Highlights of Recent State and Local Tax Developments
While I was on vacation last week, several state and local tax developments occurred that I want to highlight. I am planning on going into greater detail on several of these in future posts, but thought I would provide you with a brief list now, due to the time sensitivity of some of the items:
- Minnesota taxpayers with undisclosed offshore accounts. Minnesota has created a voluntary disclosure program for undisclosed offshore accounts running from July 1, 2010 to October 29, 2010.
- Companies with employee withholding requirements in Minnesota. Minnesota issued a new withholding form (W-4MN) along with specific criteria for when it is required.
- Online Retailers. Federal Legislation was introduced which would impact state and local sales and use tax requirements for online retailers. The Main Street Fairness Act would bring outlying states into compliance with the voluntary Streamlined Sales and Use Tax Agreement (SSUTA) by backing the accord with congressional authority. The bill does not compel any state to join, but those that choose to adopt this system would then have the authority to require online retailers to collect and remit sales taxes the same way that businesses on local Main Streets do now.
- Retailers without nexus in Colorado, but selling into Colorado. The Direct Marketing Association filed a lawsuit against Colorado’s notification requirements (HB1193) alleging the requirements to be unconstitutional.
- Retailers without nexus in Colorado, but selling into Colorado. Colorado issued final regulations on the out-of-state notification, reporting requirements for non-collecting retailers. The final regulations do have some changes from the preliminary regulations/emergency regulations issued earlier this year.
- Retailers without nexus in Oklahoma, but selling into Oklahoma. Oklahoma has issued proposed emergency regulations to implement their notification requirements for out of state Internet retailers.
- Taxpayers with unresolved Nevada tax liabilities. Nevada’s tax amnesty program began July 1st and runs to September 30, 2010.
- Taxpayers with unresolved Florida tax liabilities. Florida’s tax amnesty program began July 1st and runs to September 30, 2010.
- Taxpayers with property, payroll, sales or customers in Washington. Beginning June 1st, Washington has an “economic nexus” standard for Business and Occupation (B&O) Tax purposes. Meaning, you don’t have to have a physical presence in Washington to have nexus. In addition, Washington now has a single sales apportionment factor. Service providers determine their sales factor by treating sales as Washington sales if the benefit of the service was derived in Washington. Previously, service providers allocated their sales to Washington based on costs of performance.
Please contact me at firstname.lastname@example.org if you would like additional information on any of the above items.
Brian Strahle is the owner of LEVERAGE SALT, LLC where he provides state and local tax technical services to accounting firms, law firms and tax research organizations across the United States. He also writes a weekly column in Tax Analysts State Tax Notes entitled, "The SALT Effect." For more info, visit his website: www.leveragestateandlocaltax.com
You can reach Brian at email@example.com.
Because state and local taxes are deceptively simple and endlessly complicated.