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The SALT Report
State and local tax news, brought to you by Zaldivar, Sattar and Associates.
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SALT Report 1391 - The following counties, Buncombe, Durham, Montgomery, and Orange, have levied an additional 0.25% local sales and use tax effective April 1, 2012. The additional tax will apply to sales and purchases of tangible personal property, certain digital property, and all transactions subject to the general state sales and use tax. However, sales of food subject to the 2% rate will not be subject to the 0.25% local sales and use tax increase.
Combined State and Local Rates
Effective April 1, 2012, the general state and local rate will be 7% in Alexander, Buncombe, Cabarrus, Catawba, Cumberland, Duplin, Durham, Halifax, Haywood, Hertford, Lee, Martin, Montgomery, New Hanover, Onslow, Orange, Pitt, Randolph, Robeson, Rowan, Sampson, Surry and Wilkes Counties; 7.25% in Mecklenburg County; and 6.75% in all remaining counties.
Leases and Rentals
The gross receipts derived from the lease or rental of tangible personal property and certain digital property sourced to Buncombe, Durham, Montgomery, and Orange Counties are subject to the 7% general state and local rate. The gross receipts derived from the lease or rental of tangible personal property or certain digital property sourced to Buncombe, Durham, Montgomery, and Orange Counties on or after April 1, 2012, are subject to the 7% general State and local tax rate.
Construction Contracts
Construction materials purchased by a contractor or subcontractor in conjunction with a lump-sum or unit-price contract in Buncombe, Durham, Montgomery, or Orange County that were entered into or awarded to a general contractor on or after April 1, 2012, will be subject to the 2.25% local tax rate plus the 4.75% state sales and use tax rate.
Form E-589D, Affidavit to Exempt Contractors from the .25% County Sales and Use Tax, should be issued to a retailer by a contractor or subcontractor to purchase construction materials on or after April 1, 2012. For purchases of construction materials by a subcontractor for use in a contract entered into or awarded before April 1, 2012 should obtain written documentation from the general contractor and attach a copy to Form E-589D.
Cash Basis
A retailer who reports and pays sales and use tax on the cash basis of accounting is liable for remitting the 2.00% local tax rate on collections received on or after April 1, 2012 for sales sourced to Buncombe, Durham, Montgomery, or Orange County prior to April 1, 2012. A retailer must separately account for money received on or after April 1, 2012 in order to remit the proper tax to the Department. If a retailer is unable to separately account for money received on or after April 1, 2012 for transactions sourced to Buncombe, Durham, Montgomery, or Orange County before April 1, 2012, the retailer will be liable for remitting the 2.25% local tax rate on all collections received on or after April 1, 2012.
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SALT Report 1390 - The 2012 taxable value for refinery gas for Louisiana sales and use tax purposes has been set at $1.797 per thousand cubic feet. This price is the maximum value that can be set for refinery gas by state and local authorities.
State law provides that the taxable value for refinery gas is computed by multiplying 52 cents per thousand cubic feet by a fraction of the posted price for a barrel of West Texas Intermediate Crude Oil on December 1 of the preceding calendar year. The formula is as follows - $0.52 x ($100.20 ÷ $29.00) = $1.797 per MCF.
Prior to July 11, 2005, refinery gas that was sold, exchanged, or bartered, rather than used by the producer, was subject to a different rate of sales tax. However, Act 458 changed the definition of “sales price” for refinery gas to be the same as the “cost price” for use tax purpose.
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SALT Report 1389 - The Colorado Department of Revenue released updated guidance regarding Sales Tax, Consumer Use Tax, Retailer’s Use Tax, and the International Fuel Tax Agreement. The publication also provides information about filing returns and annual reconciliations, and closing your tax accounts using Revenue Online.
Sales Tax
A sales tax account is established by applying online or on paper with a Sales Tax Withholding Account Application CR 0100. The fee for a two-year license is $16, plus a one-time-only $50 deposit. The deposit is automatically refunded to the business after $50 in state sales tax has been remitted to the department.
A sales tax return DR 0100 must be filed for each business location. You can file your return with Revenue Online, or by using the DR 0100 paper return. A return must be filed for each period that the account or business location is open even if there is no tax to report. If there are no taxable sales during a filing period, a zero return should be filed. Failure to file a return will result in a reminder to file. The reminder will be mailed one month after the return’s due date, which will be followed a month later by an estimated bill. The collection process will continue on this bill until the return is filed or the account is closed.
Consumer Use Tax
Consumer use tax must be paid by Colorado residents and businesses on all purchases that did not include Colorado sales tax, such as those made over the Internet, by mail order, or by telephone. If there were no purchases during the year that are subject to consumer use tax, there is no requirement to file a return or notify the department.
Retailer’s Use Tax
A return must be filed for any tax period during which the retailer’s use tax account is open. If there are no taxable sales during a filing period, a zero return must be filed. Failure to file a required return will result in a non-filer notice that will be mailed approximately one month after the due date of the return, which will be followed a month later by an estimated bill. The collection process will continue on this bill until the return is filed or the account is closed.
International Fuel Tax Agreement
IFTA quarterly returns are due at the end of the month following the end of the quarter. For example: A January through March return is due April 30. A tax return is required even if a truck is not operated during a quarter. Penalties and interest will be added if the tax return or payment is not postmarked by the due date. Failure to file a required return will result in a reminder to file that will be mailed approximately one month after the due date of the return, which will be followed a month later by an estimated bill. The collection process will continue on this bill until the return is filed or the account is closed.
To notify the department of a closure, the Change or Closure Form DR 1102 should be submitted along with any returns that are due for prior periods as well as the taxpayer’s IFTA license and decals. If the taxpayer does not return their license and decals, returns are due until the IFTA license expires at the end of the year. Once notified, the department will close that location account and returns will no longer be required for the closed location.
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SALT Report 1388 - The Missouri Department of Revenue determined that a mining company’s purchases of fire extinguishers are not exempt from sales and use tax under §144.054 RSMo which provides an exemption for purchases of, “electrical energy and gas, whether natural, artificial, or propane, water, coal, and energy sources, chemicals, machinery, equipment, and materials used or consumed in the manufacturing, processing, compounding, mining, or producing of any product…”
Federal law requires the Taxpayer to have fire extinguishers located within the facility for the safety of the workers and to provide protection for the facility. However, the fire extinguishers are not used or consumed by the Taxpayer in the mining of any product. Therefore, the Taxpayer’s purchases of fire extinguishers do not qualify for the exemption provided under Section 144.054, RSMo, and are subject to tax.
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SALT Report 1387 - Legislation was introduced in the Vermont House of Representatives that adopts language similar to California’s recently enacted A.B. 155, the taxation of online retailers. If enacted, Vermont’s bill would change the definition of “vendor” by removing the click-through nexus provision enacted in Act 45 (H.B. 436), and adding click-through nexus and affiliate nexus provisions, similar to those enacted in California. In addition, the remote-seller notice requirements enacted in Act 45 would be repealed effective July 1, 2012.
Provisions That Would Take Effect on July 1, 2012
- Any person maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary or agent, an office, place of distribution, sales or sample room or place, warehouse or storage place, or other place of business;
- Any person having any representative, agent, salesperson, canvasser, independent contractor, or solicitor operating in Vermont under the authority of the retailer or its subsidiary for the purpose of selling, delivering, installing, assembling, or the taking of orders for any tangible personal property;
- Any person deriving rentals from a lease of tangible personal property situated in this state; and
- Any person soliciting orders for tangible personal property by mail if the solicitations are substantial and recurring and if the retailer benefits from any banking, financing, debt collection, telecommunication, or marketing activities occurring in Vermont or benefits from the location in Vermont of authorized installation, servicing, or repair facilities. This shall become operative upon the enactment of any congressional act that authorizes states to impose the collection of state sales and use taxes by out-of-state retailers.
Provisions That Would Take Effect in 2013
- The definition of “vendor” would be amended in 2013 to include any person that has substantial nexus with Vermont and a retailer, upon whom federal law permits to impose a use tax collection duty, and any of the following:
- Any person maintaining, occupying, or using, permanently or temporarily, directly or indirectly, or through a subsidiary or agent, an office, place of distribution, sales or sample room or place, warehouse or storage place, or other place of business;
- Any person having any representative, agent, salesperson, canvasser, independent contractor, or solicitor operating in Vermont for the purpose of selling, delivering, installing, assembling, or the taking of orders for any tangible personal property;
- Any person deriving rentals from a lease of tangible personal property in Vermont;
- Any person that is a member of a commonly controlled group that includes another member of the retailer's commonly controlled group that, has an agreement with the retailer, performs services in Vermont in connection with tangible personal property to be sold by the retailer, including design and development of tangible personal property sold by the retailer, or the solicitation of sales of tangible personal property on behalf of the retailer; and
- Any person entering into an agreement or agreements under which another person or persons in Vermont, for a commission or other consideration, directly or indirectly refers potential purchasers to the retailer, whether by an Internet-based link or an Internet website, or otherwise, provided that both of the following conditions are met:
(1) The total cumulative sales price from all of the vendor's sales within the preceding 12 months and sold to purchasers in Vermont is in excess of $10,000, and
(2) The vendor, within the preceding 12 months, has total cumulative sales to purchasers in Vermont in excess of $1 million.
This provision would not apply if the vendor can demonstrate that the person in Vermont with whom the vendor has an agreement did not engage in referrals in the state on behalf of the retailer. Also, certain agreements related to advertising would not qualify a person as a “vendor” under this provision.
If enacted, these provisions would become effective as follows:
If federal law authorizing the states to require a seller to collect taxes on sales of goods to in-state purchasers without regard to the location of the seller is not enacted on or before July 31, 2012, the above provisions would become operative on January 1, 2013, and the definition of “vendor” effective July 1, 2012, would be repealed on January 1, 2013; or
If federal law authorizing the states to require a seller to collect taxes on sales of goods to in-state purchasers without regard to the location of the seller is enacted on or before July 31, 2012, these provisions would become operative on September 1, 2013, and the definition of “vendor” effective July 1, 2012, would be repealed on September 1, 2013.
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SALT Report 1386 - The Missouri Department of Revenue ruled that an online consignment company that sells items through its website are taxable. The items for sale are stored at the company’s place of business or in a storage facility located in Missouri. Once an item is sold, it is either shipped to the buyer’s location or picked up by the buyer.
Section 144.020.1, RSMo imposes sales tax “upon all sellers for the privilege of engaging in the business of selling tangible personal property or rendering taxable service at retail in this state.” And, Missouri Code of State Regulations 12 CSR 10-113.200(1) provides that the, “sale of tangible personal property is subject to sales tax if title to or ownership of the property transfers in Missouri . . .”
The Department determined that the taxpayer is selling tangible personal property and that title for items shipped to a Missouri location transfers when the items are delivered. If a buyer picks up an item at a Missouri location, transfer of title occurs at the location where the item is picked up. Therefore, the taxpayer’s sales are subject to Missouri sales tax.
Additionally, the local sales tax rate for the company’s business location applies to sales of items shipped to or picked up in Missouri. Since the company auctions its items through their website that is based in Missouri and the initial order is placed through a Missouri location, the local tax rate at the company’s location will apply to all sales shipped to or picked up in Missouri.
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SALT Report 1385 – The Missouri Department of Revenue ruled that sales made by an out-of-state company who provides video monitoring equipment and networking services to health care facilities are not taxable.
The company leases equipment to health care facilities and provides them with two service options. The first option is a basic service package that simplifies patient monitoring. The company installs cameras in a patient’s room that transmits video to the nurses’ station where the nurses can view several patients on one monitor. The video is recorded, saved and owned by the health care facility.
The second option offers additional services provided through the company’s network. This service allows patients to search the internet, watch medical education videos, order meal service, video chat, and watch pay-per-view movies on the television. This option is available for an additional fee.
The company paid sales tax on the purchase price of the equipment leased to its customers. Therefore, the monthly fee charged by the company for its basic networking service is not subject to tax. Also, the monthly price charged by the company for the optional patient networking service and equipment lease are not subject to sales tax under §144.020.1 (8) RSMo which states that:
“If the lessor or renter of any tangible personal property had previously purchased the property under the conditions of “sale at retail” or leased or rented the property and the tax was paid at the time of purchase, lease or rental, the lessor, sublessor, renter or subrenter shall not apply or collect the tax on the subsequent lease, sublease, rental or subrental receipts from that property” and, MCSR 12 CSR 10-108.700(3)(A)(1), further explains, “If the lessor pays tax on the purchase price, the subsequent lease of the tangible personal property is not subject to tax.”
Additionally, since the company’s installation and training fee is separately stated from the network service and equipment rental the Department determined that they are not subject to tax.
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SALT Report 1384 - A bill has been introduced in the New Mexico Senate that would remove the gross receipts and compensating use tax exclusion for certain out-of-state retailers that maintain content on a computer in New Mexico.
The amended bill reads as follows:
The definition of engaging in business as used in the Gross Receipts and Compensating Tax Act, means carrying on or causing to be carried on any activity with the purpose of direct or indirect benefit, except that:
- Engaging in business does not include having a worldwide web site as a third-party content provider on a computer physically located in New Mexico but owned by another non-affiliated person; and
- Engaging in business excludes using a non-affiliated third-party call center to accept and process telephone or electronic orders of tangible personal property or licenses primarily from non-New Mexico buyers, which orders are forwarded to a location outside New Mexico for filling, or to provide services primarily to non-New Mexico customers. Section 7-9-7.1 NMSA 1978 is repealed.
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SALT Report 1383 -The Minnesota Department of Revenue announced plans to enhance the features in their e-Services system. The system allows tax payers to file returns, pay taxes, and manage their accounts online. The Department of Revenue recently moved all business taxpayers to the e-Services system and the upcoming enhancements are based on their feedback. The enhancements will come in two stages.
Enhancements expected to be implemented on February 1, 2012, include:
- Easier confirmation requests and a “printer-friendly” button on the request confirmation page.
- Confirmation of canceled payments - If you decide to cancel a payment that you've made through e-Services, you'll now get a confirmation page after making the request.
- The “update my balance” notification will only appear when necessary. This button reflects balances shown in e-Services and only appears when you are attempting to make a delinquent payment.
- Duplicate payment alert - A message will notify taxpayers when they're making a duplicate payment, for a return with the same payment amount, tax period and date. The payment amount box will turn red, and you'll see the alert when you hover over the box.
Enhancements expected to be implemented on February 13, 2012, include:
- Faster data entry for W-2 information and consolidated sales tax returns
- One-click field selection - No more double-clicking to select a field or enter information
- A calendar icon will be added for easy selection of filing and payment dates
- A hyperlink will be added to the confirmation pages to return you directly to the “requests” tab in e-Services. Instead of printing the confirmation page for all of your requests, you can click the hyperlink to view a complete list in the “requests” tab.
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SALT Report 1382 - In the latest edition of the Tax Update newsletter the Pennsylvania Department of Revenue discusses several topics relating to sales and use taxes including:
Bureau of Audits Offering Penalty Abatement
Taxpayers who cooperate with the Department of Revenue throughout the audit process and meet the same standards used by the Board of Appeals for penalty abatement will now have the opportunity to have their penalties abated at the audit level. This new process is designed to provide a faster, more efficient method of abating penalties, saving taxpayers the time and expense associated with filing an appeal at the assessment phase.
The Bureau of Audits will consider penalty abatement for eligible taxpayers who have received audit engagement letters on or after December 1, 2011. Individuals and businesses meeting the requirements will receive a penalty petition form from Audit staff near the conclusion of the audit.
The new penalty abatement procedures at the audit level will in no way limit or reduce a taxpayer’s right to appeal an audit assessment.
E-Hotline
The Department of Revenue encourages tax practitioners to utilize its email system for all tax-related questions and information. This allows Department of Revenue agents to address electronically submitted inquiries in a more timely and efficient manner. Using the secure e-hotline, tax practitioners can submit questions without the risk of compromising taxpayer confidentiality.
Sales Tax Exclusions
The commonwealth’s sales and use tax laws provide an exclusion from sales and use tax for tangible personal property and services used in a mining operation. Extracting natural gas qualifies as mining for sales and use tax purposes. Property such as drilling equipment is considered directly used in a natural gas extraction operation. The mining exclusion may only be claimed by a purchaser who uses or consumes the property directly in a mining operation.
Corporate Tax Coupons
The Department of Revenue is no longer mailing REV-857-I coupon packets or specialty tax coupons, forms and instructions. Coupons and forms are still available on the state’s website.
The newsletter also contains a due date reference guides for a variety of taxes.
For Further Information:
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SALT Report 1381 - The Pennsylvania Department of Revenue has extended the deadline that requires remote sellers with a physical presence in Pennsylvania to become licensed and begin collecting sales tax until September 1, 2012.
Businesses with Pennsylvania nexus that do not register and collect tax by the deadline will face a variety of enforcement options, such as assessments, audits, liens, or a referral to the Attorney General’s office or a collection agency.
In December the department issued Tax Bulletin 2011-01 that explains the existing sales tax nexus law for remote sellers and clarifies the department’s authority to require e-commerce and out-of-state sellers to collect sales tax. The bulletin provides examples of in-state activities that the department deems sufficient to require sales tax registration and collection. These activities include, but are not limited to:
- A remote seller stores its property or the property of a representative at a distribution or fulfillment center located in Pennsylvania. This applies regardless of whether the center also stores the property of third parties distributed from the same location.
- A remote seller has a contract with an entity or individual physically located in Pennsylvania and whose website has a link that encourages purchasers to place orders with the remote sellers and the in-state entity or individual receives consideration for the relationship with the remote seller.
- A remote seller utilizes affiliates, agents and/or independent contractors located in Pennsylvania who provide repair, delivery or other services relating to the tangible personal property sold by the remote seller to Pennsylvania customers.
- A remote seller’s affiliates, agents and/or independent contractors provide service within the Commonwealth, including, but not limited to storage, delivery, marketing, or solicitation of sales, that benefit, support and/or complement the remote seller’s business activity.
- A remote seller has employees who regularly travel to Pennsylvania for any purpose related to the remote seller’s business activity.
- A remote seller accepts orders that are directly shipped to Pennsylvania customers from a Pennsylvania facility which is operated by the remote seller’s affiliate, agent or independent contractor.
- A remote seller regularly solicits orders from Pennsylvania customers via the website of an entity or individual physically located in Pennsylvania, such as an internet link.
Companies with questions regarding sales tax registration, collection and reporting requirements are encouraged to call the business tax Taxpayer Service and Information Center at 717-787-1064.
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SALT Report 1380 - The South Carolina Department of Revenue reminds business owners that if they buy tangible personal property from out-of-state and bring it into South Carolina, they are responsible for paying a 6% use tax.
The Department offers three options for businesses to pay their Use Tax obligations:
- Pay the tax online through the Department of Revenue’s Electronic Payment System. The DOR-ePAY system is designed to give taxpayers a fast, free, and secure way to submit tax payments. A username and password is required.
- Report and remit the Use Tax by completing form UT-3/UT-3W, the Use Tax Payment Return and Worksheet, and mailing it to the SC Department of Revenue, or
- Report and remit the Use Tax on the South Carolina Individual Income Tax Return Form SC 1040
Businesses that regularly make non-taxed purchases from out of state must report and pay the use tax on their monthly sales and use tax return. If a business has a use tax registration or a retail sales tax license they must continue to file their returns using E Sales.
A use tax credit will be allowed for sales tax paid and due in another state, if the other state has similar reciprocity with South Carolina.
For Further Information:
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SALT Report 1379 - Legislation was introduced in the Washington Senate that repeals the destination-based sourcing guidelines that the state adopted in order to conform to the Streamlined Sales and Use Tax Agreement. These changes will take effect January 1, 2014 unless congress enacts legislation requiring remote sellers to collect tax from states in which they sell, but do not have a physical presence.
If enacted, the bill would be amended to reflect the following:
- A retail sale consisting exclusively of the sale of tangible personal property is deemed to have occurred at the retail outlet at, or where, delivery is made to the consumer
- A retail sale consisting of the performance of personal, business, or professional services is deemed to have occurred at the place where such services are primarily performed
- A retail sale consisting of the rental of tangible personal property is deemed to have occurred (1) in the case of a rental involving periodic payments, at the place of primary use by the lessee during the period covered by each payment, or (2) in all other cases, at the place first used by the lessee
- A retail sale of taxable personal property to be installed by the seller is deemed to have occurred at the place where the labor and services involved will be performed
- A retail sale consisting of an extended warranty is deemed to have occurred at the business location of the seller if the extended warranty is received by the purchaser at that location. If an extended warranty is not received by the purchaser at the seller’s business location, a retail sale of an extended warranty is deemed to have occurred where the buyer receives their property.
In addition, the following acts or parts of acts would be repealed:
RCW 82.14.490 Sourcing - Sales and use taxes and 2007 c 6 s 503
RCW 82.14.495 Streamlined sales and use tax mitigation account - Creation and 2010 1st sp.s. c 37 s 952, 2009 c 4 s 907, & 2007 c 6 s 902
RCW 82.14.500 Streamlined sales and use tax mitigation account - Funding - Determination of losses and 2011 1st sp.s. c 50 s 974 & 2007 c 6 s 903
RCW 82.32.730 Sourcing - Streamlined sales and use tax agreement and 2010 c 106 s 229
RCW 82.32.755 - Sourcing compliance - Taxpayer relief -Interest and penalties--Streamlined sales and use tax agreement and 2007 c 6 s 1601
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SALT Report 1378 - The Virginia Department of Taxation ruled that the industrial processing exemption provided under Va. Code §58.1-609.3(2) does not apply to machinery and equipment, which includes a grinder, front-end loader, excavator, and a truck, used by a taxpayer to grind wood chips at job sites in order to transport the wood chips to the taxpayer's mulch yard.
The department held that the manufacturing and processing exemption is limited to production activities conduced at a single location. Therefore, the department's policy that mobile or portable equipment used for transporting product from temporary sites does not qualify for the industrial processing exemption. The department also ruled that the wood chipping and grinding activities conducted by the taxpayer did not qualify for the forest products harvesting exemption under Va. Code §58.1-609.2(6).
The forest products harvesting exemption is limited to items that are used to harvest forest products and to operations that are necessary to four specific activities listed in the statute. Based on a review of the four activities, the department found that wood chipping and grinding was not a necessary operation because:
- The products could be removed from the harvesting site without first grinding or chipping the harvested product
- Grinding and chipping is not an environmental protection or safety requirement
- The grinding and chipping activities are not necessary to access the harvesting site, as this activity occurs after access to the site has been created
- It is not necessary to grind or chip trees prior to their transport, and
- The machinery and equipment used for grinding and chipping are not directly used to harvest forest products
However, the department determined that the industrial processing exemption may apply to the use of a front-end loader and a screen drum if the taxpayer could demonstrate that the equipment was used more than 50% of the time in exempt industrial processing activities.
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SALT Report 1377 - The Kentucky Department of Revenue has released a Look Up Table that provides help when calculating the 6% use tax owed on purchases made from out-of-state retailers. The Look-Up Table provides an option to report estimated use tax that is owed for all retail purchases. The table is based on the reported Kentucky adjusted gross income and may be used when receipts are not available to calculate the actual unpaid use tax liability.
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SALT Report 1376 –The latest issue of the Arkansas State Revenue Tax Quarterly Newsletter discusses the sales tax exemption for new and used farm machinery and equipment. Arkansas Code Ann. §26-52-403 provides an exemption from sales tax for new and used farm machinery and equipment. The exemption only applies to purchasers that are engaged in the business of commercial farming.
For the purchase to be exempt, the taxpayer must certify that the purchased machinery will be:
- Used exclusively in the agricultural production of food or fiber as a retail business, and
- Used directly in the actual agricultural production of food or fiber to be sold in processed form or otherwise at retail, or
- Used directly in the agricultural production of farm products to be fed to livestock or poultry and will be sold in its processed form at retail. If the purchaser is not selling farm products produced in the course of an ongoing farming business, the purchaser is not entitled to this exemption.
The following are examples of nonexempt items:
- A machine used at a location other than the farming property
- A machine used for any activity other than commercial farming, even while at the commercial farm
- A machine used to produce food or fiber primarily for the commercial farmer's own consumption
- Attachments to and accessories not essential to the operation of the implement itself, except when sold as part of an assembled unit
- Repair labor and repair parts, and
The purchaser must certify in writing that he is engaged in the business of commercial farming and that the farm machinery and the equipment will be used only in commercial farming. Additionally, the seller must certify to the Arkansas Department of Finance and Administration that the contract price of the item(s) has been reduced to grant the full benefit of the exemption.
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SALT Report 1375 - The latest issue of the Wisconsin Sales and Use Tax Report provides information regarding recent changes to sales and use tax law and other pertinent sales and use tax information.
Advertising and Promotional Direct Mail
A seller of advertising and promotional direct mail must collect Wisconsin sales and use tax based on the location of where the direct mail was shipped, unless:
- The purchaser gives an exemption certificate stating direct mail. In this case the seller will collect no Wisconsin sales or use tax and the purchaser is responsible for remitting Wisconsin state, county and stadium use tax based on the recipient's tax jurisdiction.
- The purchaser provides each recipient's tax jurisdiction information.
In most cases the seller will collect Wisconsin, state, county and stadium tax based on the recipient's tax jurisdiction. However, if a recipients' address is provided as jurisdiction information but the information is insufficient to determine the recipient’s county, the seller should collect and remit state tax on sales of advertising and promotional direct mail and should collect and remit county and stadium taxes based on the county where the advertising and promotional direct mail was shipped.
Remote Deposit Capture Services
Remote deposit capture services provided by a financial institution are not subject to Wisconsin sales and use tax. RCDS is the electronic capturing of a check image at a remote location for deposit into an account at a financial institution. Merchants using an RDCS scan checks at their location and then send the scanned images to the financial institution for posting and clearing. The service is usually provided for a monthly fee.
Merchants must purchase a scanner and prewritten computer software from the financial institution in order to receive the RCDS service. The transaction is considered the sale of a nontaxable service since the scanner and prewritten computer software are furnished to the customer incidental to the service. Therefore, the monthly charges by the financial institution for the use of the scanner, prewritten computer software, and system support, as well as per-item check charges and per-deposit charges, are generally not taxable.
In most cases, the financial institution’s purchase of the scanners and prewritten computer software that it provides to its customers is subject to tax as well as its charges for the use of equipment and software if the charge is separate from the RDCS and optional. In certain situations, the financial institution may purchase the equipment and software tax-free for resale.
Rental Car Fuel Charges
Separate and optional charges for motor vehicle fuel by a rental car company are not subject to Wisconsin sales and use tax, provided that the proper excise taxes were paid by the rental car company to the motor vehicle fuel supplier. In addition, a separate and optional flat fee charged to a customer who prepays for a full tank of gas so the customer does not have to fill the car’s gas tank upon return is not taxable.
Sales Tax Articles Updated:
- Sales of used motor vehicles, boats, snowmobiles, recreational vehicles, trailers, semitrailers, all-terrain vehicles, and aircraft by persons who are not dealers
- Sales & use tax exemption: property consumed, destroyed, or losing its identity in manufacturing
- Reporting Sales Tax on Sales of Motor Vehicles, Boats, Snowmobiles, Recreational Vehicles, Trailers, Semitrailers, All-Terrain Vehicles, and Aircraft
For Further Information:
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SALT Report 1374 - Massachusetts Governor Deval Patrick proposed in his 2013 budget for an increase in the cigarette tax, the imposition of a sales tax on candy and soda sales, and an amendment to the room occupancy tax.
In his budget the governor proposes to:
- Increase the cigarette tax by .50 cents per pack and raising taxes on cigars and other smokeless tobacco to the same extent as cigarette taxes
- Eliminate the sales tax exemption on candy and soda sales
- Amend the room occupancy excise tax to require “room re-sellers” doing business in Massachusetts to register and remit tax on rents received
- Modernize the apportionment of corporate excise taxes among states by sourcing to where services are received
- Delay the “FAS 109” deduction from the corporate excise tax for an additional year, and
- Provide $22 million to enhance Department of Revenue tax enforcement
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SALT Report 1373 - Effective February 1, 2012 the following local Arizona transaction privilege taxes will change. Paradise Valley will impose an additional tax on rentals, leases and licenses for nonresidential property or property units (commercial leases). The additional tax rate is 0.85%.
The description for “rental of real property” will be changed to “commercial lease”, and the current rate of 1.65% will not change. A new transaction privilege tax classification for residential rentals was created and has a rate of 1.65%.
Lastly, effective March 1, 2012, Tombstone will lower the tax rate for transient lodgings to 4%.
For Further Information:
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SALT Report 1372 - The Connecticut Department of Revenue Services has released guidance explaining the requirement and methods for paying taxes and filing returns electronically.
Who must pay by EFT?
Taxpayers who meet one of the following requirements and who are notified by DRS to pay a tax by EFT must pay by EFT:
- Employers whose annual wage withholding liability exceeds $2,000 for the 12-month period ending on the June 30 immediately preceding the quarterly period in which the taxpayer is being required to pay tax by EFT;
- Payers of non-payroll amounts whose annual non-wage withholding liability is $2,000 or more for the year immediately preceding the year in which the taxpayer is being required to pay tax by EFT; or
- Taxpayers whose prior year liability for a particular tax (other than withholding) is $4,000 or more during the 12-month period ending on June 30th for monthly and quarterly tax liabilities, or the last day of the preceding taxable year for annual tax liabilities.
How do I pay my taxes by EFT?
You may use one of the following methods to pay your taxes by EFT:
- ACH debit method through the DRS Taxpayer Service Center (TSC). You can access the TSC online or by telephone
- ACH credit method through your financial institution; or
- Credit card payment method
What Returns can I File?
The following returns can be filed using the TSConline:
- Form OS-114, Sales and Use Tax Return
- OP-210, Room Occupancy Tax Return
- Form CT-WH, Connecticut Withholding Tax Payment Form, and
- Form CT-941, Connecticut Quarterly Reconciliation of Withholding
The guide includes information on when taxpayers must pay by electronic funds transfer (EFT), how to make a payment from funds in an account outside the United States, how to report no tax due, and what to do if an emergency prevents a taxpayer from making a timely payment.
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