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Archive for Monika Miles

18 May 2022
Written by | Posted in Connecticut Taxes

State Of Connecticut Tax Business Climate

Connecticut Tax Business Climate

This month, we travel to the Southern part of New England, Connecticut. The “Constitution State” is the third smallest state according to land size, but its population is actually bigger than 20 other states. The has a mix of coastal cities and rural areas dotted with small towns. Mystic is famed for its Seaport Museum filled with centuries-old ships, and the beluga whale exhibits at Mystic Aquarium. On Long Island Sound, the city of New Haven is known as the home of Yale University and its acclaimed Peabody Museum of Natural History.

Business Climate

The state’s key industries include finance, insurance and real estate. Major financial industry employers include The Hartford, Travelers, Cigna, Aetna, Mass Mutual, People’s United Financial, Bank of America, Realogy, Bridgewater Associates, GE Capital, William Raveis Real Estate and Berkshire Hathaway.

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06 May 2022
Written by | Posted in SaaS Update • Tax Update On Software As A Service

An Important Update On Software-as-a-Service (SaaS) And Sales Tax Questions And Answers

Tax Update On Software As A Service

The Software-as-a-Service (SaaS) industry has continuously grown since the first SaaS company was founded in 1999, and remains a complex and ever-changing field. It can be especially complicated when it comes to sales tax, and we constantly receive questions about it. The very nature of the product (is it a service or a software?) is a large part of the confusion, and as a result, states may define SaaS differently, which makes it hard for businesses, especially smaller ones, to keep up. SaaS is now taxed in over 20 states, but for different reasons. Other areas unique to SaaS companies in the realm of sales tax include the sourcing of revenue to the correct state, timing of the recognition of the sale and the application of the tax (versus recognition of revenue for financial/book purposes).

If you are new to the application of sales tax to SaaS, we recommend you check out our previous articles on the topic, including this one here, where we discuss in-depth what makes SaaS sales taxation so complex. In the current article, we discuss answers to specific SaaS sales tax questions and clarify how we can help companies move forward.

Q: How Has The SaaS Industry Grown This Year?

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27 Apr 2022
Written by | Posted in Non-Fungible Tokens And Sales Tax

As Non-Fungible Tokens (NFTs) Gain Popularity, What Are The Sales Tax Ramifications?

Monika Miles - As NFTs Gain Popularity, What Are The Sales Tax Ramifications?

Non-Fungible Tokens, or NFTs, have been around since 2014, but only obtained mainstream use in 2021. According to the Economic Times, NFTs have only gained momentum since. This is due to a variety of reasons including the connection with the metaverse and celebrities jumping on the NFT bandwagon. As a result, NFT sales have soared, with some bringing in millions of dollars. With the popularity of NFTs rising, what are the sales tax ramifications? In this blog article, we explore this new and multifaceted area of taxes.

What Is An NFT? 

Before we explore NFT sales tax implications, let’s clarify what an NFT is. An NFT is a digital asset that represents real-world objects like music, art and videos. Just about anything can be an NFT, and this link shares a list of some of the most popular types  such as collectables, trading cards, art, memes and more. NFTs are bought and sold online, usually with cryptocurrency, a decentralized digital money based on blockchain technology like Bitcoin. As we mentioned above, NFTs have gained traction in recent years, especially as a way to buy and sell digital artwork. According to Forbes, about $174 million has been spent on NFTs since November 2017. NFTs stand out among most digital creations, because they are generally either very limited, or one of a kind, and have unique identifying codes.

NFTs And Sales Tax

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19 Apr 2022
Written by | Posted in California • Craft Brewing • Sales And Use Tax Manufacturing Exemption

Beer Brewing And Sales Tax In California

Beer Brewing And Sales Tax In California

Craft brewing is a highly competitive industry – California leads the U.S. with almost a thousand craft beer breweries; New York, Pennsylvania, Colorado, Washington and Michigan have about 400 craft brewers per state – that’s a lot of competition. So, with all that competition, craft brewers need to look for edges to stay in business by increasing profits and reducing operating costs. Craft brewers can minimize their operating costs by reducing their sales and use tax burden, or “beer-den.” In this blog we are going to focus on the state with the most craft beer brewers – like the color of a crisp lager we will direct this blog to the Golden State – California.

Reducing Your Sales and Use Tax “Beer-den”

The business model for all craft brewers includes two departments – sales and production. Beer sales are either at retail or for resale, and the production happens behind the wall in the brewery. Let’s start with sales:

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13 Apr 2022
Written by | Posted in Sales Tax Revenue • Sales/Use Tax

Returns And Sales Tax: What Are Important Things To Know As A Business?

Returns And Sales Tax: What Are Important Things To Know As A Business?

Returns are inevitable when you sell a product, whether you are a brick-and-mortar business, an online retailer or both. According to a recent survey published by the National Retail Federation and Appriss Retail, retailers saw about 16.6% of total merchandise sold eventually returned in 2021, which is up from the 10.6% of total returns in 202o. Since you are bound to see returns as an e-commerce business, it is important to be aware of the sales tax refund obligation process.

It seems simple enough, right? You need to refund your customer the sales tax that you collected from them, so just claim a credit on your next sales tax return. Unfortunately, as with just about every area of sales tax, the answer is a little more complicated. Keep reading this article to learn more about your state’s requirements for refunds and sales tax.

How Many Returns Are We Talking About?

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04 Mar 2022
Written by | Posted in Unclaimed Property

Important Updates California Taxpayers Need To Know About Unclaimed Property

Important Updates California Taxpayers Need To Know About Unclaimed Property

In this article, we discuss what unclaimed property is and new California updates that taxpayers should be aware of.

What Is Unclaimed Property?  

Before we discuss the new unclaimed property updates in California, it is important to have a clear understanding of what unclaimed property is. All 50 states currently have unclaimed property (sometimes also referred to as escheat) legislation. Simply put, unclaimed property is when a company has an outstanding debt that has not been claimed by the rightful recipient. When this happens, the state will help recover it. This subsequently creates a huge hassle for the companies.

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02 Mar 2022
Written by | Posted in TaxConnections

Parish-By-Parish: A Helpful Guide To The Complex Louisiana Sales Tax System

Parish-By-Parish: A Helpful Guide To The Complex Louisiana Sales Tax System

If you have dealt with multi-state tax before, you know how varied and complex some state legislation can be. One state with a particularly complicated sales tax system is the lively state of Louisiana. In this blog article, we discuss what makes Louisiana’s tax climate unique, as well as a recent lawsuit they faced because of it.

The Complexity Of The Louisiana Sales Tax System

In most states, your only requirement is to collect and remit sales tax based on the rate in the states you do business in. If you have sales tax compliance in Louisiana, however, not only do you have to collect and remit tax to the state, but you are also required to separately collect and remit sales tax in each individual parish (or county) that you do business in. There are 64 parishes in Louisiana, so it can become complex and time-consuming very quickly, especially for small businesses and businesses that already have multi-state tax obligations.

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18 Feb 2022
Written by | Posted in Louisiana Sales Tax

Parish-By-Parish: A Helpful Guide To The Complex Louisiana Sales Tax System

Parish-By-Parish: A Helpful Guide To The Complex Louisiana Sales Tax System

If you have dealt with multi-state tax before, you know how varied and complex some state legislation can be. One state with a particularly complicated sales tax system is the lively state of Louisiana. In this blog article, we discuss what makes Louisiana’s tax climate unique, as well as a recent lawsuit they faced because of it.

The Complexity Of The Louisiana Sales Tax System

In most states, your only requirement is to collect and remit sales tax based on the rate in the states you do business in. If you have sales tax compliance in Louisiana, however, not only do you have to collect and remit tax to the state, but you are also required to separately collect and remit sales tax in each individual parish (or county) that you do business in. There are 64 parishes in Louisiana, so it can become complex and time-consuming very quickly, especially for small businesses and businesses that already have multi-state tax obligations.

Louisiana also has the highest combined state and local sales tax rate in the United States, at 9.55%. The next two highest are Tennessee at 9.547% and Arkansas at 9.48%. Sometimes, particularly for small businesses, the time and money that extra sales tax compliances take can outweigh the benefits of selling products in the state.

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03 Feb 2022
Written by | Posted in Love And Taxes

Love And Taxes: How Are Your Favorite Valentine’s Day Products Taxed?

Love And Taxes: How Are Your Favorite Valentine’s Day Products Taxed?

Romantic dinners, bouquets or chocolates – how are you spending Valentine’s Day this year? As we approach the holiday of love, we thought it would be interesting to see how sales tax applies to different products or situations you may encounter!

Gifts: Taxable Or Not? 

Are you thinking of getting your valentine a box of chocolate, candy or other food gift this year? Food and candy sales tax varies depending on the state. What you pay in taxes in one state for a box of chocolates will be completely different in another. One of our latest blog articles dives into specific state tax rates on candy.

If you buy them another sort of gift, such as a stuffed animal or flowers from a brick and mortar store, your local state sales tax will apply to that item. Again, state sales tax varies.

If you buy the gift online, you will most likely have to pay sales tax, thanks to the 2018 Supreme Court Case, South Dakota v. Wayfair, Inc. Every state that has sales tax now has implemented some level of economic nexus. Oh, and shipping? Yes, maybe sales tax is due on that fee as well — depends on the state and how it’s stated on the invoice.

Event Tickets

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19 Jan 2022
Written by | Posted in 1099-K 2022 Tax Code Changes

Everything You Need To Know About The 1099-K 2022 Tax Code Changes

Everything You Need To Know About The 1099-K 2022 Tax Code Changes

Selling handmade products on Etsy, online tutoring and web editing are a few side hustles many turned to throughout the COVID-19 pandemic. As a result of being laid off or not feeling safe to return to work, many people started the small businesses they always dreamed of. Consequently, the use of mobile payment apps such as Venmo or PayPal grew, as it was a convenient way to receive payment. In 2020 alone there were 900 million new mobile payment app users worldwide. One of the upsides of using these apps is the ability to receive payment and move the money into a personal account immediately.

Another plus? In the past, you weren’t required to report your earnings via mobile payment apps to the IRS unless you had at least 200 transactions exceeding $20,000 in total value. But starting January 1, 2022, if you make over $600 in transactions on goods and services, you will need to report your earnings for next year’s filings in 2023.  If you exceed this goods and services threshold, you will receive a 1099-K form.

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06 Jan 2022
Written by | Posted in Economic Nexus

Does Economic Nexus Last Forever? What You Need To Know About Trailing Nexus

Does Economic Nexus Last Forever? What You Need To Know About Trailing Nexus

It has been over three years since the June 2018 U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc.  As a result of the ruling, most states across the country have enacted some form of economic nexus legislation.

We routinely share economic nexus updates on our blog – for the latest information read here and here.

In short: Previously, businesses needed to have a physical presence in a state in order to establish nexus there. With the Wayfair decision, in states that have enacted economic nexus law, any sort of economic presence can establish nexus for a company – as long as they meet that state’s threshold.

What Is A Threshold?

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04 Jan 2022
Written by | Posted in Remote Workers And Tax

Business And State Sales Tax Roundup: What Were The Big Changes?

Remote Workers And Tax

Missouri And Florida Implement Economic Nexus

If you follow our blog, you know that we frequently share updates regarding economic nexus as a result of the June 2018 U.S. Supreme Court ruling in South Dakota v. Wayfair, Inc.

On April 19, 2021, Florida’s governor signed S.B. 50 into law, making Florida one of the last states to adopt economic nexus for sales tax.

In June 2021, Missouri became the final state with a statewide sales tax to enact economic nexus legislation when Gov. Mike Parson signed SB 153 & 97.

How Else Has Economic Nexus Legislation Been Updated? 

Several states have either reduced or removed the sales or transaction thresholds for triggering nexus in their states within the last year (or have otherwise expanded the nexus net), including Arizona, Illinois and Tennessee. It’s possible that these changes in nexus helped to increase states revenue streams after losses in 2020 due to the pandemic.  Even a little tweak can have significant ramifications!

SaaS Taxation Legislation Changes

We routinely share SaaS taxation updates in our weekly blog articles, as it is a fairly new topic and an issue we help many of our clients with.

In 2021, Maryland began to tax SaaS and digital products. Up until March 14, when House Bill (HB) 932 was enacted, digital products in the state were not subject to sales and use taxation.

Now, e-books, songs and movies along with SaaS are subject to these taxes.

Taxation Of Remote Workers

COVID-19 completely changed the way that we work, and for a lot of people working from home has become their new reality. As a result, the taxation of remote workers has changed in the last two years. Typically, remote workers that live in a different state than where they work can create nexus (the amount of contact from a company needed to be obligated to collect sales tax in that state).

Throughout the pandemic, however, many states have chosen not to assert nexus on the companies whose employees were working remotely due to the pandemic.

Check out our previous blog article on the subject to see some of the specific updates that happened in 2021 regarding taxation of remote workers.

Have a question? Contact Monika Miles, Miles Consulting.

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