Summary of Key Tax Provisions in Historic CARES Act Legislation

Posted in Federal Tax

On March 27, President Trump signed the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), which advances legislation intended to help Americans and businesses survive a public health and economic crisis due to COVID-19. This article provides a summary of key tax provisions in the CARES Act.

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Federal Government Responds to Coronavirus with Tax Measures

Posted in Federal Tax

The federal government has enacted two tax measures to combat the financial downturn resulting from the coronavirus pandemic. The President signed into law a bill that includes a 100 percent payroll tax credit for certain employers providing COVID-19 related sick and family leave wages for employees. In addition, the IRS has issued an extension for the payment of Federal income taxes and for filing such tax returns. Continue Reading

SALT Response to COVID-19

Posted in Alabama, California, Colorado, Connecticut, District of Colombia, Florida, Illinois, Indiana, Iowa, Kenntucky, Louisiana, Maryland, Michigan, Minnesota, New Mexico, New York, North Carolina, Oregon, Pennsylvania, Refund Claims, South Carolina, Utah, Washington

As we practice social distancing during the COVID-19 (“coronavirus”) outbreak, our state and local governments, like the federal government, are working through their response to the outbreak. The most common response by state and local governments has been the extension of filing and payment deadlines, however, some states are responding in other ways such as promising to assist with small business loans or changing the qualifications for unemployment benefits. Continue Reading

SCOTUS to decide who gets a consolidated group’s tax refund when a bankruptcy intervenes?

Posted in U.S. Supreme Court

The U.S. Supreme Court heard oral arguments on December 3, 2019 in Simon E. Rodriguez v. Federal Deposit Insurance Corp., 18-1269 (Sup. Ct.). At dispute in the case is whether a $4.1 million tax refund belongs to a failed bank (the FDIC, as receiver for defunct United Western Bank) or its corporate parent in bankruptcy (Rodriguez, as trustee for United Western Bancorp Inc.). The Supreme Court granted certiorari in Rodriguez to decide whether state law or federal common law decides who owns the tax refund, but at oral argument, it became apparent that the issue may not be the subject of, in the words of Justice Ginsburg, “adversarial confrontation” and thus improper to decide in the context of this case. Continue Reading

Kansas Surprises By Removing Nexus Thresholds and Seeks to Create Rebirth of “Slightest Presence” Nexus

Posted in E-Commerce, Nexus

The Kansas Department of Revenue recently released Notice 19-04 (the “Notice”) which provides that all remote sellers making sales into the state are required to register for and begin collecting and remitting sales and use tax effective October 1, 2019, raising significant Constitutional concerns. Notably, the Notice cites no transaction or dollar thresholds for determining remote seller nexus with Kansas. The only predicate for nexus is that the remote seller makes a sale of tangible personal property or services to a customer located in the state. Continue Reading

New Hampshire Passes Anti-Wayfair Remote Tax Legislation

Posted in E-Commerce, Sales Tax

Most states impose sales or use tax on tangible personal property sold or consumed in the state. However, five states – Alaska, Delaware Montana, New Hampshire, and Oregon – do not impose such a tax. In its landmark South Dakota v. Wayfair decision, the U.S. Supreme Court ruled that out-of-state sellers can be required to collect and remit tax on sales into another state in which the seller had no physical presence. The response from New Hampshire was swift and to the point. Governor Chris Sununu immediately tweeted that the Court’s ruling was “outrageous” and that “if they think we are just going to take this without a fight, well then they have another thing coming.” Continue Reading

Arizona v. California: A Clear Case of “Passive Aggressiveness” in the State Taxation of Nonresidents

Posted in Arizona, California, U.S. Supreme Court

The State of Arizona has asked the Supreme Court of the United States to hear a challenge to the State of California’s taxation of nonresident members of California LLCs and nonresident shareholders of California corporations.  The crux of the dispute relates to California’s “doing business” tax on all entities that conduct business in the State.  The tax is a flat $800 for limited liability companies and is a minimum of $800 for corporations.  Arizona asserts that California’s aggressive efforts in taxing nonresident passive investors violates the Due Process Clause and the Commerce Clause of the U.S. Constitution.  If the Court decides to hear the case, a ruling in Arizona’s favor would have an unquestioned impact on the state and local taxation of nonresidents. Continue Reading

Nothing to See Here? – Kaestner Trust Decision Leaves Many Unanswered Questions

Posted in North Carolina, Residency

The U.S. Supreme Court recently issued its decision in North Carolina Department of Revenue v. Kimberley Rice Kaestner 1992 Trust.  The Court unanimously determined that the residency of in-state beneficiaries alone is an insufficient basis for a State’s taxation of trust income where (1) the beneficiary did not receive distributions of trust income, (2) the beneficiary had no right to distributions of trust income, and (3) it was uncertain if the beneficiary would ever receive trust distributions.  The Court concluded that a State’s imposition of tax in such circumstances violated the Due Process Clause of the Fourteenth Amendment to the U.S. Constitution. Continue Reading

Notable Changes to Florida Tax Law

Posted in Florida, Sales Tax, Use Tax

The Florida legislature recently wrapped up its 2019 session. Of particular note, the following tax law changes were enacted.

Documentary Stamp Tax – Deeds between Spouses

Florida imposes a surtax – referred to as the “documentary stamp tax” – on real estate deeds based upon the consideration paid for the transfer. Mortgage indebtedness on the property is always treated as consideration paid, even if the debt is not assumed by the acquiror. Exempt from this surtax were deeds of homestead property between spouses. However, this exemption only applied to deeds given during in the first year of marriage. Continue Reading

A Case of History Repeating Itself: State Taxation of Transportation Related Companies

Posted in Georgia, Ohio, Sales Tax, Transportation

During the Great Depression, the taxi industry boomed in the United States. This growth was fueled, in part, by the fact that the industry was largely unregulated. With many unemployed and underemployed individuals in need of extra money at the time, driving a taxi was a popular pursuit. At that time, drivers used “call boxes” located on city streets to communicate directly with the dispatch center to determine where to pick up the next passenger and what to charge for the ride.  Continue Reading

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