Welcome to the May 2017 issue of the Aprio State & Local Tax (SALT) Newsletter.
With dozens of different taxes imposed by the 50 states (and thousands of local jurisdictions), we recognize how challenging it is to keep up with current issues and developments. This newsletter is designed to provide insights on developments in state and local taxes including new legislation, regulations, rulings and cases addressing issues such as corporate and personal income taxes, sales and use taxes, nexus, franchise/net worth taxes, etc.
This issue of the newsletter includes articles addressing (i) cases in Massachusetts and Minnesota holding individuals personally liable for a company's unpaid sales taxes, (ii) state action in 2017 regarding economic nexus rules for sales tax, (iii) a New Jersey case treating the gain from the deemed sale of assets under IRC 338(h)(10) as allocable income, (iv) two Rhode Island rulings addressing the taxability of infrastructure as a service (IaaS) and an e-retailer's membership fees, and (v) two Georgia rulings explaining the taxability of video production services and sales of goods that are delivered to a third party in Georgia on behalf of an out-of-state customer.
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If you have any comments, questions or suggestions regarding current or future topics, or if you would like to learn more about Aprio's SALT Practice, please email us at jeff.glickman@aprio.com. Thank you.
Jeff Glickman, J.D., LL.M.
Partner-in-Charge, State & Local Tax Practice
Minnesota and Massachusetts Hold Individuals Personally Liable for Unpaid Sales Taxes
By Jess Johannesen, SALT manager
If a busines owner or officer has significant authority over payment of taxes and/or control of the company's financial operations, they can be held personally responsible for unpaid sales taxes.
In direct contravention of the Supreme Court's Quill decision, several states have passed legislation requiring remote sellers to collect and remit sales/use tax when they meet certain revenue and/or transaction thresholds.
New Jersey Decision on Sourcing of Gain May Present Opportunity for Out-of-State Companies
By Jeff Weinkle, SALT manager
New Jersey determined that gain from an asset sale and liquidation transaction constituted "non-operational" income, under which the income was entirely sourced to New Jersey instead of being apportioned across multiple states.
Rhode Island Provides Guidance on Taxability of Technology Services
By Tina Chunn, SALT senior manager
Rhode Island ruled that storage service, computing service and data transfer fees are not subject to sales tax because no software is licensed or downloaded.
Georgia Releases Sales Tax Rulings Addressing Taxability of Services and Sourcing Issues
By Alissa Graffius, SALT senior associate
Georgia ruled that custom video services weren't taxable, even when the video was delivered on a tangible medium, and that the sale of products received in Georgia by a third party on behalf of a customer located outside the state was subject to sales tax.
Aprio's State and Local Tax (SALT) practice advises clients on the state and local tax implications of their business operations, allowing clients to strategically minimize their liabilities and risks. Our team has over 50 years of combined SALT experience working in industry, state departments of revenue, public accounting and private law practice. We specialize in all areas of SALT, including matters related to state tax nexus, corporate and personal income taxes, sales/use tax, franchise/net worth taxes, credits and incentives, and mergers and acquisitions. In addition, we represent clients in administrative matters before state revenue departments around the country, including audit defense and settlement negotiations, pursuing voluntary disclosure agreements and obtaining letter rulings.
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