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.
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
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.
According to the media the Estonian government has approved the following draft amendments to the country’s VAT Act:
• VAT payers whose turnover does not exceed €200,000 would be entitled to use cash-basis VAT accounting; The amendment is based on EC Council decision 2009/1022 of December 15, 2009, which authorizes Estonia to apply a measure derogating from
article 167 of EU VAT Directive (2006/112/EC).
• For anti-evasion purposes, taxation by reverse charge would be extended to the
supply of waste metal and real estate.
• The special tax regime applicable to cross-border supplies of natural gas and
electricity via network would also be extended to heating and cooling energy. Under
the special tax regime, the place of supply of heating and cooling energy would be the
place where the customer is established. This amendment would implement changes
introduced to the EU VAT Directive by Council Directive 2009/162/EC.
If adopted, the amendments will enter into force on January 1, 2011.
The State of New York has just released an advisory opinion explaining the application of the sales tax to comic books, graphic novels and trade paperbacks.
Under New York sales tax law newspapers and periodicals are exempt from tax. Comic books that are published at least 4 times a year are exempt as periodicals...usually. However, if the comic book is sold at a price above its normal retail selling price it becomes "tangible personal property for collection or investment purposes" and looses its tax exempt status.
Graphic novels and trade paperbacks that are collections of a specific comic book series also do not qualify for the exemption either. The specific requirements for the exemption can be found in Section 1115(a)5 of the Tax Law.
The advisory opinion is available on the New York Department of Taxation's Website at:
www.tax.state.ny.us/pdf/advisory_opinions/sales/a10_35s.pdf
Under new guidelines written by the Georgia transportation planning director, if voters approve a 1 percent sales tax increase for 2012, then a portion of the increased sales tax revenue collected can go to fund Atlanta transportation. The tax, if passed, will reel in an estimated $5 billion over 10 years to fund a variety of transportation projects.
The guidelines have not been finalized. The Atlanta Regional Commission will help craft the final guidelines and is asking for public comment. Comments are being accepted until 2 September via opinion@atlantaregional.com. Visit the Georgia Department of Transportation for more information at dot.ga.gov.
Source:
www.ajc.com/news/georgia-politics-elections/atlanta-transportation-tax-could-594636.html
The South Carolina Department of Revenue has just hired 90 new full-time auditors and revenue agents to the tune of 5.5 million dollars.
The state is hoping that the auditor and agents who are now in training will be able to collect 100 million dollars of unpaid sales and other taxes. Last year the state did the same thing, spending $2.2 million to hire 60 additional collection agents hoping to collect $48 million in additional taxes. They collected $106 million. DOR spokeswoman Adrienne Fairwell believes that the job will be a little tougher this year. "This time around, it's going to be a little bit more difficult to collect because we feel as though we have collected on all of the low-hanging fruit," according to Fairwell.
Source:
http://www2.wspa.com/news/2010/aug/17/3/south-carolina-spending-millions-go-after-delinque-ar-717781/
As discussed in an earlier post, Oklahoma passed House Bill 2359 which prohibits the cities from collecting sales taxes and requiring them to use the Oklahoma Tax Commission (OTC) for collections. Before the law was passed, the city of Tulsa had been negotiating with the Alabama based company, Revenue Discovery Systems, to collect their taxes. The city says that using this company as opposed to the OTC, will save them millions of dollars.
In response to House Bill 2359’s passage, the city of Tulsa has filed a lawsuit against the state of Oklahoma stating that the new law is unconstitutional and that they have the right to use a private company to collect their taxes. The state has responded that since the law passed, the city of Tulsa no longer has a choice as to who they can use to collect their taxes.
It remains to be seen whether any other Oklahoma cities will join the fight. I will continue to monitor this law suit and post updates as they become available.
Source:
www.google.com/hostednews/ap/article/ALeqM5g1o3t7k6paf_5ZoX7_yKDXz6swDQD9HMO0S80
"No corporation wants to pay egregiously high fines or risk a government audit for violating sales tax laws. Outsourcing has become a good way to make sure someone knowledgeable is keeping up with the confusing welter of laws for companies doing business in more than one locale. Service providers also have the technology to calculate and monitor the tax faster and more accurately. "Day-to-day tax management is a non-strategic activity that diverts staff focus," says Patrick Grogan, Director of Marketing for Sabrix, which is part of Thomson Reuters Tax and Accounting."
Read the full article in the August 2010 Issue of Outsourcingcenter
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
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
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)
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
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.
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