SALT Newsletter - Spring 2013
Thank you for your continuing interest in our State & Local Tax e-newsletter. Beginning in August, we will publish our newsletter quarterly. Our focus will be on the predominant state and local tax issues that we believe many of you face on an ongoing basis. As always, we will discuss ideas and solutions designed to help you manage your risk and maximize your wealth.
State Amnesty Programs At-a-Glance
Ohio - Consumer's use tax
Oct. 1, 2011 to May 1, 2013
Interest & Penalties waived
(1) Depending on specific circumstances. For additional informamtion on Ohio's consumer's use tax amnesty program, click on the following link: http://www.tax.ohio.gov/sales_and_use/index_use.aspx
Proposed budget includes credits and other tax provisions
- extend the MTA business tax surcharge for five years;
- extend the film production tax credit for five years, enhance the credit, and improve transparency;
- establish the New York Innovation Hot Spots Program;
- extend the high income charitable contribution deduction limitation for three years;
- close the royalty income "loophole";
- extend and enhance the historic commercial properties rehabilitation tax credit;
- establish the Charge NY electric vehicle recharging equipment tax credit;
- establish tax-free sales and the sale of alcoholic beverages at Taste-NY facilities;
- update criteria for refusal and revocation of a sales tax certificate of authority;
- expand the cigarette and tobacco retailer registration clearance process;
- increase the civil penalty for possessing unstamped cigarettes; and
- allow local governments to extend existing sales tax rates without state legislative approval.
Source: 2013-2014 New York State Executive Budget, Revenue, Article VII Legislation, New York State Division of the Budget, January 22, 2013
QUESTIONS? NEED MORE INFORMATION?
Contact one of the Tronconi Segarra & Associates State & Local Tax Services Team Leaders:
David E. Werth, J.D., CPA
Andrew J. Toth, CPA
Thomas E. Mazurek, Jr., CPA
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
Resale and Exempt Sales Certificates
- No exempt certificate on file
- Expired certificate
- Incomplete certificate
- Invalid certificate
Ohio Commercial Activity Tax Update
Finally, you need to prepare yourself for the inevitable fact, that at some point, your company will be audited for state and local tax purposes. States are desperately trying to close budget gaps and looking to generate additional revenue to fund their programs, and audits are one way to accomplish this. Audits are not fun, but they shouldn’t keep you up at night either, as long as you are organized and prepared for the auditors, their information requests and sometimes endless questions. One of the ways to do this is to verify that you have proper documentation (exemption or resale certificates) to substantiate non-taxable sales. Another way is to review the supporting documentation for your tax returns to determine that it is complete and actually reconciles to your financial reporting system. Know where you may have taken an aggressive position on a return and prepare your arguments to support that position and likewise know where you may have the opportunity to utilize refunds or credits to offset any tax that maybe assessed.
Most importantly, know when it is time to consult a third party who may more experience than you or your employees in a particular tax or potential issue. The last thing you want to do is let an auditor discover a large deficiency and not be able to explain what happened or try to haphazardly explain the matter. This will not only hurt your relationship with the auditor but will lead to mistrust and doubt about the company’s business activities.
The steps described above may not be easy and may require some research, discussions with sales, IT and accounting personnel and an extensive review of a large number of tax returns and related information to determine whether your company is sufficiently in compliance with state and local tax laws. However, given the nature of the economy today and the aggressiveness of state and local tax auditors, how can you not take the time to assess your potential exposure and address the financial implications and risk of noncompliance.