The Supreme Court of the United States earlier today, declined to hear argument on two cases involving online retailers.1 In the cases of Overstock.com, Inc. v. NY Dept. of Taxation, et al. and Amazon.com LLC, et al. v. NY Dept. of Taxation, et al., the Court denied writs of certiorari without comment, effectively staying out of the dispute for now but leaving the status quo undisturbed. The New York Court of Appeals, the highest court in the state, had previously rejected arguments from the plaintiffs that New York is violating the US Constitution by requiring companies to collect sales tax from customers without having a physical presence in the state.
In 1992, the Supreme Court determined that physical presence is a requirement for establishing nexus between a company and a state for purposes of sales tax.2 The recent advent of state-level “Ecommerce laws” and the Federal Marketplace Fairness Act (currently held up in committee) has reignited the debate over physical presence as a requirement for Read More
A recent Washington excise tax determination points out the need for sellers to be careful when bundling retail sales taxable and service taxable activities into a single package or bundle. In Det. No. 13-0059, 32 WTD 232 (2013) the Department of Revenue held that wedding packages were subject to retail sales tax despite the inclusion of non-taxable services within the wedding package.
Do you have tax clients who run small businesses or decided to sell their household items on e-bay this past year? Or perhaps you are a CPA who accepts credit card payments from your clients? If so, you may have already received a notice from the IRS or should be aware of the latest updates on the IRS push for information matching with Form 1099-Ks (Payment Card and Third Party Network Transactions). Some AICPA members have received 1099-K mismatch notices assessing thousands of dollars in penalties.
On June 27, 2013, the California State Assembly passed AB 93, which eliminates the current Enterprise Zone (EZ) program, replacing it with a new set of incentives, which will be statewide in application. This change requires businesses to take action now to get the most out of existing credits while also preparing to take advantage of the new credits that will be effective January 1, 2014.
There are instances where a client cannot pay their bill. When this happens, some business owners will look to the goods or services provided by the client in her business, to see if a trade can be made to satisfy the debt. While most business owners would rather be paid for services rendered, a new copy machine, air conditioner or janitorial services are better than a past due account. However, what many taxpayers forget is that the value for the services exchanged is treated just like a cash payment, for income tax purposes. Consider a scenario where an attorney provides services to a client who owns a luggage store; the amount billed for legal services is $5,000. If the client offers $5,000 in luggage instead, then both the attorney and the luggage store owner must reflect $5,000 in income in the transaction. This is true whenever bartered services are made between businesses (except corporations) of $600 per more, per year. The payments are reported on Form 1099-MISC. For more information, view the IRS’ Bartering Tax Center 
I have been writing ad nauseum for the past few years on the Online Travel Company (“OTC”) debate. Being that my home state of Florida relies so heavily on the tourism industry, this has been a pressing issue for some time. It was reported this week by the Washington Post and BNA Tax that the debate has drawn national attention. Specifically, an influential task force known as the National Conference of State Legislatures (“NCSL”) examined the issue in an attempt to achieve national uniformity.
Reportedly relying on trade groups, taxpayers, industry, and state governments the House Judiciary Committee announced seven basic principles on remote sales tax collection. Chairman Goodlatte made the announcement to allegedly begin the discussion on the looming problem of Internet sales tax.
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