Today, the U.S. Supreme Court issued its decision in South Dakota v. Wayfair, overturning Quill Corp. v. North Dakota, 504 U. S. 298 (1992) and National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U. S. 753 (1967), that required businesses to have a physical presence in a taxing jurisdiction in order to … Continue Reading
In a narrow 5-4 decision, the Court in South Dakota v. Wayfair, Inc. overruled its long-held precedent and held that under the Commerce Clause physical presence is no longer the touchstone for sales tax nexus. Dating back to its decision in National Bellas Hess in 1967, the Court had been clear that a state sales … Continue Reading
Sales and use tax compliance is complicated. Both sellers and purchasers are required to determine where they have nexus, where the purchased products or services should be sourced, and whether the product or service itself is subject to tax. While this sounds simple enough, in practice, it is extremely difficult.… Continue Reading
Limited tax amnesty programs gain popularity every few years and this is one of those years. The Alabama legislature has joined the growing list of states providing amnesty programs for taxpayers with unreported tax liabilities. The Tax Delinquency Amnesty Act of 2018 was recently passed and will be in effect from July 1, 2018, to … Continue Reading
Businesses were pleasantly surprised to learn that the Illinois Secretary of State reduced Limited Liability Company (“LLC”) filing fees following the passage of Senate Bill 867. This bill was passed in both houses on November 7, 2017 and went into immediate effect upon signature by the governor on December 20, 2017. The fee reduction is … Continue Reading
The Illinois legislature recently mandated electronic filings for certain sales and use and withholding income tax filings as of January 1, 2018. H. B. 0821 was passed in both houses by May 2017 and signed into law on August 24, 2017 by Governor Rauner creating Public Act 100-0303. In September 2017, the Illinois Department of … Continue Reading
The United States Supreme Court has recently agreed to hear oral argument in South Dakota v. Wayfair, Inc. – a case exploring the boundaries of sales and use tax nexus. The crux of the dispute in Wayfair relates to the defining purposes and protections of Commerce Clause of the U.S. Constitution. Much of the discussion … Continue Reading
It has long been the law of the land that a taxpayer must have a discernable physical presence in a state before it can be required to collect and remit sales and use taxes. The U.S. Supreme Court reaffirmed this bright-line test in the 1992 case of Quill Corp. v. North Dakota. In Quill, the … Continue Reading
The cornerstone of any taxing regime is the situsing of receipts. The taxpaying public must have certainty regarding when its income is subject to tax in a jurisdiction. Recent rulings from the Ohio Department of Taxation (the “Department”) regarding the situsing of receipts for the Ohio Commercial Activity Tax (“CAT”), however, inject ambiguity into what … Continue Reading
Since the landmark decision of Quill Corp. v. North Dakota in 1992, the law of the land has been that an out-of-state business has sales and use tax nexus with a state only when it is a physical presence. This physical presence can manifest itself in several ways – real or personal property sitused or … Continue Reading
The California legislature has voted to strip the Board of Equalization of all powers and duties except for those originally given to it by constitutional amendment in 1879. Over time, the board received the statutory authority to administer the California sales and use tax and many other state taxes and fees. The Board also was … Continue Reading
Taxpayers routinely use pass-through entities (PTEs) such as limited partnerships, limited liability companies, or S corporations to conduct multistate business. Because most states conform to federal law, there is no entity-level tax on the PTE. Instead, states seek to tax the owners of the PTE on the income received – or passed-through – from the … Continue Reading
The Supreme Court of Missouri recently held that TracFone, a Miami-based telecommunications company, was not entitled to claim a statutory sales tax exemption relating to retail sales “in commerce.” TracFone purchased “air time” from national carriers for resale. The “air time” and a TracFone handset were sold to Missouri residents in prepaid packages. All handsets … Continue Reading
In his fiscal year 2018 budget proposal, Massachusetts Governor Charlie Baker proposes a somewhat novel approach to the collection and remittance of sales taxes. Specifically, the Massachusetts Governor is proposing same-day collection and remittance. How is this possible? You ask? Through the assistance of third-party credit card processors. The thought is that at the time … Continue Reading
