Retailers with locations in multiple states are faced with sales & use tax issues, which include capital expenditures, POS systems/reporting, and maintenance of internal reporting.
Grant Thornton is a thought leader in the arena of sales and use taxes and has been published in the various articles below:
The Washington Department of Revenue Appeals Division has determined that an out-of-state mail order retailer had substantial nexus and was subject to the Washington business and occupation (B&O) tax and sales tax, based on the activities of an affiliated corporation operating retail stores in the state. The affiliated corporation’s in-state activities that subjected the out-of-state retailer to the B&O tax and sales tax included free distribution of the retailer’s catalogs, provision of limited assistance to the out-of-state retailer’s customers regarding returns and sales of gift cards that could be redeemed for merchandise in the retailer’s catalogs.
Earlier this summer, District of Columbia Mayor Vincent Gray signed the Fiscal Year 2012 Budget Support Act of 2011 (Budget Support Act) and the Fiscal Year 2012 Budget Request Act of 2011 (Budget Request Act), both passed by the District City Council.
On September 23, 2011, California Governor Jerry Brown signed legislation that temporarily, and retroactively, repeals implementation of the sales and use tax affiliate nexus and “Amazon” legislation that was enacted on June 28, 2011. Prospective operation of the affiliate nexus and Amazon provisions depends on whether federal legislation is enacted and implemented by California that authorizes states to require a seller to collect taxes on sales of goods to in-state purchasers without regard to the seller’s location.
The Texas Legislature recently finished its 2011 special session to settle remaining fiscal matters to balance the state budget. Significant tax legislation was passed during the special session and signed into law by Governor Rick Perry on July 19, 2011. Texas has joined the growing list of states that will utilize an affiliate nexus rule for sales and use tax despite the governor previously vetoing affiliate nexus legislation that passed during the 2011 regular session.
Hawaii Governor Neil Abercrombie has signed legislation that suspends certain general excise and use tax exemptions for a period of two years, beginning July 1, 2011 and ending June 30, 2013. The legislation also subjects the previously exempt amounts to a 4 percent excise and use tax during the same two-year period.
The Illinois Supreme Court has reversed an Illinois Court of Appeals decision that would have voided revenue legislation enacted in 2009 for violating the single subject requirement. The disputed legislation included tax provisions such as a sales tax increase on candy, certain beverages, and grooming and hygiene products.
Connecticut Governor Dannel Malloy has signed legislation that makes several changes to the state’s nexus laws for both corporate business tax and sales and use tax purposes. In particular, the legislation now requires a company to meet both, instead of one, of the existing criteria to have economic nexus in Connecticut.
On June 28, 2011, California Governor Jerry Brown signed A.B. 28x, as part of a larger state budget package approved by lawmakers the same day for the 2011)2012 fiscal year that began on July 1.
Vermont has established remote seller notice requirements to be imposed on retailers that do not have sales and use tax nexus with the state but are selling tangible personal property, services or products transferred electronically for use in Vermont.
The letter ruling tries to clarify the intent of an amendment to an administrative rule on sales and use tax nexus, specifically the “use” of tangible personal property. The state is currently analyzing the treatment of types of digital content.
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