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Archive for Monika Miles

20 Sep 2022

Written by Monika Miles | Posted in Nexus And Remote Employees • Remote Workers Tax Liabilities

Returning To The Office? Important Information To Understand Your State Tax Liabilities

When the pandemic first hit, many businesses were forced to transition to a remote working model for safety reasons. And many of those remote employees decided to move away from their “home state” for a variety of reasons. Now, businesses are starting to transition back to the office, with 50% of leaders saying their company already requires or is planning to require a return to in-person full time this year, according to a study from Microsoft.

Whether you decide to bring your employees back to the office full time or just part time, what are the tax implications you should consider? Please note that this blog post won’t get into the state tax withholding, worker’s compensation or other payroll tax matters related to the employee directly. We focus here on how employees may create nexus (and filing responsibilities) for both state sales tax and income tax.

Taxation Issues Created By Remote Workers

No comments | Tags: nexus, Remote Workers Tax Liabilities

06 Sep 2022

Written by Monika Miles | Posted in State Sales Tax

Sales Tax Confusion: What You Need To Know Now

Gray Areas In State Sales Tax: What You Need To Know Now

Tax legislation can be difficult to understand. It is not black and white; individuals sometimes interpret the same law in different ways. While most people can agree on the basics of sales tax laws , there are plenty of gray areas as the laws get more specific, especially if you are new to multistate sales tax compliance. In this blog article, we look at two areas of sales tax that often cause confusion: the taxation of digital products and services.

Digital Products & Sales Tax Confusion

SaaS and sales tax may at first seem like a straightforward area of taxation, but if you have kept up on our other blog articles linked here and here, you know it can get confusing quickly.

For example, we worked with a client who developed a product on a platform they charge a subscription for, so it sounds like it would fit into a SaaS category. But given the way their customers interact with the product, it also could be categorized as an information service.

No comments | Tags: state sales tax

01 Sep 2022

Written by Monika Miles | Posted in Non-Fungible Tokens • Sales Tax

Non-Fungible Tokens (NFT) And Digital Product Sales Tax Clarification

As the 2021/2022 fiscal year ended on June 30, many states implemented sales tax legislation reforms. In this blog article, we share a few standout updates you should know about.

Washington State Department of Revenue & NFT Sales Tax

NFTs, or non-fungible tokens, have been around since 2014, but started gaining momentum in 2021 and have only risen in popularity since. As you can imagine, this has created some sales tax confusion.

Washington state is one of the few states to tackle the taxiblity of NFTs, and on July 1, 2022, the Washington State Department of Revenue published an interim statement on how sales tax applies to NFTs. The statement is “intended to provide general information related to the taxability of certain transactions involving NFTs and does not intend to address any exemptions, exclusions, deductions, credits or other incentives that may apply.” The interim statement functionally defines NFTs as a digital code.

No comments | Tags: Non-Fungible Tokens, sales tax

25 Aug 2022

Written by Monika Miles | Posted in Maryland Business • Sales/Use Tax

Maryland Tax And Business Climate

This month we travel to the birthplace of religious freedom in America, the mid-Atlantic state of Maryland. Formed by George Calvert in the early 17^th Century, the state was intended as a refuge for persecuted Catholics from England. George Calvert was the first Lord of Baltimore and the first English proprietor of the then-Maryland colonial grant. Maryland was the seventh state to ratify the U.S. Constitution and played a pivotal role in the founding of Washington D.C., which was established on land donated by the state.

Maryland is defined by its abundant waterways and coastlines on the Chesapeake Bay and Atlantic Ocean. Its largest city, Baltimore, has a history as a major seaport, and is also home to such tourist attractions as the National Aquarium and the Maryland Science Center.

No comments | Tags: Maryland Business Climate, Maryland Tax, Sales and Use Tax

14 Jul 2022

Written by Monika Miles | Posted in Sales Tax Complications • Sales Tax Marketplace Facilitators

Huge Sales Tax Questions Every Marketplace Facilitator Should Consider

A marketplace facilitator (or “MPF”) is a business or organization that contracts with third parties (“sellers”) to sell goods or services on its platform, facilitating the sales that arise (such as Amazon or Etsy). As the name seems to indicate, these companies facilitate sales of goods or services between a seller and a buyer – but generally the MPF does not take title to or even carry the inventory. Following the 2018 South Dakota vs. Wayfair U.S. Supreme Court decision eliminating the physical presence standard for sales tax nexus, most states have in the last 4 years started requiring the marketplace facilitators to collect and remit the sales tax on behalf of the third party sellers. This places a burden on MPFs to be the company which collects and remits and reports the sales tax to the various states in which they’ve established nexus.

However, not all marketplace facilitators are as large as Amazon or Etsy, and in their haste to pass laws to incorporate filing requirements on marketplace facilitators, many states didn’t give much consideration to businesses that might be outside the “norm” of simply facilitating the sale of tangible property on the marketplace.

No comments | Tags: Sales Tax Complications, Sales Tax Marketplace Facilitators

24 Jun 2022

Written by Monika Miles | Posted in California • Sales And Use Tax • Sales And Use Tax Manufacturing Exemption

Update To The California Partial Manufacturing Sales And Use Tax Exemption

Since 2014, qualified companies have been eligible for a partial exemption from sales tax for purchases of machinery and equipment used in qualified manufacturing and research and development activities. California was late to the table, as most states have long had exemptions for such purchases. The exemption has also been unique in that it has been a partial exemption, and allowable only on the first $200 million of qualified purchases.

Now, Assembly Bill 1951 would expand the exemption to a full exemption (rather than partial). According to the legislative language, “This bill would on and after January 1, 2023, and before January 1, 2028 make this a full exemption for purchases not exceeding $200,000,000. The bill would repeal these provisions on January 1, 2028 and would revert to the above-described partial exemption on that date.”

So, why make these changes now? As the bill points out:

No comments | Tags: California, Sales And Use Tax Exemption

17 Jun 2022

Written by Monika Miles | Posted in Colorado Sales Tax Update

Important Colorado Sales Tax Changes Retailers Need To Know Now

Sales tax legislation is constantly evolving, and while the changes can be complex and difficult to keep up with, sometimes the legislation is actually an attempt to simplify the sales tax obligations already present in the state. Colorado is one state that is working on changing their complex sales tax legislation.

After being introduced in January of 2022, Senate Bill 22-032 was signed by Colorado Gov. Jared Polis in April. This bill outlines several changes to Colorado’s tax code, which we discuss in detail below.

The Complexities Of Colorado State Sales Tax

Back in February, we wrote an article about the sales tax process in Louisiana, where retailers are required to collect and remit sales tax in each parish (or county) in addition to the state level. In that article, we broke down the lawsuit that Halstead Bead Inc. filed against the state, which stated that requiring businesses based out of other states to file reports in each parish creates a “compliance nightmare.”

No comments | Tags: Colorado Sales Tax Update

07 Jun 2022

Written by Monika Miles | Posted in Tax Legislation Updates From 2022 You Need To Be Aware Of • Tax Updates 2022

Tax Legislation Updates From 2022 You Need To Be Aware Of

Tax legislation is constantly evolving, and it can be nearly impossible to keep track of all the nuances. That’s why, for our multistate readers, we believe it’s helpful to have a state tax consulting partner to help. It is crucial to stay as up to date as possible to ensure you meet all of your sales (and other state) tax obligations. In this article, we dive into some of the most relevant 2022 tax reforms we have seen so far this year.

Kansas Food Tax Reform

Back in December, we published an article about Kansas Gov. Laura Kelly’s plan to introduce a bill to “Axe the Food Tax” and completely eliminate sales tax on groceries in the state. In the beginning of May, the Kansas Legislature passed a bill with strong support from both parties to gradually decrease the tax over the next three years.

The first sales tax decrease from 6.5% to 4% will go into effect in the beginning of 2023, will drop from 4% to 2% in 2024 and will be eliminated entirely by the beginning of 2025.

Some foods do not qualify and will still be taxed at the same rate. For a full list of items which remain subject to tax, check out this link, but they include prepared foods, alcoholic drinks and food sold with eating utensils.

Other states, including Illinois, Oklahoma and Tennessee, are considering proposals to temporarily suspend sales tax on groceries as well.

No comments | Tags: Tax Legislation Updates From 2022 You Need To Be Aware Of

25 May 2022

Written by Monika Miles | Posted in Collecting And Remitting Sales Tax • TaxConnections

Important Distinctions Between Collecting And Remitting Sales Tax For New Business Owners

We are often approached by newer business owners who may recently have started an e-commerce site or other business and whose sales are ramping up. Sales tax compliance is a topic that comes up quickly in these circumstances. As our company, Miles Consulting, celebrates its 20 years in business this year, it’s always exciting to me to help start-ups envision their dreams.

There are many words you might not often hear if you are not in a tax-related field, but as a new business owner, it is crucial to understand their meanings to ensure sales tax compliance. Today, we are going to look at a couple of these words — “remit” and “collect,” and break down how they differ when it comes to tax compliance. Keep reading to learn how to make certain you are meeting all of your business’s sales tax collecting and remitting obligations.

Sales Tax Process For New Business Owners

No comments | Tags: Collecting And Remitting Sales Tax

18 May 2022

Written by Monika Miles | Posted in Connecticut Taxes

State Of 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.

No comments | Tags: Connecticut Taxes

06 May 2022

Written by Monika Miles | 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

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?

No comments | Tags: SaaS Update, Tax Update On Software As A Service

27 Apr 2022

Written by Monika Miles | 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

No comments | Tags: Non-Fungible Tokens, sales tax

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Archive for Monika Miles

Returning To The Office? Important Information To Understand Your State Tax Liabilities

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Sales Tax Confusion: What You Need To Know Now

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Non-Fungible Tokens (NFT) And Digital Product Sales Tax Clarification

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Maryland Tax And Business Climate

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Huge Sales Tax Questions Every Marketplace Facilitator Should Consider

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Update To The California Partial Manufacturing Sales And Use Tax Exemption

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Important Colorado Sales Tax Changes Retailers Need To Know Now

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Tax Legislation Updates From 2022 You Need To Be Aware Of

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Important Distinctions Between Collecting And Remitting Sales Tax For New Business Owners

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State Of Connecticut Tax Business Climate

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

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