State and Local Tax 360˚

On September 17, 2009, the Supreme Court of Ohio ruled that collecting the state’s commercial activity tax (CAT) from grocers based on their gross receipts is not an unconstitutional “excise tax upon the sale or purchase of food.” According to the Court, the CAT is a tax on the privilege of doing business, not a direct tax on the items being sold.

Yesterday, the Commission on the 21st Century Economy released its final report and recommendations on ways to update and improve California’s revenue system and make it more reflective of the state’s economy. See the Press Release.

The Commission is recommending several significant "big" and "bold" changes to California's tax system with a five-year phase-in plan beginning in 2012.

According to a News Release by the Tax Foundation, the Foundation has filed a friend-of-the-court brief with the New York State Supreme Court's Appellate Division arguing that the state cannot legally compel Amazon.com, an out-of-state retailer, to collect sales taxes on purchases because the retailer does not have a physical presence in the state.

California has released a Special Notice alerting taxpayers to the new registration and reporting requirements for "qualified purchasers" to report and pay use tax directly to the Board of Equalization (BOE).

California Use Tax

According to a Minnesota Department of Revenue News Release, Minnesota has decided to end its income tax reciprocity program with Wisconsin, effective January 1, 2010. As a result, Minnesota residents who work in Wisconsin will be required to file returns in both states next year.