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Archive for Jordan Perri

Does Artificial Intelligence Have A Place In HTS Classification?

Does Artificial Intelligence Have A Place In HTS Classification?

International Trade is complex and often quite meticulous. The industry continues to grow more and more complex as technology advances and relationships among countries evolve. Continuous advances in technology force industry leaders to consider things they have never considered before. In 1990, world trade leaders probably were not debating where we should classify electronic waste. As the Harmonized Tariff Schedule (HTS) evolves, we long for a method of simplifying its use.

In 2016, a Thomson Reuters/KPMG survey found that 95% of respondents reported having difficulty classifying products with the HTS. Utilizing the HTS does take patience, critical thinking skills and extreme attention to detail. Categorizing products may seem like a simple process; however, when there are over 19,000 options and descriptions, it can be difficult to decide exactly where to place your “simple” jar of salsa. A few companies within the industry have decided to try and automate this tedious process with the use of artificial intelligence.

Artificial intelligence (AI) has become a top trend in seemingly every industry. From Tony Stark’s Jarvis to Amazon’s Alexa, AI went from a farfetched Sci-Fi movie plot to becoming a guest in all of our homes. In an industry with so many rules of interpretation, could AI be a viable option for classification in International Trade?

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White House Announces New Indo-Pacific Economic Framework

White House Announces New Indo-Pacific Economic Framework

The Biden administration announced the launch of the Indo-Pacific Economic Framework (IPEF) on Monday, May 23, which is designed to promote financial and economic stability in Asia and Oceania. The pact follows the initiation of the Regional Comprehensive Economic Partnership (RCEP), a trade deal spearheaded by China in January of 2022, and primarily noted for blunting the United States’ influence in the region.

Alongside the United States, member nations of IPEF include Australia, Brunei, India, Indonesia, Japan, South Korea, Malaysia, New Zealand, the Philippines, Singapore, Thailand, and Vietnam. Together, these 13 countries account for 40% of the world’s GDP, dwarfing the 30.5% represented by the nations of RCEP. Notably, China, Cambodia, and Myanmar were not invited to participate in IPEF. Taiwan was also not included despite bipartisan calls from Congress for its participation, however experts note that Taiwan’s inclusion would likely agitate China and consequently discourage other nations from joining.

Unlike RCEP and the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), IPEF is not a free trade agreement and will not lower tariffs, a move that some analysts have argued will deter other countries from participating. Instead, IPEF will focus on four main pillars to stimulate growth and commercial partnership in the area: clean energy, global trade, tax and anti-corruption initiatives, and supply chain sustainability. Negotiations on the specifics of each of these pillars have yet to commence, but are expected to begin shortly after Monday’s announcement.

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Baby Formula Shortage Underscores Supply Chain Struggles; US Plans To Ease Import Restrictions

Baby Formula Shortage Underscores Supply Chain Struggles; US Plans To Ease Import Restrictions

A sudden nationwide shortage of baby formula has served as a stark reminder that supply chain woes continue to be felt midway through 2022. Across the United States, 40% of formula is currently out of stock, while individual states are seeing even more acute supply gaps, which have increased by 2,000% since January. In an effort to relieve the crisis, the Biden administration announced that it is looking into increasing imports from the EU and South America, and encouraged international formula companies to quickly submit documentation outlining their product safety and nutritional standards.

The cause of the shortage can be pinned on a combination of factors that happened to coincide within the past couple of weeks. The United States produces 98% of its supply of baby formula domestically, and 90% comes from four major suppliers. This strategy was tested when one of these suppliers, Abbott (which accounts for 43% of the US supply alone), suffered a pathogen outbreak in February linked to the deaths of two infants. The plant soon shuttered and a massive recall was announced shortly thereafter, and the FDA recommended that parents stay away from formula produced by Abbott.

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Business Personal Property Tax Considerations

Business Personal Property Tax Considerations

Whether you’re a business that’s just starting out, or an established one looking to expand into another state, obviously there are a multitude of factors (tax and otherwise) to be considered. Regarding the business personal property tax piece of the equation – if you have a large-dollar asset cost or carry inventory, there are a few other aspects to consider besides just the tax rate. All of them must be looked at in conjunction with one another when deciding which state would be the most favorable. Below is a brief glance at each one.

Does the state tax business personal property?

Most states do tax business personal property, but there are currently 12 states that do not. A majority of the non-taxed states are in the eastern and central sections of the country.

Does the state tax business inventory?

Contrarily, most states do not tax business inventory; there are eight that definitely do, and an additional six that we refer to as “footnote” states.

Are there value thresholds?

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U.S. States Sales Tax Updates: Connecticut, Washington, New Mexico, Maryland

U.S. States Sales Tax Updates

An Apple a Day Keeps the Sales Tax Away – Connecticut Online Learning Rendered Nontaxable

The true object test comes into play when determining the taxability of online learning plans and courses. Online learning plans are generally not subject to sales and use tax as digital goods because the true object being sold is the nontaxable service of education or training. However, these courses may be taxable when connected to job-related software or computer training at rate of 6.35% and non-job-related computer or software training at a rate of 1%. While audio-visual works are included in many online learning programs, the true object of the course is the education or training and not the sale of the digital good. Therefore, the service is nontaxable. On the other hand, if a company enacts an online job-related training plan it is a taxable service since it qualifies as a business management consulting service. However, general education seminars, refresher courses, courses on current developments in a particular field, and courses for continuing education credits are not subject to tax.

Sales Tax Gain from Your Window Pain – WA Taxpayer Audit Assessment

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U.K Trade Minister Aims To Strike Mini Deals With Individual U.S. States

U.K Trade Minister Aims To Strike Mini Deals With Individual U.S. States

Penny Mordaunt, U.K. Minister of Trade, toured several U.S. states to begin a discussion about trading with states individually. Mordaunt said as a country, the United States “has more to do to be ready for an FTA.” She now spends time negotiating with officials in California, New York and several other states and plans to negotiate trade deals with up to twenty states.

These conversations were sparked by President Biden’s hesitancy to discuss a trade deal with Prime Minister Boris Johnson during their meeting in September 2021. While the Prime Minister hoped to have an agreement set by 2024, he says that President Biden had “a lot of fish to fry” and is unable to commit. Seemingly in response, Mordaunt began meeting with state officials to discuss future agreements in December of 2021.

Mordaunt’s goals for the discussions include:

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Cryptocurrency And Taxation In Multiple Tax Jurisdictions

Cryptocurrency And Taxation In Multiple Tax Jurisdictions

Can My Business Accept Cryptocurrency?

How blockchain payment technology is infiltrating core business practices and ways we can maintain tax compliance with its use.

Cryptocurrency is a decentralized, digital form of currency that is designed to work as an alternative payment medium based on quickly emerging blockchain technology. Although there are over 5,000 different cryptocurrencies in circulation, Bitcoin is the most popular among these digital currencies and is the fastest growing one to date considering the volume of trading and price valuation increases. Based on such characteristics cryptocurrency is seen as an investment capital asset, more akin to corporate stocks, rather than as a form of legal tender. This perspective shifted in recent weeks as large corporations including Tesla, MasterCard, Home Depot, AT&T, and BNY Mellon are making strides to accept Bitcoin as a payment option for their goods and services.

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Consumer’s Use Tax vs. Seller’s Use Tax: Nearly Every Business Owes Use Tax

Consumer’s Use Tax vs. Seller’s Use Tax: Nearly Every Business Owes Use Tax

Use Tax Overview

Use tax is defined as a tax on the storage, use, or consumption of a taxable item or service on which no sales tax has been paid. It is known as a complementary tax to sales tax and can be applied if a different state sales tax was charged at a lesser rate or if an incorrect rate is charged entirely. However, use tax will most often apply when a business makes a purchase from an out-of-state-seller that is not required to collect sales tax in the purchaser’s state. Use tax exists as a way for states to ensure they do not lose on possible tax revenue due to situations where unregistered sellers do not collect, or businesses make purchases outside of the state for use within their jurisdiction.  It is also applied to items that were exempt from tax when purchased, yet later used in a taxable manner.

After hearing this you may wonder if you are responsible for paying use tax? To determine this, it is important to know that there are two types of use tax when working to identify who is responsible for the use tax: “Consumer’s” use and “Seller’s” use.

Consumer’s Use Tax

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Truckers Protest In Canada Over COVID-19 Regulations Continue Into The US

Truckers Protest In Canada over COVID-19 Regulations Continue Into The US

Massive truck protests over COVID-19 regulations that originated in Canada’s capital, Ottawa, on January 29 have sprawled away from urban centers and onto major thoroughfares, including those connecting trade routes between Canada and the United States. On February 10, 2022, the Ambassador Bridge between Detroit and Windsor was partially blocked, disrupting a border crossing that accounts for 25% of US-Canadian commercial trade, leading the US Customs and Border Protection (CBP) to request leniency in other ports in order to alleviate the additional volume of cargo processing.

The protest, which was initially instigated by Canadian truckers protesting their government’s new vaccination requirement (or else face a two-week quarantine after crossing the US-CA border), has morphed into a more generalized movement protesting against masks, hand-washing, and other public health measures intended to reduce contraction of COVID-19. In addition to the Ambassador Bridge, tractors and other vehicles also blocked Alberta’s Highway 4 in both directions on February 8, while the Coutts-Sweet Grass border crossing, which accommodates 150,000 trucks every year, found itself blocked on February 9. Canadian officials say that their options to reduce the blockages are limited due to a lack of specialized equipment and operators needed to remove the vehicles.

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Consumer’s Use Tax vs. Seller’s Use Tax: Nearly Every Business Owes Use Tax

Consumer’s Use Tax vs. Seller’s Use Tax: Nearly Every Business Owes Use Tax

Use Tax Overview

Use tax is defined as a tax on the storage, use, or consumption of a taxable item or service on which no sales tax has been paid. It is known as a complementary tax to sales tax and can be applied if a different state sales tax was charged at a lesser rate or if an incorrect rate is charged entirely. However, use tax will most often apply when a business makes a purchase from an out-of-state-seller that is not required to collect sales tax in the purchaser’s state. Use tax exists as a way for states to ensure they do not lose on possible tax revenue due to situations where unregistered sellers do not collect, or businesses make purchases outside of the state for use within their jurisdiction.  It is also applied to items that were exempt from tax when purchased, yet later used in a taxable manner.

After hearing this you may wonder if you are responsible for paying use tax? To determine this, it is important to know that there are two types of use tax when working to identify who is responsible for the use tax: “Consumer’s” use and “Seller’s” use.

Consumer’s Use Tax

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Oregon’s Corporate Activity Tax

Oregon’s Corporate Activity Tax

Did you know that several states have their own taxes unique to them that businesses must file in order to remain compliant? States such as Washington, Delaware, and Oregon have state specific taxes. Oregon’s Corporate Activity Tax (CAT) is a state specific tax that was signed into law in May of 2019 and became applicable to tax years beginning January 1, 2020.

Oregon’s Corporate Activity Tax is a tax for the privilege of doing business in Oregon and is based on commercial activity in Oregon. This tax applies to commercial activity in excess of $1 million for all types of business entities including C and S corporations, sole proprietorships, partnerships, LLCs and other entities. The state defines commercial activity as “the total amount realized by a taxpayer from the transactions and activity in the regular course of their business in Oregon without deduction for expenses incurred by the business.” Businesses with commercial activity of $750,000+ must be registered for the CAT within 30 days of exceeding the threshold, but do not have a payment obligation until the commercial activity is more than $1 million.
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Government’s Latest Move On Cryptocurrency Taxation

Government’s Latest Move On Cryptocurrency Taxation

$1.1 Trillion Infrastructure Bill Is Government’s Latest Move On Cryptocurrency Taxation

The proposed infrastructure bill valued at just over $1 Trillion over a 5-year period has recently made its way through the senate1. The Bipartisan Infrastructure Deal is monumental and would make some of the largest federal investments in public transit, clean drinking water, bridges, and electrical vehicle infrastructure in the history of the United States. Unfortunately, these things are never as simple as they seem. Although the bill had bipartisan support with a voting of 67-32, it is still not fully out of the woods yet. The bill itself is over 2,000 pages in length and includes funding for some of the projects mentioned as well as; highways, airports, cyber defense, and climate change just to name a few. This deal comes as the democrats and the Biden administration ready a much larger $3.5 trillion package that is currently being considered under budget rules which would only need 51 senators with Vice President Kamala Harris able to break a potential tie.

Key to Infrastructure Deal and New Stimulus is the Taxation of Cryptocurrency

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