Aaron Giles | TaxConnections

02 Sep 2020

Maryland Sales Tax Exemption For Software

The Maryland sales tax exemption for software provides a sales & use tax exemption for Maryland-based businesses that purchase and use certain types of software during the course of their operations. The knowledgeable and detail-oriented sales tax consultants at the Agile Consulting Group can provide your organization with the resources and tools to take advantage of this exemption and improve your business’s cash flow.

In general, per MD Code Ann. Tax-Gen. 11-102(a), tangible personal property that is sold at retail is subject to sales and use tax on the gross sales price. Tangible personal property is defined in MD Code Ann. Tax-Gen 11-101(k)(1)(i) as meaning, “corporeal personal property of any nature.” By using the term “corporeal”, Maryland institutes a very literal definition of tangible personal property because corporeal means that the property in question must be a physical object and exist as a physical form. This definition is relevant to any discussion about software purchases because this definition makes an important distinction between the type of software that should be considered as tangible personal property versus intangible personal property.

Written by Aaron Giles | Posted in Maryland Sales Tax Exemption • Software

07 Jul 2020

Sales Tax Consultanting Firm Very Successful In Expanding Alabama Sales Tax Exemption For Implants

An often-overlooked Alabama medical sales tax exemption that can yield significant refund opportunities and future sales and use tax savings is related to the purchase of implants. If your Alabama hospital or ambulatory surgery center is acquiring implants for patients and paying sales or use tax on those purchases, Agile Consulting Group can help. We originated and pioneered this issue by first fighting for the correct application of Section 40-9-30, Code of Alabama 1975, which includes an Alabama sales and use tax exemption that had been “on the books” since August 1, 2014, but not honored by the Alabama Department of Revenue. Our sales tax consultants then worked hand-in-hand with the Alabama Department of Revenue and local taxing authorities to find mutually agreeable supporting documentation that would enable hospitals and surgery centers to enjoy the benefits of this Alabama medical sales tax exemption for implants.

Background Of Alabama Medical Sales Tax Exemption For Implants

In the Regular Session of 2014, House Bill 280 was introduced into the Ways and Means Education Committee by Representative Ron Johnson from District 33. The Bill made its way through both houses and was forwarded to Governor Bentley on April 3, 2014. House Bill 280 was signed into law and became Act 2014-453 taking effect August 1, 2014. Act 2014-453 added subparagraph (d) to Section 40-9-30. Subparagraph (d) reads,
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Written by Aaron Giles | Posted in Alabama Sales Tax Exemption

18 Jun 2020

Do I Need To Charge eCommerce Sales Tax For My Online Business?

Do you need to charge sales tax for an ecommerce company? Aaron Giles

Whether your online business is a brand-new start-up or an established business who is expanding into the online marketplace, eCommerce sales tax is merely one of the many responsibilities an online business needs to be concerned with handling correctly. eCommerce sales tax used to be more straightforward but has become increasingly complex over time, particularly since 2018. Included in this guide is an introduction to the sales tax requirements for online retailers and answers to some frequently asked questions about eCommerce sales tax.

Do I Need To Charge eCommerce Sales Tax For My Online Business?

The simple answer is…maybe. Whether or not you should be collecting eCommerce sales tax on your online sales depends on two factors:

FACTOR #1: HAVE I ESTABLISHED SALES TAX NEXUS WITHIN A STATE?

How to determine whether you have established sales tax nexus within a state:

Between 1992 and 2018, the nationwide standard for whether a business had established sales tax nexus hinged on whether the business had a “physical presence” within a state. Things were relatively simple then. On June 21, 2018 in its South Dakota v. Wayfair, Inc. ruling, the U.S. Supreme Court overturned the 1992 Quill case that established that “physical presence” principle. We’ve written extensively on the Wayfair case (if you’d like to read more click here) because of the seismic shift in caused in the world of sales tax, but to summarize briefly here, the Wayfair case changed the sales tax nexus standard from “physical presence” to “economic presence.” Now, a business that has either a physical presence or a sufficient economic presence within a state has established sales tax nexus, and all the collection and reporting obligations that go along with that, within that state’s borders.
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Written by Aaron Giles | Posted in eCommerce Sales Tax

12 Jun 2020

Sales Tax Audit Triggers: How States Identify You For An Audit

When you receive a sales and use tax audit notice in the mail, it sparks worry, concern and anxiety. Frequently, the first question that comes to mind is “What triggered this sales and use tax audit?” Understanding the sales and use tax audit triggers or cause of the audit can help companies both prepare for the audit by predicting what the auditor will be looking for, as well as take steps to avoid sales and use tax audits in the future.

Similar to the IRS with income tax audits, states have systems, policies and procedures in place that help them to identify businesses to select for a sales and use tax audit. While each state’s methodology is different, there are some common reasons taxpayers are flagged for a sales and use tax audit.

12 COMMON SALES AND USE TAX AUDIT TRIGGERS
Our analysis of common sales and use tax audit triggers is based upon Agile Consulting Group’s 15 years’ worth of sales and use tax audit defense and representation services that we have provided to hundreds of taxpayers across the U.S. We have arranged these reasons in order of the likelihood of triggering a sales and use tax audit.
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Written by Aaron Giles | Posted in Sales Tax Audit Triggers

04 Jun 2020

Sales Tax Recovery Reviews Generate Cash Flow

Sales Tax Recovery Reviews - Aaron Giles

Sales tax recovery reviews, sometimes known as sales tax reverse audits are a great way to generate cash flow at any time, but the disruption Covid-19 has caused worldwide has forced many businesses to reevaluate. Will reopening generate the volume of sales businesses had pre-Covid-19? Will our economy tip into a recession? Will businesses be forced to trim costs or even payroll to remain profitable? Businesses are facing these and many other pressing questions over the coming months. One thing is certain, businesses have found ways to adapt and do more with less over the past 10+ weeks. Maybe it is time to reconsider recovering overpaid sales taxes.

Sales Tax Recovery
Many of you are familiar with sales tax recovery reviews. Quite a few of you have enjoyed success in prior sales tax recovery reviews. We view sales tax recovery reviews as something akin to a doctor’s checkup. Maybe they don’t need to occur on an annual basis (who are we kidding, we all know we’ve missed one from time-to-time), but every few years it is imperative to go in for that checkup to make sure everything is still functioning properly and to address any concerns we have. That’s the same opportunity sales tax recovery reviews offer your business as it relates to sales tax.

Policies, processes and procedures are key to any business. Over time, even the best planned policies, processes and procedures have slippage and need to be revisited. In sales tax particularly, you must review your company’s policies, processes and procedures on a regular basis.

WHY SHOULD SALES TAX RECOVERY REVIEWS OCCUR ON A REGULAR BASIS?
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Written by Aaron Giles | Posted in Sales Tax Recovery Reviews • Sales Tax Reverse Audits

27 Feb 2020

12 Common Sales And Use Tax Audit Triggers

12 COMMON SALES AND USE TAX AUDIT TRIGGERS

Our analysis of common sales and use tax audit triggers is based upon 15 years’ worth of sales and use tax audit defense and representation services that we have provided to hundreds of taxpayers across the U.S. We have arranged these reasons in order of the likelihood of triggering a sales and use tax audit.

Written by Aaron Giles | Posted in Sales And Use Tax

19 Feb 2020

Sacramento Sales Tax Increase On 2020 Ballot?

A Sacramento sales tax increase may be on the November 2020 ballot for local residents. The draft proposal, referred to as Measure A, intends to raise $8 billion over the next 40 years to bring improvements to issues like transportation, climate change, and even homelessness. For voters, these developments come at a cost. In order to raise the necessary funds to cover everything within the proposal, city and county leaders propose increasing the local sales tax a half a cent. If approved, the new tax would increase the total Sacramento sales tax to a total of 9 cents per dollar.

However, the likelihood of this proposal even being placed on the November 2020 ballot is beginning to look very slim. Measure A is simply a revamp of Measure B, which was placed on the November 2016 ballot and received 65% of the vote, just 2% under the required 67% to pass by state law. Additionally, the new tax would be 3rd active transportation related tax within the last two decades. Back in 2004, voters approved a 30-year Sacramento sales tax that increased sales tax by a half-cent. In 2018, California officials increased the state’s gas tax from 41.7 cents to 47.3 cents.
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Written by Aaron Giles | Posted in Sales Tax Legislation

13 Feb 2020

Mississippi Sales Tax Exemption For Manufacturing

The Mississippi sales tax exemption for manufacturing enables manufacturers and custom processors to take advantage of a lower tax rate on eligible machinery and equipment as well as a full sales tax exemption on items incorporated into the final manufactured product. The skilled sales tax consultants at Agile Consulting are excited to help Mississippi manufacturers understand and take advantage of these generous exemptions.

Mississippi sales tax exemption for manufacturers
The state of Mississippi defines manufacturing as “activities of an industrial or commercial nature wherein labor or skill is applied, by hand or machinery, to materials belonging to the manufacturer so that a new, different, or more useful article of tangible personal property or substance of trade or commerce or electric power is produced for sale or rental and includes the production or fabrication of special-made or custom-made articles for sale or rental” [Miss. Code Ann. §27-65-11(b)]. Manufacturing also includes recycling that does convert material into more useful product for sale.
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Written by Aaron Giles | Posted in Mississippi • Sales And Use Tax Manufacturing Exemption

07 Feb 2020

Georgia Sales Tax Exemption For Software

Since most businesses utilize software in their operations, it is important for tax and accounting professionals to recognize how the Georgia sales tax exemption for software impacts their business. GA Comp. R. & Regs. 560-12-2-.111(3)(b) provides a sales tax exemption on the sale, lease, rental, license or use of custom computer software. Custom computer software is defined as, “computer software, including custom updates, which is designed and developed by the author to the specifications of a specific purchaser” per GA Comp. R. & Regs. 560-12-2-.111(2)(e) This Georgia sales tax exemption for custom computer software will apply regardless of how the purchase obtains the software. A purchaser can receive the custom computer software through a tangible medium and it will not affect the taxability of the software since the tangible medium is considered incidental to the sale.

The real essence of the transaction with custom computer software is the professional service provided by the seller in the creation and development of the custom software program. If a software program that is developed to the specifications of a specific purchaser is then distributed for widespread use to different purchasers, the software ceases to be considered custom and would become subject to sales tax as prewritten computer software. However, the original purchaser can obtain multiple copies or license agreements of the custom software that was developed to their specifications and this would meet the criteria for the sales tax exemption.
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Written by Aaron Giles | Posted in Georgia Sales And Use Tax • Sales Tax Exemption

21 Jan 2020

Illinois Sales Tax Deduction Cap On Vehicle Trade-Ins

When the final results are in, car dealerships in Illinois likely noticed a spike in revenue during December 2019 by customers looking to avoid increased Illinois sales tax. This increase is a result of a new Illinois sales tax law that is set to go into effect January 1, 2020. The tax law that was signed by Gov. J.B. Pritzker on June 28^th caps the sales tax deduction on the trade-in value of vehicles. Previously, Illinois had no cap on the sales tax deduction allowable on vehicles that are traded in as a part of the purchase of a new vehicle. State officials estimate that the change in Illinois tax law will generate roughly $60 million in additional revenue on an annual basis. Proceeds will go to funding roads and vertical infrastructure projects under the Rebuild Illinois Capital Plan.

Written by Aaron Giles | Posted in Illinois • Sales Tax Deduction • Vehicle Trade

05 Dec 2019

Massachusetts Sales Tax Receipts Below Expectations

Since the 2018 Wayfair Supreme Court ruling, the State of Massachusetts sales tax receipts from online purchases have failed to meet earlier predictions. A November 2017 report by the US Government Accountability Office revealed that the state would generate $279 million in additional revenue. With actual Massachusetts sales tax receipts from online transactions totaling $60 million, leaders are scratching their heads about what has gone wrong.

Although many states anticipated higher sales tax revenues following the favorable outcome in the Wayfair ruling, Massachusetts was one state that did not take all aspects of the ruling into consideration. The main reason why Massachusetts sales tax receipts did not increase following the ruling is primarily due minimal impact on online retailers. Companies with national stature such as Amazon, are far more likely to generate more in sales tax revenue which is driven by their high volume of online sales. However, Amazon has been collecting Massachusetts state sales tax dating back to 2013. Jared Walczak, senior policy analyst at Tax Foundation stated that “…government officials didn’t have a good grasp of just how much they were already collecting in online sales taxes.”

Written by Aaron Giles | Posted in Massachusetts Sales Tax

24 Oct 2019

Wisconsin And Wyoming State Sales And Use Tax

Wisconsin State Sales And Use Tax

The state of Wisconsin levies a 5% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions can impose additional sales taxes of 0.6%. The range of total sales tax rates within the state of Wisconsin is between 5% and 5.6%.

Use tax is also collected on the consumption, use or storage of goods in Wisconsin if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. 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 Wisconsin on or before the 20th day of February. For more information on Wisconsin sales tax exemptions please visit the sites shown below.
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Written by Aaron Giles | Posted in Sales And Use Tax • Wisconsin • Wyoming