According to the media an administrative court in Spain has nullified 5.1 billion EUR worth of VAT tax assessments sent out to taxpaying businesses from 2006 through 2008.
The 5.1 billion, EUR includes assessments and related penalties. Apparently, the agency based assessment on calendar years, when the law requires that it be done on a monthly or quarterly basis.
The 5.1 billion EUR will have to be returned to over 480,000 entities who were charged the tax. But the Treasury hopes to reassess using the required monthly and quarterly periods.
Businesses that don’t collect sales tax automatically are being asked to remind Oklahoma customers of their sales tax liability. Doing so is voluntary on the part of the business and the reminder applicable to catalogue purchases, according to the law.
The state hopes to generate an estimated $30 million as a result of the “reminders”. Participating businesses do not have to notify the state of the identities of their customers; the state is simply hoping that people will remit their sales tax if reminded that their purchases are not tax free even if the retailer is not collecting the tax.
Source:
newsok.com/state-law-targets-consumers-who-make-online-purchases/article/3489783
The state of Georgia has formed a task force called the "
Special Council on Tax Reform and Fairness for Georgians" to study the current tax system and make recommendations regarding changes they believe are needed. Some of the issues related to sales and use tax the Council will be considering include whether or not services should be taxable, whether or not some exemptions should be eliminated or others added, and the possibility of an affiliate nexus tax.
The Special Council's findings and recommendations for legislation are to be delivered to the Speaker of the House and the Lieutenant Governor no later than January 10, 2011.
For more information visit the Special Council's website: fiscalresearch.gsu.edu/taxcouncil/index.htm
As mentioned in an earlier post, New Yorkers seemingly had found a way around the hefty cigarette taxes by purchasing them on Indian Reservations. On 1 September 2010, Gov. Paterson hopes to end the loophole by way of a law requiring the reservations to collect sales tax on cigarettes sold to non-Indian customers.
However, the Seneca and Cayuga tribes are seeking a temporary injunction to prevent the collection of the tax. They state that forcing them to do so violates their sovereignty. Paterson indicated he wished to maintain the new policy, despite the reservation’s protests. Besides the injunction request, signs and flyers have been hung up around various reservations protesting the new law.
I will continue to monitor this matter and post updates as they become available.
Sources:
www.bizjournals.com/buffalo/stories/2010/08/30/daily4.html
www.wkbw.com/news/local/More-Protests-Against-Latest-Sales-Tax-Attempt-on-Reservations-101687013.html
www.publicbroadcasting.net/wned/news.newsmain/article/1/0/1693764/WNED-AM.970.NEWS/Judge.Reserves.Decision.on.Cigarette.Tax.Battle
In January of this year Washington State switched to a more tightly controlled reseller permit system hoping to collect additional sales tax revenue that was owed, but not being paid. Under the old system self-issued resale permits were used by many registered businesses. If they declared at the time of purchase that the tax would be paid when the product was resold to the final consumer they did not have to pay any sales tax. Many of those tax-free purchases were never resold however and the state estimated that it was losing up to $100 million dollars annually.
In a news release issued on August 30th the Department of Revenue announced that the new reseller permit program has already resulted in an estimated $24.4 million dollars in state and local taxes being paid by the construction industry alone. The department is currently reviewing other industry sectors to see if the program has been as successful there as well.
More information about the program is available on the Department of Revenue's website:
dor.wa.gov/content/home/
Beginning 1 September 2010, interest and penalties on unpaid tax liabilities occurring before 31 December 2008 will be waived if the unpaid liabilities are paid in full during the amnesty period. The amnesty period ends on 15 October 2010.
The amnesty program includes privilege taxes, estate taxes, income taxes, withholding taxes, estimated taxes, cigarette and tobacco taxes, retailer’s sales taxes, compensating use taxes, local sales and use taxes, liquor enforcement taxes, liquor drink taxes and mineral severance taxes. It is not available for any liabilities in audit, subject to administrative or judicial appeal, in bankruptcy or involved in a criminal investigation.
Source:
“2010 Legislative Enactments and Changes” from the Kansas Department of Revenue.
On 2 September 2010, the Greeley City Council is set to vote on a 0.75 percent sales and use tax increase. The extra sales tax revenue would be earmarked for road maintenance.
Additionally, the will vote on the continuation of the 3 percent food sales tax. The sales tax revenue from the food tax would be used for funding roads, public buildings and parks. The food tax won’t sunset until December 2011, but the Council hopes to have a better picture of its financial future and therefore placed it on the ballot early.
Source:
www.greeleytribune.com/article/20100831/NEWS/100839949/1002&parentprofile=1001
From 2 September 2010 to 5 September 2010, Louisiana will host its annual Second Amendment Weekend Sales Tax Holiday. During this time, qualifying purchases of firearms, ammunition and hunting supplies will be exempt from state and local sales and use taxes. The sales tax holiday only includes non-business purchases.
For a complete list of eligible items, please visit the LA DOR at http://revenue.louisiana.gov/sections/general/hottopics/secondamendment.aspx.
Beginning 1 September 2010, the state of West Virginia will exempt sales tax on qualifying non-business purchases of energy star products $5,000 or less per item. The sales tax holiday will run through 30 November 2010. This will be the last sales tax holiday of this kind for West Virginia, unless new legislation is introduced and approved. For more information, visit
http://www.wva.state.wv.us/wvtax/energyStarSalesTaxHoliday.aspx.
North Carolina recently offered 450 unregistered on-line retailers amnesty if they agreed to begin collecting the state's sales and use tax on internet sales. Few jumped on the offer to pay taxes that most don't believe they owe.
North Carolina disagrees with their opinion and has already started auditing some of the companies that scorned their amnesty offer. Beth Stevenson, a DOR spokesperson, said in a recent news story "We are going to prioratize our resources to conduct audits. If a company will not participate in the audit, we will issue summonses for the records needed to do the audit."
North Carolina's tough stance on collecting what they feel is owed to them is only the latest example of a state getting tough on tax collection. Undoubtedly we will continue to see more and more states taking an increasingly aggressive stance on tax collection.
Source:
www.localnews8.com/money/24773587/detail.html
Nevada Medical and Surgical Supply Company must pay $13,000 in back taxes. Earlier this month, the Nevada Tax Commission ruled that sales and use tax applies to the sales of wheelchairs and walkers.
The case, which has been appealed a couple of times, was first decided in favor of the State. A second judge ruled in favor of the company. A third ruling has again sided with the State, noting that the judge in the second instance cited an inapplicable law in his decision.
Source:
www.lasvegassun.com/news/2010/aug/09/state-sales-tax-must-be-paid-wheelchair-purchases/
An Arizona Krispy Kreme franchise had argued in a lawsuit that they were not subject to state sales tax, as their products should be treated under the same guidelines as a grocery items, which are exempt from sales tax. They argued that since the vast majority of their customers don’t eat the donuts on the premises, they are in effect, like a grocery store and should not be subject to sales tax. The company wanted a refund of $2.3 million for taxes paid during 1 June 1999 and 30 April 2004.
The court rejected their suit, stating that the company provides tables and chairs and does not ask customers whether they intend to eat their donuts at the restaurant. As such, the company will not receive its requested refund.
Source:
verdenews.com/main.asp
New York has issued a summary of changes to state taxes enacted as part of the fiscal year 2010-11 Budget Bill (L. 2010, A9710 (c. 57). Sales and use tax changes discussed include the temporary suspension of the state sales and use tax exemption for clothing and footwear priced under $110 per item and the narrowed definition of a sales tax vendor. The definition of a vendor for sales tax purposes now excludes certain activities of in-state affiliates performed on behalf of an out-of-state seller from the list of activities that would make that seller a vendor for sales tax purposes. Under the new law activities of an affiliate in providing accounting or legal services or advice to a seller, or in directing the activities of a seller, including but not limited to, making decisions about strategic planning, marketing, inventory, staffing, distribution, or cash management, do not make the seller a vendor for sales tax purposes.
For more information:
TSB-M-10(12)(S), August 19, 2010:
www.tax.state.ny.us/pdf/memos/sales/m10_12s.pdfSummary of Tax Provisions in SFY 2010-11:
www.tax.state.ny.us/pdf/stats/sumprovisions/summary_of_2010_11_tax_provisions.pdf
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