It has been reported that Britain's tax authority will introduce reverse value-added tax (VAT) charges relating to carbon emissions trading from November 1, 2010, replacing a zero tax rate implemented last year to prevent fraud.
The zero VAT rate was put in place in July 2009 as an interim measure to halt rapidly escalating carousel fraud in spot trading of European Union carbon permits, called EUAs, HMRC said.
The new reverse charge will also apply to sales of two types of Kyoto Protocol carbon offsets called Certified Emissions Reductions (CERs) and Emissions Reduction Units (ERUs).
HMRC had been awaiting an EU-wide directive to provide a reverse charge option, which was finally adopted by member states in March.
You can access the HMRC announcement at: http://www.hmrc.gov.uk/briefs/vat/brief3510.htm
It’s that time of the month again to take a look at the sales and use tax changes happening in September. This month there are only a few states with rate changes but we do have some Sales Tax Holidays to report. In August we had many states participate in Back To School Sales Tax Holidays. In September there are a few Sales Tax Holidays giving shoppers the ability to make certain purchases tax free.
Alabama
Pinson City – 2.0% sales and use (New Levy)
Creola City – 4.0% sales and use; Creola police jurisdiction – 2.0% sales and use
Douglas City – 3.0% sales tax only (effective 8/1/2010)
Elba City – 4.0% sales and use, 2.0% rental sales and use; Elba police jurisdiction – 2.0% sales and use;
Arizona
Florence City – 3.0% use tax and rental use tax only
Oklahoma
Haskell County – 1.5% sales and use
Sales Tax Holidays
Kenai Borough, Alaska
There will be an exemption for the Borough of Kenai, Alaska from sales tax on non-prepared food from 1 September 2010 to 31 May 2011. The city of Homer is participating in this holiday exemption. This Sales Tax Holiday does not apply to all food items sold by restaurants and restaurant type sellers and all prepared foods.
Wrangell, Alaska
On 11 September 2010, the city of Wrangell, Alaska will grant sellers the opportunity to participate in a Sales Tax Holiday. The Sales Tax Holiday will exempt purchases of all tangible personal property and services, excluding rentals.
West Virginia
West Virginia is having a Sales Tax Holiday from 1 September 2010 to 30 November 2010 on non-business purchases of Qualified Energy Star Products costing $5000 or less per item. The Sales Tax Holiday does not apply to business transactions in West Virginia. For business transactions, the full respective tax rates are applicable.
Stay tuned for the upcoming October sales and use tax changes next month. There are sure to be a lot more rate changes in October because we tend to see a high volume on the quarter months.
Alberta doesn't have a provincial sales tax or participate in the HST. Residents of Alberta may still find themselves paying HST when they ship items to provinces that do however. As many residents of Alberta are finding out, Revenue Canada requires that the tax be charged on services that include a bill of lading (That includes commercial parcels, Xpresspost and priority courier). This is not a new policy, but one that more people are starting to notice since Ontario and British Columbia adopted the harmonized sales tax this year according to Canada Post.
The rules are as follows according to Canada Post:
- Most Canada Post goods and services are subject to the Federal Goods and Services Tax (GST), and to the Provincial Sales Tax (PST or QST) or to the Harmonized Sales Tax (HST), where applicable.
- Effective July 1st, 2010, Canada Post goods and services will be subject to Ontario and British Columbia HST at the rate of 13% and 12%, respectively.
- There are certain items sold by Canada Post that are not taxable such as postal Money Orders, the fee on a Money Order and the exchange on a Money Order.
- Certain Provincial governments and their entities and certain Indian Bands and Natives are exempt from paying sales taxes.
For more information please visit the following links:
Canada Revenue AgencyCanada Post
The 2011 Massachusetts Budget Act contains an interesting provision for the state's retailers. It repeals the prohibition against advertising that the sales tax will assumed or absorbed by the retailer. Vendors are still required to separately state and collect the tax from their customers. Now however, vendors are allowed to offer a discount equal to the amount of the tax, and may also advertise the discount as a “store sponsored sales tax holiday”.
See:
Massachusetts Technical Information Release No. 10-11, 08/06/2010
The Pennsylvania DOR is making a list, checking it twice, and posting it on-line for the world to see. If your name is on the list chances are it won't be Santa Clause that comes to visit you this year.
Following up on their promise to get tough on tax dodgers once the amnesty program ended the Pennsylvania DOR has published a list of 39,000 tax liens against individuals and businesses. The list contains information about all tax liens filed since July 2009. By "naming names" the department hopes to shame the delinquents into paying what they owe.
The complete list is available on the Pennsylvania Revenue Department's website under the hot topics tab on the home page.
South Carolina wants to get their tax structure back on track. On June 24, 2009 the General Assembly passed Senate Bill 12 creating the "South Carolina Tax Realignment Commission", also known as TRAC. TRAC is tasked with evaluating the effectiveness of South Carolina's current tax structure and to make recommendations to the General Assembly regarding any changes they believe are necessary.
TRAC has released their draft report and it contains quite a few recommendations. Among them is a recommendation that the state adopt an Amazon type law that would allow the collection of tax from out-of-state Internet retailers based on their relationship with in-state affiliates.
The report also recommends the elimination of nearly $700 million in sales tax exemptions. Those proposed changes include:
1) a 2.5 percent sales tax on water, electricity, groceries and prescription drugs;
2) a 4.96 percent sales tax on Internet music downloads, wrapping paper, newspapers, prosthetic devices and extended warranties;
3) an eventual elimination of the sales tax cap on motor vehicles.
This is only a draft report, final recommendations are not expected until November.
The South Carolina Legislature has a website where you can track TRAC's activities:
www.scstatehouse.gov/citizensinterestpage/TRAC/TRAC.html
The City of Tulsa filed a four count civil suit against the state on Thursday August 19th regarding a law passed earlier this year requiring cities to use the Oklahoma Tax Commission to collect sales taxes. Tulsa is asking the judge to rule that the city has the right to use a private firm to collect its sales taxes. Prior to the bill being signed into law the city had contracted with a private firm in Alabama to collect their taxes. They claim that using the private firm could save their cash-strapped city millions of dollars.
To read more:
www.localnews8.com/money/24689979/detail.html
Ever wonder what's the probability of your business being audited this year? Join me, Carla Yrjanson, VP of Tax Research & Content at Sabrix Thomson Reuters, on August 26th for this 30 minute session. You will learn the top 10 ways you can trigger an audit in your business, common pitfalls auditors will catch, and 5 proactive tips for addressing an audit.
We will also share the results of an independent study highlighting the average cost of penalties & interest resulting from an audit.
REGISTER NOW!
August 26th 10AM PT (1PM ET)
On Monday the B.C. Supreme Court was asked to order that the HST agreement with the Federal Government be sent back to the provincial legislature for consideration. HST opponents claim that the province's deal with the federal government is unconstitutional "taxation without representation". Opposition to the HST has been strong in British Columbia and the HST opponents believe that the legislature would be unlikely to support HST given the strong voter feelings.
For more information:
ca.reuters.com/article/domesticNews/idCATRE67F4JL20100816 and
thetyee.ca/Blogs/TheHook/BC-Politics/2010/08/16/HSTDispute/
Soda Sin Tax: Effective 1 October 2010, soft drinks will be subject to DC’s 6 percent sales tax, as discussed in an earlier post. A “soft drink” is defined by the District of Columbia as any non-alcoholic beverage with natural or artificial sweeteners that does not contail milk or milk products, soy, rice or similar milk substitutes, fruit or vegetable juices (unless the beverage is carbonated), coffee, coffee substitutes, cocoa or tea; or that is not prepared for immediate consumption.
Amnesty: DC is currently hosting an amnesty program which began 2 August and will continue until 30 September. It include sales and use taxes, corporate income and unincorporated franchise taxes, withholding, individual taxes and gross receipts taxes. All penalties and fees will be waived if payment of tax and interest occurring prior to 31 December 2009 are paid within the amnesty period. Real property taxes and the ballpark fee are not eligible for the amnesty program. See more regarding the DC amnesty program here and amnesty programs for other states here.
Tax Lien Sale: The annual Tax Sale of more than 6,100 commercial and residential real property tax liens will begin 20 September. You must register for the sale. Registration begins 13 August and will go through the end of the sale. For more information and a list of available properties, go to the OTR.
Sources:
DC DOR Website and 2010 Sales Tax Law Changes, DC DOR 8/9/10.
Despite Governor Schwarzenegger's best efforts to terminate the idea, the California Legislature is once again considering an Amazon style Internet tax. The current proposal, brought up in a Senate hearing last week, would give sales tax nexus to out-of-state Internet retailers like Amazon.com and Overstock.com by virtue of their relationship with in-state affiliates.
The proposal is already getting the attention of web entrepreneurs and others who strongly oppose the revival of what they claim is a revenue and job killer rather than the budget fix that its proponents claim that it is.
OTR Notice 2010-07 ,issued on August 10th, reminds D.C. taxpayers about an important change to the District sales tax. Effective October 1, 2010 retail sales of soft drinks will be subject to the 6% sales tax. Soft drinks sold for immediate consumption will continue to be taxed at 10%.
Soft drinks are defined as any non-alcoholic beverage that contains natural or artificial sweeteners. Soft drinks do not contain milk or milk products, soy, rice or other milk substitutes, fruit or vegetable juice (unless carbonated), coffee, coffee substitutes, cocoa or tea.
In the UK, government ministers have advised professional representatives that they will make online filing of VAT returns compulsory for all businesses from 1 April 2012.
According to the reporting media, people who have a conscientious objection to using a computer will be able to continue filing paper returns and the CIOT has argued that some people with disabilities that prevent them using computers should also be exempted from the rule.
Obviously, there are a few issues to be finalized yet and I will keep you informed as the information becomes available.
Source:
www.accountingweb.co.uk/topic/tax/vat-online-filing-be-compulsory-2012/444085
As part of Wisconsin's membership in the Streamlined Sales and Use Tax Agreement Wisconsin has been offering a sales tax amnesty program for qualifying businesses that currently are not registered to collect and remit sales and use tax. The amnesty program went into effect on July 1, 2009 and is set to expire on September 30th. Businesses that meet the eligibility requirements and register for the program are not be required to remit Wisconsin sales and use tax on sales made prior to registering for the program.
For more information see:
www.streamlinedsalestax.org/index.php
California lawmakers are considering another tax swap. This time it would be a 1% increase in the income tax for 2010, while the state sales tax would be reduced by one and three quarters cents. Sacramento democrats claim the swap would help close the state's $19 billion dollar budget gap. The idea's proponents claim that it would also benefit the state in other ways. By deducting the higher state income taxes on their returns, they say that Californians would get back from the Federal Government the additional money they send to the state. That claim is strongly disputed by Governor Schwarzenegger's office however.
To Read More:
www.nbcbayarea.com/blogs/prop-zero/The-Great-Tax-Swap-99942614.html and
www.santamonicavotes.org/index.php
The British Columbia Elections Agency confirmed on Wednesday that 700,000 signatures on an anti-Harmonized Sales Tax petition meet the legal requirement to call for a new vote on the HST. The decision marks the first time a petition has been approved since B.C. passed the Recall and Initiative Act in 1995. The next step is for the agency to forward the petition and draft bill to repeal the law to the province’s legislature, which has 90 days to act. The legislature could choose to repeal the HST law themselves or to hold another referendum on the issue.
As discussewww.mass.gov/d in an
earlier post, Gov. Deval Patrick signed the legislation which included the enactment of a sales tax holiday occurring from 14 August to 15 August. Qualifying non-business purchases of $2,500 or less made during this time period will be exempt from the State’s 6.25 percent sales tax. For more information on the Sales Tax Holiday, visit the Massachusetts DOR
website here.
As discussed in an earlier post, New York has imposed some hefty cigarette taxes earlier this summer to help balance a $9.2 million budget deficit. However, some New York residents have found a loophole in paying the increased sales taxes. They are purchasing cigarettes from nearby Native American smoke shops, which do not impose taxes on cigarettes.
Proponents of the increase in the cigarette sales tax had hoped it would encourage smokers to quit. Time will tell if the overall number of NY smokers decreases in the long run. The New York Association of Convenience Stores noted a 25 to 35 percent decrease in cigarette sales in July, but those near tribal lands reported up to a 45 percent decrease. As such, it appears some have chosen to simply stop buying their cigarettes from NY vendors.
NY lawmakers are trying to close the tax-free Native American cigarette loophole. A new law which would be enacted on 1 September 2010 if passed would only allow Native American reservations to receive enough tax free cigarettes for their population, based on average cigarette use per person. Any cigarettes sold to non-Native Americans would be taxed and this would raise an estimated $150 million in extra sales tax revenue.
Source:
www.syracuse.com/news/index.ssf/2010/08/after_ny_tax_hikes_indian_shop.html
The CPA Technology Advisor - SUT product review for the August issue for Sabrix Thomson Reuters Managed Tax Service and Thomson Reuters ONESOURCE reviews. Read the
August 2010 article here.
In the wake of the Pennsylvania Sales Tax Amnesty program, which Governor Rendell calls 'an overwhelming success' Pennsylvania has announced that it is still willing to take money from any tax delinquents out there who didn't pay up when they had the chance to avoid paying penalties. (The Amnesty program waived all penalties plus half the interest owed.)During the amnesty program the state had suspended the voluntary disclosure program which is the usual avenue for delinquent taxpayers to come forward and pay their debts. As of August 1st that program is again available. In return for coming forward voluntarily taxpayers now taxpayers will be responsible for any taxes owed plus all the interest. A 5 percent non-participation penalty is also assessed.
For more information on the Voluntary Disclosure Program visit
www.revenue.state.pa.us.
For more information on the Amnesty Program see The
June/July 2010 Tax Update.
Powered by Compendium Blogware
