Welcome to the June 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) state sales tax audit methodologies in Alabama and New York when the taxpayer's records are unavailable or inadequate, (ii) federal legislation that would establish bright-line physical presence nexus requirements, (iii) a New York advisory opinion treating online video generation services as taxable prewritten software, (iv) an Ohio Board of Tax Appeals ruling that a baseball team could not purchase promotional items under the sale for resale exemption, and (v) a Washington excise tax advisory explaining the use tax rules for business property temporarily brought into and used in the state. In addition, we have provided a brief update on a Massachusetts directive establishing economic nexus for sales/use tax that was discussed in last month's SALT Newsletter.
In case you missed prior issues of this newsletter, please click here.
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
Alabama and New York Rule that Purchase Mark-Up Method Allowed for Sales Tax Audits without Adequate Sales Records
By Tina Chunn, SALT senior manager
If companies do not maintain adequate supporting records of their sales, they may be subjected to an alternative audit methodology which can produce an unfavorable outcome.
Congress Introduces Physical Presence Nexus Legislation
By Jeff Glickman, SALT partner
The No Regulation Without Representation Act of 2017 establishes that a state may only tax businesses engaged in interstate commerce based on physical presence and sets a bright-line 15-day threshold before specific activities create physical presence.
New York Rules that Online Video Creation is Taxable
By Alissa Graffius, SALT senior associate
Online video generating services were deemed prewritten computer software because customers had the right to direct the software's use and utilized the same underlying software, regardless of customization.
Ohio Rules that Cincinnati Reds Can't Purchase Promotional Items Using Resale Exemption
By Jess Johannesen, SALT manager
When goods are provided as part of a promotional giveaway that exacts no additional cost or consideration, a sale for resale exemption certificate may not be applicable.
Washington Advisory Explains Use Tax on Business Property Temporarily in State
By Jeff Weinkle, SALT manager
Washington imposes use tax on all taxable tangible property brought into Washington after its purchase, including property only temporarily in the state, such as construction equipment.
UPDATE: Massachusetts Revokes Directive 17-1 - Will Adopt Regulation Establishing Economic Nexus for Sales/Use Tax
By Jeff Glickman, SALT partner
On June 28, 2017, the Massachusetts Department of Revenue issued Directive 17-2, revoking Directive 17-1 and promising future regulation on the economic nexus rule.
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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