|
QUESTIONS?
NEED MORE INFORMATION?
Contact one
of the Tronconi
Segarra &
Associates’ State
& Local
Tax Services Team
Leaders:
David E. Werth
J.D., CPA, Partner
Andrew J. Toth
CPA, Principal
Thomas E. Mazurek, Jr.
CPA, Senior Manager
State and Local
Tax Services
Audit Representation
Reverse Audits
Nexus Review
Voluntary Disclosure
Research & Analysis
Managed Compliance Agreements
Sales Tax System Development
Outsourcing
Merger & Acquisition Planning
Compliance Management
|
|
Tax Tips – April 2011
State Amnesty Programs At-a-Glance
| State |
Amnesty Period |
Benefits |
| Arizona |
Sept. 1 to Oct. 1, 2011 |
Penalties waived |
| Michigan |
May 15 to June 30, 2011 |
Penalties waived |
| Washington |
Feb. 1 to April 30, 2011 1 |
Interest & Penalties waived |
(1) Taxpayers had until April 18, 2011 to submit their amnesty application and file any outstanding returns and amended returns for which amnesty was requested.
Amnesty
AZ
The Arizona Department of Revenue will conduct an amnesty program later this year, running from September 1, 2011 through October 1, 2011. The “Tax Recovery Program” as it is officially called, will apply to all state & local taxes with the exception of estate tax and property tax and include taxable periods ending before January 1, 2010. Taxpayers will need to submit an application form, furnish information requested by the State and pay the tax and interest due by October 1, 2011. In exchange for voluntarily coming forward, the Department will waive or abate all or part of the civil penalties imposed and assess interest at a reduced rate.
Nexus News
AR
The governor has signed off on a double-whammy of sorts for internet retailers selling to customers in Arkansas. Combined affiliate nexus and “click-through nexus” legislation will become effective later this year (early July), 90 days after the adjournment of the 2011 legislature. The new law contains the following provisions:
Affiliate nexus
A seller is presumed to be engaged in selling property or taxable services for use in Arkansas if an affiliated person is subject to Arkansas sales & use tax and one of the following conditions are met:
the seller sells a similar line of products as the affiliated person and sells the products under the same or a similar business name; the affiliated person uses its in-state employees or in-state facilities to advertise, promote or facilitate sales by the seller to consumers; the affiliated person maintains an office, distribution facility, warehouse or storage place or similar place of business to facilitate the delivery of property or services sold by the seller to the seller's business; the affiliated person uses trademarks, service marks or trade names in the state that are the same or substantially similar to those used by the seller, or the affiliated person delivers, installs, assembles or performs maintenance services for the seller's purchasers within the state.
Click-through nexus
If an affiliate relationship does not exist, or by chance the remote seller can rebut the affiliate nexus presumption, Arkansas (like New York, Rhode Island, North Carolina, and just last month, Illinois) will presume that a remote seller is engaged in selling property or services in the state if the seller enters into an agreement with one or more Arkansas residents under which the residents, for a commission or other consideration, directly or indirectly refer potential purchasers, whether by a link on an Internet website or otherwise, to the seller. This presumption will only apply to remote sellers whose gross receipts from sales to Arkansas customers (who are referred to the seller by an Arkansas resident) exceed $10,000 for the preceding 12 months.
Multiple States
In late March, Missouri joined the ranks of a growing number of states who have introduced “click-through nexus” legislation (H.B. 970) since the beginning of the year. The provisions of this bill are very similar to other bills introduced in statehouses across the country. Moving further south, Alabama introduced a remote-seller notification bill (H.B. 365) requiring non-collecting retailers to notify purchasers of their use tax obligations and send them an annual statement of all of their purchases. The bill would also authorize the Department of Revenue to assess interest and penalties of $1,000 for each violation of the notification requirements.
Check back for further developments on nexus legislation in the coming months.
Nontaxable services “by any other name”. . . may be taxable
States and localities would be prohibited for five years from imposing "a new discriminatory tax" on mobile services, mobile service providers, or mobile service property under the Wireless Tax Fairness Act of 2011. The Act was introduced in both houses of the U.S. Congress on March 10, 2011 and has bicameral support, having been sponsored by members of both parties. But, even as members of Congress work to limit new taxes on certain telecommunications services, state and local taxing jurisdictions may attempt to tax such services “by another name.”
Here’s just one example: the Cities of Peoria and Phoenix (Arizona) assessed transaction privilege taxes against Brink's Home Security, Inc. (BHS) pursuant to Peoria City Code § 12-470(a)(2)(D) and Phoenix City Code § 14-470(a)(2)(D). Each code provides for taxation of gross income from providing “telecommunication services,” which include “[c]harges for monitoring services relating to a security or burglar alarm system located within the City where such system transmits or receives signals or data over a communications channel.” BHS protested the assessments, arguing that it provides interstate telecommunications services immune from municipal taxation. The Tax Court granted summary judgment for the Cities, concluding that the monitoring services are primarily intrastate and therefore taxable. The Supreme Court concluded that the telecommunications involved are not “intrastate.”
Finding themselves unable to tax the service as telecommunications, the Cities then called it (“by another name”) monitoring services. The Cities argued that the taxes are assessed on the monitoring services, not on the telecommunications, which they characterize as merely incidental to the services. Since the court of appeals majority did not discuss it, the Supreme Court remanded the matter to the court of appeals to consider this issue. City of Peoria v. Brink’s Home Security, Inc., Supreme Court of Arizona, (Mar. 3, 2011)
If the Wireless Tax Fairness Act of 2011 becomes the law of the land, and considering the complex nature of telecommunications services today, one can be certain that clever state and local tax authorities would attempt to tax such services “by another name.”
|
|
Thank you for your interest in the Tronconi Segarra & Associates LLP State & Local Tax electronic newsletter. This message was sent from Barbara Harmel at Tronconi Segarra & Associates LLP, 6390 Main Street, Suite 200, Williamsville, New York, 14221.
To unsubscribe from future State & Local Tax newsletters sent by Tronconi Segarra & Associates, please reply to this email and type "Unsubscribe" in the subject line.
Any tax advice included in this written or electronic communication was not intended or written to be used, and cannot be used, by the recipient for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or any other governmental taxing authority or agency.
The information contained in this message may be privileged and confidential and protected from disclosure. If you are not the intended recipient, or an employee or agent responsible for delivering this message to the intended recipient, you are hereby notified that any dissemination of, distribution of, copying of or taking action in reliance on this communication is strictly prohibited. If you have received this communication in error, please notify the sender immediately by replying to the message and deleting it from your computer
|
