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Archive for Aaron Giles

Delaware, Florida, Georgia, Hawaii Sales And Use Tax (United States Series #4)

Aaron Giles Sales And Use Tax 3

Delaware Sales And Use Tax

The State of Delaware is one of the five States In the in the United States that does not have a Sales And Use Tax.

Florida Sales And Use Tax

The state of Florida levies a 6% state sales tax rate on the retail sale, lease or rental of most goods. Counties impose their own additional surtaxes. The range of sales tax rates charged within the state of Florida is between 6% and 7.5%. Florida’s county surtax rates are capped on purchases over $5,000, which is different from other states. For example, if you purchased a motor vehicle with the purchase price of $20,000 in a county with a 1% surtax rate, 7% tax would be due on the first $5,000 of the purchase price and 6% tax would be due on the remaining $15,000 of the purchase price.

Use tax is due on all purchases brought into the state of Florida, unless specifically exempted. Use tax is due at the same rates as sales tax. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of July should be reported to the state of Florida on or before August 20th.

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California, Colorado And Connecticut Sales And Use Tax (United States Sales And Use Tax Series #3)

Aaron Giles - State Sales And Use Tax Exemptions 2

California Sales And Use Tax

The state of California currently levies a 7.25% state sales tax rate.  Between January 1, 2013 and December 31, 2016 the state sales tax rate was 7.5%. The reduction to the current 7.25% rate took effect on January 1, 2017. The temporary 4-year increase in the state sales tax rate was a result of the increase passed under Proposition 30 which was on the November 6, 2012 ballot for California votes.  The initiative was approved by 55.4% of voters. See below for more detailed information about relevant California sales tax exemptions and use tax.

Counties & local municipalities also levy their own sales taxes in addition to the state rate.  Currently, California’s combined sales tax rates range between 7.25% and 9.75%.  The combined rate includes state, district, county and city sales tax.

Use tax is applied on the same basis and at the same rates as sales tax is within the state of California. For monthly-filers, returns are due on or before the last day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be filed with the state of California on or before the last day of February.
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Alaska, Arizona And Arkansas Sales And Use Tax (United States Sales And Use Tax Series – Part #2)

Aaron Giles - State Sales And Use Tax Exemptions 1

Alaska, Arizona And Arkansas Sales Tax Exemptions

Alaska Sales Tax Exemptions

The state of Alaska is one of five states in the U.S. that does not charge a state sales tax. At the local level over 100 municipalities do collect a sales tax, with rates ranging between 1% and 7.5%.   For more information on Alaska sales tax exemptions please visit:

Alaska Department of Revenue
Alaska Sales Tax Exemption Statement

Arizona Sales Tax Exemptions

The state of Arizona levies a Transaction Privilege Tax, which is similar to sales tax in other states. The state rate is 5.6% and is levied on all purchases of tangible personal property unless specifically exempted. All Arizona counties collect an additional tax ranging between 1-5.3%.
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United States Sales And Use Tax Series (Alabama Part #1)

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Alabama Sales Tax Exemptions

Alabama levies a 4% state sales tax on all purchases of tangible personal property unless the transaction is specifically exempted. There are more than 200 city and county sales taxes imposed in addition to the 4% state sales tax rate. Alabama’s range of sales tax rates is between 4% and 11%.

The consumers use tax is imposed on tangible personal property brought into Alabama for storage, use, or consumption in the state when the seller did not collect seller’s use tax on the sale of the property. The tax rates due are the same rates as for sales tax. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of Alabama on or before February 20th.

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State And Federal Excise Tax Refunds On Clear Diesel Used In An Exempt Manner

Aaron Giles And State Fuel Taxes

When we go to fill up at the corner gas station nearby we’re all familiar with the choices of diesel and the various octane ratings of unleaded fuel.  What your corner gas station may not have is a pump for dyed diesel.  That isn’t really a problem for individual consumers, but it might be for business consumers who may qualify for excise tax refunds on clear diesel used in a qualifying manner.

What is dyed diesel fuel?

Dyed diesel is called by a number of different names – off-road diesel, untaxed diesel, pink or red diesel – but the only real difference between it and the clear diesel is that dye has been added.  The dye is added to distinguish it from the clear diesel because dyed diesel is taxed at a lower rate by both the state and federal government.

Dyed diesel is illegal for use on roads and highways because it is taxed at a lower rate than clear diesel.  The taxes on clear diesel include both state and federal taxes for the maintenance of the roads and highways.  Because dyed diesel is intended to be used “off-road” the taxes to offset the costs of the wear and tear caused by vehicles operating on the roads and highways are not included in the taxes levied on dyed diesel.

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Florida Sales & Use Tax Exemption For Manufacturing Is Broad

Aaron Giles - Sales And Use Tax In Florida

Florida sales and use tax law offers a great tax exemption for manufacturers.  There are actually several sections of the Statutes and Rules where the relevant Florida sales and use tax exemptions can be found.  When one combines the relevant Florida sales and use tax exemptions for manufacturers, their combination results in one of the broader exemptions for manufacturers in the U.S.

Fla. Admin. Code Ann.  §12A-1.063 provides the basis for a Florida sales and use tax exemption for industrial machinery and equipment purchases. In Florida, industrial machinery and equipment is defined as tangible personal property that has a depreciable life of three years or more and is a component or integral part of the manufacturing process. To qualify the manufacturer must be classified under a manufacturing North American Industry Classification System (“NAICS”) code (e.g. a code beginning with the two digits of 31, 32, or 33). Examples of qualifying machinery and equipment include: forklifts, conveyor belt systems, or machinery or equipment that shapes, cuts or forms the product being manufactured for sale.

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Determination Of Property’s Taxability For Michigan Sales And Use Tax

Aaron Giles - Michigan Property Tax

When you want to determine property’s taxability for Michigan Sales and Use Tax there are three factors to determine whether an item is tangible personal property or a fixture attached to the real estate:

    1. Whether there is actual or constructive annexation of the item to real estate – An object will not be determined to be a fixture unless it is attached or affixed in some manner to the realty. Michigan courts acknowledge that there are “innumerable ways” that items may be attached or affixed to real estate. Actual attachment or affixation can be as slight as being bolted or anchored to the ground. Constructive attachment or affixation occurs when an item whose weight, size or character are such that the intent of placing the item was to have that item become part of the real estate even if that object is not physically attached to the real estate.
    2. Whether the item is an adaptation to the real estate – An object meets this criterion if the item modifies or adapts the application or use of the building. Examples include: a drive up window either at a fast food restaurant or bank, dock seals or doors, or seating which is attached to the floor inside of a venue such as an arena or theater.
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New York State Sales Tax Exemptions For Utilities

Aaron Giles - New York State Sales Tax Exemptions

Utilities consumed in the state of New York are generally subject to sales and use tax. However, there are several utility uses that qualify for New York sales tax exemptions. In New York, utilities include purchases of gas, electricity, refrigeration and steam. Below are discussions of some of the more common exemptions for utilities in the state of New York.

Fuel and Utilities Used in Manufacturing or Processing
Utilities, including fuel, gas, and electricity, sold to manufacturers within the state of New York are completely exempt from sales tax if they are directly and exclusively used in production. The state of New York determines that a utility is used directly in production if it is either used to operate tax exempt equipment or machinery, used to create conditions necessary or required for production, or perform an actual step or part of the manufacturing or production process. A utility is used exclusively in production if it is 100% used in the production process.

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Texas Sales Tax Exemption For Manufacturing – What Is Exempt?

Aaron Giles - Texas Sales Tax Exemption

The Texas sales tax exemption for manufacturing makes purchases that are necessary and essential to the manufacturing process non-taxable.  Under the general heading of the Texas Sales Tax Exemption for manufacturing, there are a number of subcategories of purchases which are designated as taxable or non-taxable by the Texas Comptroller’s Office.

A manufacturer, as Texas defines, is a taxpayer who manufactures, fabricates or processes tangible personal property for sale. Texas Administrative Code 3.300 explains in detail what items specifically are exempt from sales tax and which items are not.  This list is not intended to be exhaustive, but does provide taxpayers solid guidance about what may and may not qualify for the Texas sales tax exemption for manufacturing.

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Sales Tax Consultants Top 5 Tips For An Effective Sales Tax Audit Defense

Aaron Giles - Sales Tax Audit Defense

Sales tax audit defense is one of the cornerstones of our sales tax consulting practice. We’ve represented hundreds of clients who were undergoing sales tax audits. We’ve fought audit assessments in all 45 U.S. states that have sales tax. One of the most common questions we hear from taxpayers upon receiving the notification of a sales tax audit is, “What should we do now?” We’ve put together the following list of the best tips and tricks of the trade from our experience as sales tax consultants defending a sales tax audit.

Sales Tax Audit Defense Tip #1 – Relax

It’s never good news when you find out that your company has been selected for a sales tax audit. It seems like the initial reaction everyone has is to cringe and think “I wonder what the auditor is going to find?” Followed quickly by the second thought of “I wonder how much time this audit is going to take?” While no one will ever confuse a sales tax audit with fun, it’s important to remember that there is nothing you can do to avoid the process. Stressing about what prompted the sales tax audit is a useless endeavor and it’s important to remember that it doesn’t necessarily mean that the state suspects any wrongdoing by your company. In fact, I’d say from our experience that less than 10% of audits are generated because of some suspected liability.

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Georgia: New Sales Tax Compliance Requirements For Online Retailers

Georgia will require online retailers to file sales tax compliance returns beginning January 1, 2019, if their annual Georgia revenues exceed $250,000 or if they have more than 200 separate retail transactions within the state per calendar year.

As an alternative to collecting Georgia sales tax from its customers and filing sales tax compliance returns, the retailer may instead send “tax due” notices to all Georgia customers who purchased more than $500 of taxable goods during the year. The law, which originated as House Bill 61 and became Act 365, was signed by Governor Nathan Deal on May 8, 2018.

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Determination Of Property’s Taxability For Michigan Sales And Use Tax

In Michigan sales and use tax law determining whether an item of tangible personal property remains tangible personal property or becomes a fixture affixed to real estate can significantly affect the taxability of the item in question. This determination may impact whether the taxpayer is considered a retailer or a contractor.

There are also several exemptions in Michigan sales and use tax law for purchases of tangible personal property that do not apply if the item is instead a fixture. The Michigan sales and use tax exemptions for both the agricultural industry and the industrial processing or manufacturing industry include such language.

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