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Contact one
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J.D., CPA, Partner
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CPA, Principal
Thomas E. Mazurek, Jr.
CPA, Senior Manager
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Tax Tips – June 2011
State Amnesty Programs At-a-Glance
| State |
Amnesty Period |
Benefits |
| Arizona |
Sept. 1 to Oct. 1, 2011 |
Penalties waived |
| Colorado |
Oct. 1 to Nov. 15, 2011 |
˝ Interest & Penalties waived |
| Michigan |
May 15 to June 30, 2011 |
Penalties waived |
Amnesty
CO
Colorado Gov. John Hickenlooper signed legislation (S.B. 184) establishing a tax amnesty program from October 1 to November 30, 2011. The program will include outstanding tax liabilities due before December 31, 2010 for the following taxes:
Sales & use taxes and county or municipal sales taxes collected by the Department of Revenue; Gasoline and special fuel taxes; Cigarette and tobacco products taxes; Severance taxes; Certain local improvement district sales taxes; Sales & use taxes imposed by the Regional Transportation District, the Denver Metropolitan Scientific and Cultural Facilities District, Metropolitan Football Stadium, and regional transportation authorities; and Local marketing and promotion taxes and county lodging and rental taxes collected by the Department of Revenue.
Eligible taxpayers who remit unpaid or overdue taxes will receive a 50% reduction of applicable interest charges and a waiver of any fines or civil or criminal penalties otherwise provided by law during the tax amnesty period. Taxpayers who are mailed a notice of deficiency before October 1, 2011 or who are under investigation for criminal or fraudulent activities related to taxes collected by the Department of Revenue cannot take advantage of amnesty.
Please make note of the following:
Colorado is a home-rule state, which means that localities (counties, cities) are authorized to administer and collect their own sales & use taxes. In Colorado, most of the major cities, including Boulder, Colorado Springs, and Denver, administer and collect their own sales & use taxes. Businesses may need to register and remit sales tax to these localities in addition to the state. These and other home-rule cities are not included in this tax amnesty program. Businesses considering participating in this tax amnesty program need to carefully review the program requirements when they are made available by the Department of Revenue and evaluate whether it is more advantageous to utilize the State’s voluntary disclosure program or the tax amnesty program. While the benefits of the tax amnesty program are attractive, voluntary disclosure typically offers a limited look-back period and a waiver of older liabilities, as well as the advantage of being able to file anonymously through a representative, while tax amnesty programs more often do not include these features. Businesses need to evaluate their potential exposure and determine the best course of action.
Nexus News
CA
The California Assembly has passed an affiliate nexus bill (A.B. 155) that would, if enacted, amend the definition of "retailer engaged in business in this state" to include any retailer that is a member of a commonly controlled group and a member of a combined reporting group, both as defined, that includes another member of the retailer's commonly controlled group that, pursuant to an agreement with or in cooperation with the retailer, performs services in the state. The bill, which now moves on to committees in the CA Senate, would require Amazon and other internet retailers to collect sales tax on sales to California residents. The California Board of Equalization estimates that this legislation (if passed) could produce almost $80 million in additional tax revenue for a state that is struggling with a substantial budget deficit.
Other States
There has also been substantial nexus-related legislative activity in the following states:
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HI
The Hawaii Legislature has adjourned its 2011 regular session without passing legislation that would have conformed the State’s general excise tax laws to the Streamlined Sales Tax Agreement; added a "click-through nexus" provision; added an expanded nexus provision that would have presumed that an out-of-state person or entity conducting business in Hawaii was systematically and regularly engaging in business in Hawaii if certain conditions were satisfied or imposed general excise tax reporting requirements for both remote sellers and in-state sellers that do not have a physical presence in Hawaii. The legislation can be taken up in a 2011 special session (if one is held) or in the 2012 regular session.
LA
A bill (H.B. 641) has been introduced in the Louisiana House of Representatives that would add affiliate nexus and "click-through nexus" provisions to the state’s sales & use tax laws.
MN
The Minnesota Legislature has adjourned its 2011-2012 regular session without passing a so-called "click-through" nexus bill. Bills not enacted during this session may be considered in the 2012 regular session, and a 2011 special session is expected.
MO
The Missouri General Assembly ended its 2011 regular session without passing bills that would have conformed its sales & use tax laws to the Streamlined Sales Tax Agreement and created a so-called "click-through nexus" provision, as well as another nexus provision based on gross receipts from certain sales.
TX
The Texas Senate has passed a bill (S.B. 1) in a special session that contains the same sales & use tax nexus provisions for remote sellers that were contained in a previous bill (H.B. 2403) that was recently vetoed by Texas Gov. Rick Perry. The bill has been sent to the House of Representatives for consideration.
VT
The Vermont Legislature has approved legislation that includes a "click-through nexus" provision for sales & use tax purposes that was previously passed by the House of Representatives and remote-seller notice requirements that were previously passed by the Senate. The "click-through nexus" provision becomes effective on the date when, through legislation or other means, 15 or more other states have adopted requirements that are the same, substantially similar or comparable to Vermont’s "click-through nexus" requirements as determined by the Attorney General. The remote-seller notice requirements become effective on passage, and will be repealed when, through legislation or other means, 15 or more other states have adopted requirements that are the same, substantially similar or comparable to Vermont’s "click-through nexus" requirements as determined by the Attorney General.
Sales and Use Tax Relief for Storm Victims
The following states have provided various forms of sales and use tax relief to victims of recent devastating weather.
GA
The Georgia Department of Revenue is providing tax relief to the victims of severe storms, tornadoes, straight-line winds and associated flooding that occurred on April 27, 2011, in certain Georgia counties. As a result, sales and use tax return filing and tax payment deadlines for businesses whose principal place of business is located in the designated disaster areas have been postponed until June 30, 2011.
Taxpayers who reside in or have a business located in the following Georgia counties qualify for the relief: Bartow, Catoosa, Cherokee, Coweta, Dade, Floyd, Gordon, Greene, Harris, Habersham, Heard, Lamar, Lumpkin, Meriwether, Monroe, Morgan, Newton, Pickens, Polk, Rabun, Spalding, Troup, Upson, Walker and White.
LA
Taxpayers in areas of Louisiana affected by the 2011 spring flood are eligible for filing and payment extensions. The department will grant a 30-day filing extension for tax returns due May 15-31 on a case-by-case basis for taxpayers who: (1) evacuated as the result of a mandatory order; (2) engaged in preventative flood protection measures for homes or property located in an area projected to flood as a result of the opening of a spillway; or (3) suffered damage to a home or property as a result of flooding on a date a return was due.
NC
Businesses in certain North Carolina counties affected by April storms that had a filing and/or payment requirement for any North Carolina tax during the period of April 1 through May 31, 2011, will have penalties for failure to file and/or pay waived, as long as the return is filed and the tax paid by June 30, 2011.
Taxpayers in the following counties qualify for relief: Bertie, Bladen, Craven, Cumberland, Currituck, Greene, Halifax, Harnett, Hertford, Hoke, Johnston, Lee, Onslow, Pitt, Robeson, Sampson, Wake, and Wilson.
TN
The Tennessee Department of Revenue will provide sales tax refunds to individuals receiving federal disaster assistance as a result of the flooding and storms that occurred in May 2010. The deadline for filing a refund application for tax paid on qualifying purchases is June 30, 2011. Qualified individuals may file a claim for refund of sales tax paid to replace damaged or destroyed items including: major appliances, residential furniture and residential building supplies.
TX
Texas Governor Rick Perry has issued a disaster proclamation for certain counties recently ravaged by wildfires. As a result, purchasers can claim an exemption from sales tax on charges for labor to repair or restore real or personal property damaged as a result of the wildfires. Materials and equipment used in performing the repairs continue to be taxable. The exemption applies only to charges for labor to repair or restore damage resulting from a wildfire in a county declared a disaster area and does not extend to repairs to property damaged by other sources.
For information regarding the procedures to obtain the relief described above, contact one of the State and Local Tax Professionals at Tronconi Segarra & Associates.
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