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Tag Archive for Sales and Use Tax

Shocking Court Cases In Texas: Franchise Tax, Sales & Use Tax, Miscellaneous Gross Receipts Tax, Beverage Tax

Shocking Court Cases In Texas: Franchise Tax, Sales & Use Tax, Miscellaneous Gross Receipts Tax, Beverage Tax

Court Cases

Franchise Tax

Apportionment

Conagra Brands, Inc. v. Hegar, No. 03-21-00111-CV (Tex. App.—Austin Aug 24, 2022, no pet. h.)—The Third Court of Appeals held that a taxpayer could not include gross receipts from certain securities in its apportionment-factor denominator for purposes of calculating its Texas franchise tax.[1]

  • The taxpayer in question was in the business of producing food products for sale to grocery stores, convenience stores and food service businesses. In order to mitigate the risks associated with potential fluctuations in the price of necessary components and raw materials, the taxpayer bought and sold commodity futures contracts.
  • The taxpayer argued that these securities were inventory for federal tax purposes and that the gross proceeds from the sale of these securities should be included in its apportionment factor denominator. On appeal, however, the taxpayer didn’t dispute the trial court’s finding that the securities weren’t inventory as defined in the Internal Revenue Code. Instead, the taxpayer argued that the securities were in substance inventory under the U.S. Supreme Court’s decision in Corn Products Refining Co. v. Comm’r, 350 U.S. 46 (1955).

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Maryland Tax And Business Climate

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 17th 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.

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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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State Tax Issues Associated With Troubled Companies: Part Two- Sales and Use Taxes

State Tax Issues Associated With Troubled Companies: Part Two- Sales and Use Taxes

Sales taxes are often overlooked when a company is experiencing an economic crisis.  Given that some jurisdictions can have rates over 10%, this can be very costly at a time when a company can least afford this expense.  With the exception of bankruptcy situations, there are no “special” rules with regard to sales or use taxes when a company is experiencing financial difficulties.  So, how can a troubled company minimize their sales and use tax obligations?

The following highlights several areas that should be reviewed for possible opportunities.

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Wayfair Bills Are On the Horizon Despite Disruptions

Wayfair Bills Are On the Horizon Despite Disruptions

As a result of the COVID-19 pandemic, many states have postponed legislative sessions due to health concerns and to abide by current social distancing recommendations from the Centers for Disease Control and Prevention (CDC).

However, despite these disruptions, lawmakers from several states are still prioritizing legislation related to South Dakota v. Wayfair, which established precedent for economic nexus. These states have been late to the table on such legislation or clarification.

Kansas

After the Wayfair ruling, the Kansas Department of Revenue (DOR) stated all remote sellers, regardless of size, would be required to collect sales and use taxes starting October 1, 2019. However, the Kansas Attorney General determined the Kansas DOR does not have the authority to implement such requirements without providing safe harbor for small sellers. In response, the Kansas DOR disagreed, leaving remote sellers without clear guidance.

In an effort to provide additional direction and address the taxation of digital sales, Kansas lawmakers have introduced two bills.
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3 Important Sales Tax Predictions To Watch For In 2020

MONIKA MILES

The world of sales tax has changed a lot in the past year. Following the Supreme Court’s Wayfair decision, 2019 was the year most states began requiring businesses to collect and remit sales tax, and then began making marketplace facilitators (such as Amazon or eBay) responsible for collecting and remitting the taxes on sales that came through their marketplaces.

What changes can we expect to see this year? Keep reading for three predictions we believe are just around the corner.

3 Sales Tax Predictions For 2020
1. Smaller Retailers Will Depend On Marketplaces
As Greg Chapman, SVP of business development at Avalara explains, “We should expect traditional ecommerce providers to start working closely with marketplaces or offering more ‘Amazon-like’ experiences to stay relevant.”

The increase in online shopping coupled with confusing economic nexus laws make it even more appealing for very small businesses up to mid-sized companies to work with online marketplaces. In addition to facilitating sales in a process that’s more streamlined for customers, a lot of states have placed the burden of sales tax collection on the marketplace rather than the seller. This can greatly reduce the cost and risk of doing business online for companies struggling to navigate tricky taxability questions.
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Wisconsin And Wyoming State Sales And Use Tax

Aaron Giles

Wisconsin State Sales And Use Tax

The state of Wisconsin levies a 5% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions can impose additional sales taxes of 0.6%. The range of total sales tax rates within the state of Wisconsin is between 5% and 5.6%.

Use tax is also collected on the consumption, use or storage of goods in Wisconsin if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of Wisconsin on or before the 20th day of February. For more information on Wisconsin sales tax exemptions please visit the sites shown below.
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Washington D.C. And Washington State Taxes

Aaron Giles

Washington DC Sales And Use Tax

The District of Columbia, Washington D.C., levies a 5.75% state sales tax on the retail sale, lease or rental of most goods and some services. There are no additional local sales taxes in Washington D.C.

Use tax is also collected on the consumption, use or storage of goods in Washington D.C. if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the District of Columbia on or before February 20th.

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Virginia And West Virginia State Sales And Use Tax

Aaron Giles

Virginia State Sales And Use Tax

The state of Virginia levies a 4.3% state sales tax on the retail sale, lease or rental of most goods and some services. All local jurisdictions impose additional sales taxes of 1% to 1.7%, therefore the total sales tax rate within the state of Virginia could be as high as 6%.

Use tax is also collected on the consumption, use or storage of goods in Virginia if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of Virginia on or before the 20th day of February.

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Utah And Vermont State Sales And Use Tax

Aaron Giles

The state of Utah levies a 4.65% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions impose additional sales taxes ranging between 1.3% and 3.4%. The range of total sales tax rates within the state of Utah is between 5.9% and 8.1%.

Use tax is also collected on the consumption, use or storage of goods in Utah if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the last day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of Utah on or before the last day of February.

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South Carolina And South Dakota Sales And Use Tax

South Carolina Sales And Use Tax

South Carolina State Sales And Use Tax

The state of South Carolina levies a 6% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions impose additional sales taxes up to 2.5%. The range of total sales tax rates within the state of South Carolina is between 6% and 8.5%.

Use tax is also collected on the consumption, use or storage of goods in South Carolina if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of South Carolina on or before the 20th day of February.

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Pennsylvania And Rhode Island State Sales And Use Tax

Pennsylvania Sales And Use Tax

The state of Pennsylvania levies a 6% state sales tax on the retail sale, lease or rental of most goods and some services. Local jurisdictions impose additional sales taxes up to 2%. The range of total sales tax rates within the state of Pennsylvania is between 6% and 8%.

Use tax is also collected on the consumption, use or storage of goods in Pennsylvania if sales tax was not paid on the purchase of the goods. The use tax rate is the same as the sales tax rate. Returns are to be filed on or before the 20th day of the month following the month in which the purchases were made. For example, purchases made in the month of January should be reported to the state of Pennsylvania on or before the 20th day of February.
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