Washington – New Resale Permits for 2010

Without a new reseller permit in 2010, you won’t be able to claim a resale exemption. Vendors are instructed to start taxing customers without a new permit come January 1st.

For more information: http://dor.wa.gov/content/aboutus/newsroom/html/100509.aspx

Hey Pennsylvanians, Buy a Helicopter Lately?

So, it took Pennsylvania 90 days to come up with a budget, but did you know that there were a few items (well maybe 3 if you count the pending amnesty - or maybe 4 if you count the increased Philadelphia local tax), that affected sales tax?  Among them:

1.  Pending Amnesty period coming in 2010.

2.  Philadelphia Local Sales Tax increased to 2% – totalling 8%

3.  Not such a big deal for most companies, but if you end up collecting more than 25K in sales taxes during the third quarter of 2010 (July-Sept.), come June 2011, you’ll be required to remit semi-annual sales tax payments.  A real pain in the you-know-what to do this when it first starts, but I’m sure estimates will be allowed and if you do it anywhere else (such as OH), you already know the drill.

4.  THE BIG DEAL (input sarcasm here):  EFFECTIVE IMMEDIATELY – if you purchase a helicopter or any other kind of rotocraft, you do not have to pay the 6% sales tax.  And, if you already owned one before they came exempt, the repairs and maintenance charges of all helicopters are now exempt as of 10/9/09.

Now, I wonder what PA company wants to buy a helicopter and they felt the need to hire  lobbyists to help save the sales taxes on it.   Turns out, that wasn’t the case at all.  You can read the real story here. 

But I still don’t get it.  The manufacturer of these helicopters is already exempt on most of what they purchase to manufacture the rotocraft - it’s called an already existing manufacturing exemption.  The sale - well that’s on the buyer to pay sales tax and the manufacturer simply remits it to the state (if they’re also the retailer) - and gets a 1% discount for collecting it.  Plus, if most of their contracts are with Federal Gov’t, they’re not collecting any sales taxes anyway.  So, no taxes collected, no taxes remitted – just a blank form to mail.  But let’s say for the sake of argument, Wal-Mart wanted one of these helicopters to house in PA- at a price of $1,000,000.  That would be $60,000 to collect and then $600 of that goes to the manufacturer for remitting it.  Just don’t get it.  And really, how many of the taxable helicopters did they plan to sell to PA domiciled companies or taxpayers?  Cause, also, if it’s shipped out of PA, it’s not taxable in PA.  I think the term “Walking Around Money” is a good one. 

 

 

NY: Driver-Only Services are NOT Transportation Services

Nor are they taxed as a Transportation Service.

This Advisory Opinion of Oct. 8, 2009, classifies a driver-only service as separate from the recently taxed transportation services. The difference? Driver-only service is just that – a company sends someone to you, but that person drives your car (or your rented car).

Whereas a Transportation Service is when both the car and the driver are provided.

Notice the last paragraph, though, where NY warns that if Rental Car Companies and Driver Services are noticed to be in cahoots with each other, then that could make the driver service company the same as a Transportation Service. Someone is thinking ahead on this one!

CT Sales Tax Exemption on Fuel Efficient Vehicles

http://www.ct.gov/drs/lib/drs/publications/pubsip/2009/ip09-27.pdf

This link is to the Connecticut Informational Publication regarding the Sales and use Tax Exemption for Purchases or Leases of Fuel-Efficient Passenger Motor Vehicles.

The exemption started back in January ’08 and runs through June, 2010. The exemption applies to both new and used motor vehicles whether purchased from a dealer or not. Motorcycles do not qualify, as Connecticut does not consider them to be a passenger motor vehicle. To qualify, the vehicle must get an estimated City OR highway rating of 40 mpg as determined by the USEPA (U.S. Environmental Protection Agency).

If you purchase the auto, it is not subject to sales tax. If you lease the auto, only the payments within the given period of allowable exemption will be exempt from sales tax. Therefore, if you have lease payments after June, 2010, those payments will be subject to the sales tax.

The CT publication lists qualifying used autos, Pre-2009 (which starts on page 3) and as old as 1990. A curious observation: U.S. Automakers Chevy and Pontiac had 3 models that qualified in the 90’s and none that qualify since 1999. And we wonder why Foreign automakers have a leg up on us in the auto industry here in the United States. And, that’s all I have to say about that.

Alternatively, 2009 model year autos that meet the 40mpg constriction can be found here: http://www.fueleconomy.gov/feg/FEG2009.pdf

2010 here: http://www.fueleconomy.gov/feg/FEG2010.pdf

Or, if you’d like to not muddle through all the fascinating fuel economy information about all cars, you can pick and choose the model year, make and model beginning here: http://www.fueleconomy.gov/feg/findacar.htm

Connecticut – “May” be lowering sales tax rate next year

UPDATE:  Looks unlikely that the CT rate will drop in 2010.  See Press Release here.

The general sales tax rate in Connecticut is to be lowered to5.5 percent effective January 1, 2010 (currently @ 6%). However, if the state’s general fund tax revenue for the 2010 fiscal year is +/=1% less than the 2010 fiscal year estimate of the legislature the sales tax rate will remain unchanged.

And, if the rate is reduced to 5.5% on 1/1/10 the state’s general fund tax revenue cannot fall 1% below the legislature’s estimate prior to June 30, 2010, or the rate will be increased back to 6 percent on July 1, 2010.

So, as with many things sales tax: CT tax might go down on 1/1/10, or it might not. And, if it does, it might only last for 6 months. If it lasts for more than 6 months, then it’s likely to be debated again in next year’s budget and could stay reduced long term, lowered again, or maybe raised again and possibly raised higher than it is today. Make sense?!? Great, moving on…Oh how we love this stuff!!!

Recent Sales Tax Talking Points

There are a few blips that I’ve found intriguing over the last week, and felt warrant some blog-space, but none of which I care to comment on too much:

***MA – Representative who voted for the increase in alcohol sales tax found jumping the border to NH to buy tax free alcohol, LOL!!!  I’m not reporting that this is true – this guy seems to claim so, but it sure is funny!  Well it’s true… the Boston Herald reporting today:  the representative admitted buying alcohol while on a mini-vacation w/his spouse. 

***95% of companies surveyed underestimate their sales tax nexus.  Alternatively, see what Sabrix says directly:  I’ve found this trend to be fairly true in my experience. Especially with smaller businesses that do not have sales tax experts on staff. And, I hate to say it publicly, but the typical business CPA does not know sales tax like they know Income Tax. The Nexus rules are different.

***IOWA – No Sales Tax to AOL Internet Service Customers.  Can you imagine a legal case for sales taxes from transactions 14 years old? I’m glad there was a logical Court review of this. IA way overstepped its bounds. Thankfully, AOL stood its ground.

Sales Tax Holidays? Special Report

The Tax Foundation has published a report on Sales Tax Holidays throughout the U.S. 

As most know, many states pass legislation each year or have passed it for the future, to allow for various sales tax holidays where the buying public doesn’t have to pay sales taxes on purchases normally subject to the State and sometimes Local sales tax.

In general, these holidays usually come in the form of back-to-school tax holidays where consumers can purchaes items like shoes, clothes, supplies, books and even computers without paying sales tax (TX, NC , etc.).  While other states have started implementing Green holidays (GA, WV, etc.) where you can purchase energy efficient rated appliances tax free or holidays that tout the 2nd amendment for guns and rifles (LA, SC).  And then there are yet other tax holidays that appeal to people living in hurricane zones where supplies for disaster preparation are exempt (LA, FL).

D.C. to Raise Sales Tax Rate

Washington, D.C. is going to raise the sales tax rate (temporarily, they say) beginning on October 1, 2009.

The current rate is 5.75%

The new rate will be 6%.

Doesn’t seem like much, but it’s supposed to solve their budget problem. The rate hike is set to expire on Sept. 30 2012, but I’m making a prediction that in 2012 the budget process will either extend or make the new rate permanent.

And the winner is: New Hampshire (for now)

I know, I know, I’ve reported on this at least twice:  Here and Here

But, I get so excited when courts are reasonable and rule in favor of a taxpayer over an overzealous auditor or Revenue department after more funds! 

So, long story short:  MA audited a NH business who had stores in MA and NH.  This was a tire business.  So MA residents went to either NH or MA stores to get tires - often times put on their cars at the same time as the purchase.  MA decided that not only should they get the taxes from the sales of tires made in the MA stores, but if a MA customer went to a NH store, MA should also be allowed to have the NH store collect the MA tax dollars there.  Shenanigans, I say! 

Anyway, the Tire store was furious (as they should’ve been), ’cause now they’re on the hook for all of the MA sales tax that they didn’t charge on sales to customers from MA.  But, alas, the tire store fought the MA Revenue department and after a long battle (well not that long really, this all happened over the last year), the 2nd level of court appeals, MA Supreme Judicial Court agreed that MA Revenue overstepped the boundaries of the “Use Tax” statute as written in MA.

If you like this exciting stuff, you can read the final decision here.

SCAM ALERT!!! FALSE CLAIMS OF SALES TAX REFUNDS!!!

North Carolinians are reporting receiving phone calls promising sales tax refunds on purchases made at WalMart. The callers are asking for credit card numbers in order to receive the refund. SCAM!!!

http://www.islandgazette.net/content/index.php?option=com_content&task=view&id=8901&Itemid=81