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Tag Archive for nexus

California: Relief For Marketplace Sellers?

Monika Miles

The state of California is at it again! But this time offering some relief for out of state sellers. In a continuing quest to require out of state sellers who created nexus as a result of engaging in programs like Fulfillment by Amazon (FBA) to register and retroactively file in the state, CA has passed SB 92 and the California Department of Tax and Fee Administration (CDTFA) has issued guidance. On July 1, 2019, the CDTFA issued Special Notice L-681 pertaining to Senate Bill 92 that discusses a special tax relief program. This program is only available for “qualifying retailers.”

Who Qualifies?

A “qualifying retailer” is a marketplace seller that meets certain requirements. Please note that all of the following conditions must be met:

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Sleeping Giants Awaken: California, Texas And Wayfair

Monika Miles - What Is Nexus.

In the United States, the sales tax landscape has changed drastically due to the recent U.S. Supreme Court Case of South Dakota v. Wayfair (June 2018). Following this landmark decision which made it easier for companies to create nexus in states, many states have enacted legislation which establishes guidelines, thresholds for economic nexus. In a previous blog, we talked about this epic decision.

What is Economic Nexus?

In the past, companies needed to have physical presence, or “boots on the ground,” in a state in order to have nexus (or taxable presence) in a state. This meant that a company needed to have offices, inventory, employees, or contractors in a state for a certain amount of time. Companies now don’t necessarily need to have physical presence in a state for them to create nexus; they now can have nexus in a state by virtue of economic nexus. Economic nexus essentially means that companies with sales of a certain dollar amount or a certain number of transactions with a state are required to register, collect and remit sales tax. Some states require both criterion. Additionally, note that some states base their economic threshold on taxable sales, while other states mention gross sales.

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What You Need To Know About The Taxability Of Software As A Service (SAAS) In Western States

Monika Miles, SAAS And Cloud Computing And Taxes

When it comes to Software-as-a-Service (SaaS) companies, there’s often confusion regarding both nexus and the taxability of this revenue stream.

And while the recent Wayfair decision seems like it’s directed only at online sellers, traditional multi-state sellers (including those that generate revenue from SaaS and software) will also be affected, as nexus will be easier to establish. Once it is established – either by traditional physical presence or by sales volume, then companies will need to consider the taxability rules of SaaS in each state in which they have nexus.

Is SaaS even taxable? Because SaaS and cloud computing doesn’t always clearly fall into existing tax definitions, different states interpret its taxability in different ways. Some regard it as similar to electronically downloaded software, while others consider it a service, which may be taxable or not. And what about electronically downloaded software? Is it treated differently from SaaS?

This series will take a look at how key states in various regions of the country interpret SaaS, cloud computing and electronically downloaded software within their different state tax statutes. First up, the “Western” states: CaliforniaUtah and Washington!

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How Did Washington Expand Nexus? State Tax Legislation

Over the last few years, Washington has taken an interesting approach to its nexus and state tax law. Back in 2015, it adopted a click-through statute and economic nexus thresholds for businesses making sales in the state. Washington currently has a few other interesting bills up for debate, but in the meantime the Department of Revenue (DOR) enacted another piece of legislation that affects economic nexus. Read more

Amnesty Program Directed At FBA Sellers

There is a new scheduled amnesty program that may help businesses correct overlooked tax obligations if they have been selling products and services in other states. Many companies engage in multi-state sales through an intermediary, like Amazon, eBay and similar organizations called “fulfillment services.” The fulfillment centers place a seller’s inventory in warehouses in multiple states to expedite shipping, but in the process, create nexus for the seller in those states. As such, the sellers have an obligation to collect sales tax and pay income tax. Unfortunately, unpaid taxes may incur penalties and interest. Now there may be a short time window to correct these errors and avoid interest and penalties. Read more

Ohio’s New Online Sales Tax: Cookies Creating Nexus?

What do cookies, nexus and online sales tax have to do with each other? States are continuing to look for ways to justify charging sales tax to internet retailers; Ohio just took a page out of Massachusetts’ book.

Massachusetts’ Online Sales Tax Directive 17-1

A couple of weeks ago we shared that Massachusetts created a directive that redefined nexus to include internet cookies, Read more

Your Practical Guide To Motion Picture And Television Production Tax Incentives – July 2017

Peter Scalise

Motion Picture and Television Production Tax Incentives (hereinafter “MPIs”) are tax incentives that are available at the U.S. Federal Level, at most of the U.S. Multi-State Levels, and on a Global Level through nearly a hundred participating countries worldwide and should certainly be incorporated into the tax planning process for movie and television studios to properly tax affect their costs of production.  Read more

It’s All Greek To Me!- Multistate Tax & Foreign Companies

I just returned from an amazing vacation – a cruise of the Mediterranean. We started in Athens, Greece; spent just a couple days there enjoying the history, and then boarded our ship.  The cruise took us to the Greek isles of Santorini and Crete, and then we sailed to Italy, the beautiful St. Tropez, France, and finally Barcelona, Spain. We finished our vacation by sampling many, many tapas and wines in Barcelona. About midway through our vacation, I found myself wondering – how could I do U.S. multistate tax consulting somewhere in Europe?  I’m still working on that angle, and will certainly keep you posted. Read more

3 Important Tax Facts For Medical Device Companies

Monika Miles

If you’ve been following these series about multi-state tax facts, you know we’ve already covered software and SaaS companies. What about medical device companies?

Because the term “medical device” covers a wide range of instruments, machines, accessories or other tools that can be used both externally (such as tongue depressors) or internally (like pacemakers), there are a lot of multi-state tax questions that arise in this industry.

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Multistate Tax: The Top 3 State Tax Issues For 2017

Monika Miles

Happy New Year!

I always like the fresh feeling of a New Year – a clean desk, a new calendar, and a relaxed and grateful frame of mind from coming off of the holidays. I’m particularly excited about 2017 because it’s a year of special milestones and anniversaries for me – both personally and professionally, and I’m a big believer in celebrating those special occasions. I’m not sure exactly what the year will bring, but I have big expectations for it.

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Nexus News: The Latest From Ohio And South Carolina

Monika Miles

As lawmakers continue to debate how to make online sales tax feasible for the whole country, the issue of nexus continues to reign supreme for states attempting to increase their revenue from internet retailers. The latest in nexus news comes out of Ohio and South Carolina, two states that recently released details about how nexus is defined in their states.

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A Spotlight on Movie Production Tax Incentives

Introduction

Whether you’re a publicly held movie studio conglomerate producing and distributing substantial numbers of films annually commanding significant shares of box office revenues worldwide or an independent filmmaker, movie production tax incentives should certainly be considered and incorporated into the tax planning process to properly tax effect the cost of filmmaking.

Synopsis of Movie Production Tax Incentives

Movie Production Tax Incentives (hereinafter “MPIs”) are tax benefits offered on a state-by-state basis throughout the United States to entice, as applicable, in-state qualified phases of Read more