a sales price of $50 per item; and 4) noncommercial purchases of books with a sales price of not more than $30 per book.

July 31, 2013
As a result of action taken during Arizona’s recently concluded legislative session, the state is making significant changes to the Transaction Privilege Tax (TPT). The changes include the following:  >More

July 30, 2013
On July 24, 2013, Massachusetts lawmakers voted to override Governor Deval Partick’s veto of the Commonwealth’s Transportation Finance Bill (“H.B. 3535”). As a result of the override, the gas tax will increase by three cents per gallon; tax on cigarettes will increase by one dollar per pack; and computer system design services and the modification, integration, enhancement, installation, or configuration of standardized software will now be subject to sales and use tax.  >More

July 24, 2013
Louisiana revenue officials have announced that the state’s 2013 Tax Amnesty Program (“Program”) will begin on September 23, 2013 and end on November 22, 2013. The Program applies to all taxes administered by the Louisiana Department of Revenue (“Department”), except motor fuels taxes, and provides taxpayers an opportunity to avoid all penalties and to get a waiver of half of the interest that would otherwise be owed on the unpaid taxes.  >More

July 20, 2013
In the aftermath of a 2011 court defeat involving software taxation, California revenue officials appear poised to seek legislative assistance in undoing the court’s ruling and imposing sales and use taxes—retroactively—on a wide variety of computer software programs. California broadly levies taxes on the sale or use of tangible personal property in the state.  >More

July 09, 2013
California is phasing out its Enterprise Zone Program (“Program”) and replacing it with three new tax incentives, including a statewide sales tax exemption for some manufacturers and biotechnology companies. The changes were authorized by Assembly Bill 93 (“AB 93”), which passed the state Senate on June 25, 2013 and was approved by the Assembly on June 27, 2013.  >More

July 09, 2013
In CSX Transportation, Inc. v. Alabama Department of Revenue, the Eleventh Circuit Court of Appeals (“Circuit Court”) held on July 1, 2013 that Alabama’s imposition of sales and use tax on diesel fuel purchased by rail carriers violates the Railroad Revitalization and Regulatory Reform Act of 1976 (“4-R Act”). This is the second time that the case has been before the Circuit Court.  >More

July 01, 2013
Senate Bill 1151 (“SB 1151”), effective September 1, 2013, will simplify sales tax collection for convenience stores and other businesses that sell snacks in individual-sized servings. On September 1st, sales tax will be due on all sales of single-sized servings of chips; nuts; crackers; breakfast, granola, yogurt, and protein bars; and other snacks as provided below.  >More

June 28, 2013
On April 11, 2013, the Texas Court of Appeals (“Court”) reversed the district court’s decision and held that items placed in hotel rooms for use by hotel guests such as soap, shampoo, conditioner, mouthwash, shower caps, pens, and notepads (“hotel consumables”) may be purchased exempt from sales tax under the resale exemption.  >More

June 26, 2013
Louisiana Governor Bobby Jindal has signed into law a bill that disqualifies many retailers from participating in the state’s Enterprise Zone Program (“Program”) and makes other changes to the Program’s required employment criteria.  >More

June 25, 2013
Louisiana will have three tax amnesty periods between 2013 and 2015 covering most taxes. On Friday, June 21, 2013, Governor Bobby Jindal signed into law House Bill 456 (“H.B. 456”) creating the Louisiana Tax Amnesty Program (“Program”), which applies to all taxes administered by the Louisiana Department of Revenue (“Department”), with the exception of motor fuels tax.  >More

June 24, 2013
On June 11, 2013, Iowa Governor Terry Branstad signed into law House File 625 (“H.F. 625”) (effective July 1, 2013), known as the “e-fairness” legislation. The law is designed to close existing loopholes that establish nexus for sales tax.  >More

June 17, 2013
Governor Rick Perry has vetoed a bill that would have significantly changed the state’s Enterprise Zone Program (“Program”), which provides sales tax refunds to companies that create and retain jobs and make capital investments in Texas. In announcing his veto of House Bill 1982 (“HB 1982”) on Friday, June 14, 2013, Governor Perry recommended the Legislature conduct an interim study of the Program, which has been in place since 1993.  >More

June 07, 2013
The Texas Supreme Court (“Court”) has upheld a refund of sales taxes paid by a Ryan client on items resold to the United States government. In Combs v. Health Care Services Corporation, Nos. 11-0283, 11-0652 (Tex., June 7, 2013), the Court ruled that Health Care Services Corporation (HCSC), successor to Blue Cross and Blue Shield of Texas, Inc., could claim a sale-for-resale exemption on tangible personal property and taxable services purchased to fulfill contracts with the federal government to administer Medicare Part A, Medicare Part B, and the Federal Employees Health Benefit Program (“FEP”).  >More

June 05, 2013
During its recently adjourned legislative session, the Texas Legislature enacted numerous changes to the Tax Code, as well as a number of bills to create or change economic development incentives. In most instances, the bills are still awaiting action by Governor Rick Perry, who has until June 16, 2013 to veto legislation. The following is a summary of actions on key bills.  >More

May 31, 2013
The Texas Legislature has sent Governor Rick Perry the first major franchise tax relief bill since the revised Texas franchise tax was enacted seven years ago. House Bill 500 (“HB 500”), an omnibus franchise tax reform bill, provides for temporary tax rate reductions and a new method of computing taxable margin, continues the small-business exemption (which was scheduled to be phased-out), allows deductions for certain flow-through funds, addresses issues with cost of goods sold for two industries, and simplifies reporting requirements.  >More

May 31, 2013
The Texas Legislature has passed legislation to create a new state sales tax rebate aimed at encouraging increased investments in telecommunications, Internet access, or cable equipment. House Bill 1133, by Representative John Otto (R-Dayton) and Senator Craig Estes (R-Wichita Falls), is on the desk of Governor Rick Perry and, if signed, would take effect on September 1, 2013.  >More

May 30, 2013
The Texas Legislature has sent Governor Rick Perry a bill creating tax incentives aimed at encouraging companies to conduct research and development activities in Texas. The bill, House Bill 800, by Representative Jim Murphy (R-Houston), passed the House on May 2, 2013 and was approved in the Senate on May 21, 2013.  >More

May 29, 2013
On May 22, 2013, New York Governor Andrew M. Cuomo announced Tax-Free NY, an initiative that will transform State University of New York (SUNY) campuses and university communities into tax-free communities.  >More

May 28, 2013
The Texas Legislature has approved legislation to create a temporary sales tax exemption intended to attract major data center projects to Texas. The bill now goes to Governor Rick Perry, who has 20 days to decide whether to sign, veto, or allow the bill to become law without his signature.  >More

May 14, 2013
On May 8, 2013, the South Carolina Supreme Court shot down a broad challenge to the state’s administration of sales and use tax. Attorney Matthew Bodman filed suit in 2011 alleging that the numerous exemptions to the tax were not rationally related to the tax itself. The fatal flaw in his argument, according to the court, was that Bodman did not single out individual exemptions or caps for criticism.  >More

May 13, 2013
A Travis County District Judge has invalidated several provisions of the Texas Comptroller of Public Accounts’ rule relating to refunds of sales and use tax. In Ryan, LLC v. Combs, Cause No. D-1-GN-12-002388 (Dist. Ct. – Travis Cty., May 10, 2013), Judge Amy Clark Meachum declared that subsections (a)(4), (b)(10) and (e) of 34 TAC § 3.325 (effective January 7, 2013) and subsection (a)(4) of the previous version of the rule (effective July 19, 2011) are invalid and illegal.  >More

May 09, 2013
The Marketplace Fairness Act, passed Monday, May 6, 2013 in the United States Senate (Senate Bill 743) by a 2 to 1 ratio with bipartisan support, seems likely to face a more difficult challenge from Congressional Republicans in the House of Representatives (H.R. 684).  >More

May 07, 2013
On Monday, May 6, 2013, the Marketplace Fairness Act passed in the United States Senate (Senate Bill 743). If enacted, it will allow states and the District of Columbia to require online retailers to collect sales and use tax without a physical presence nexus requirement.  >More

May 07, 2013
Florida has expanded its machinery and equipment exemption for manufacturing by the passage of House Bill 7007 (“H.B. 7007”). Governor Rick Scott is expected to sign the bill quickly. (Governor Scott sponsored the expansion of the credit as part of his economic development initiative for the state of Florida.)  >More

April 16, 2013
In a move designed to lure data centers to Virginia, effective July 1, 2010, the Virginia Legislature amended Virginia Code Section 58.1-609.3. This amendment provides retail sales and use tax exemption for data centers that meet various criteria of capital investment, new jobs, and wage rate.  >More

April 02, 2013
On March 28, 2013, in a consolidated opinion for the cases of Overstock.com, LLC v. New York State Department of Taxation and Finance and Amazon.com, LLC v. New York, the New York Court of Appeals (“Court”) upheld a provision of New York law, under which out-of-state retailers that advertise online may be required to collect the state’s sales tax.  >More

March 25, 2013
June 30, 2013 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 2012 may not be recoverable if the required documentation is not filed with the respective EU authority by this date.  >More

March 19, 2013
On Friday, March 8, 2013, the Internal Revenue Service (IRS) announced that employers participating in, or planning to participate in, the Work Opportunity Tax Credit (WOTC) program shall be granted a temporary extension of the time allowed to file Form 8850, Pre-Screening Notice and Certification Request for the Work Opportunity Credit. The full text of the IRS bulletin can be found at IRS Notice 2013-14.  >More

March 08, 2013
In a new decision styled Combs v. Roark Amusement & Vending, L.P., No. 11-0261 (Tex. – March 8, 2013), the Texas Supreme Court (“Court”) has determined that the resale exemption applies to purchases of plush toys used in coin-operated amusement machines.  >More

February 25, 2013
On February 12, 2013, Ohio Governor John Kasich released the text of proposed House Bill 59 (“HB 59”). The proposed language includes changes for income tax, sales and use tax, and severance tax.  >More

February 08, 2013
New legislation that benefits the holder community has just been enacted by Delaware. House Bill 2 (“H.B. 2”) was signed into law by Delaware Governor Jack A. Markell on January 30, 2013. The new law essentially provides for several key changes to the Delaware Secretary of State’s unclaimed property Voluntary Disclosure Agreement (VDA) program, which was first enacted into law last summer via Senate Bill 258 (“S.B. 258”).  >More

January 30, 2013
On January 11, 2013, the California Department of Housing and Community Development released proposed Enterprise Zone regulations that make substantial revisions to the hiring tax credit voucher application process. The proposed regulations reflect the reforms called for in Governor Jerry Brown’s proposed 2013-2014 budget, which was released on January 10, 2013.  >More

January 22, 2013
The American Taxpayer Relief Act of 2012 (“Act”), which was signed by the President in early January, retroactively renews and extends the Federal Alternative Fuels Excise Tax Credit (“Alternative Fuels Credit”), as specified under Internal Revenue Code Section 6426(d). The Alternative Fuels Credit, which previously expired December 31, 2011, has been extended through December 31, 2013.  >More

January 16, 2013
Ford submitted remittances to the Internal Revenue Service (IRS), pursuant to Revenue Procedure 84-58, 1984-2 C.B. 501, superseded by Revenue Procedure 2005-18, 2005-1 C.B. 798, to stop the accrual of underpayment interest related to 30-day letters it received from the IRS. Ford designated these remittances as deposits in the nature of a cash bond, but subsequently, Ford requested that the IRS treat the remittances as advance payments.  >More

January 11, 2013
With the last minute passage of H.R. 8: American Taxpayer Relief Act of 2012, Congress retroactively extended the Federal Empowerment Zone Employment Credit (“Fed EZ Credit”) for calendar years 2012 and 2013. The Fed EZ Credit previously expired at the end of 2011.  >More

January 03, 2013
As a part of the “Fiscal Cliff” deal (H.R. 8: American Taxpayer Relief Act of 2012), Congress retroactively extended the Federal Research and Experimentation Tax Credit [“R&E Credit,” also commonly referred to as the “Research and Development (R&D) Tax Credit”] until the end of 2013.  >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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