CT – Contractor’s; New Certificate to be used

CT Contractors:  Be aware that the old CERT-141 “Contractor’s Exempt Purchase Certificate” is no longer valid.  You must now use the current CERT-141.  This was effective upon issuance of Announcement AN2009(6), dated 4/28/09 . 

The only applicable version of this certificate good for purchases today is the one with the revised date of (Rev. 03/09) as shown on the top left hand corner of the certificate under the Dept. of Revenue Services address.  Any certificate with a “Rev” date prior to this is no longer valid.

You can find the new certificate here.

SC – Constitution’s One Subject Rule intact

***UPDATE*** 

South Carolina issued an information letter to annouce information about the sales tax holidays that were nullified by the descision discussed in this post.  However, the Energy Holiday has not been re-established yet.  SC now has a back-to school holiday and their 2nd amendment (guns) holiday back for 2009.  To see the effective dates of these holidays and more informtion, see the 2009 Sales Tax Holidays post.  To read the  SC Information Letter #09-9, click here. 

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SC State Supreme Court finds that Act 338, allowing for sales tax holidays on guns and energy efficient products is unconstitutional because the legislature “log-rolled” another tax credit in with this act.

What we discover is that the SC Governor opposed the Act because it included a separate section for a tax credit unrelated to the sales tax holidays.  This was thought to be in violation of the SC Constitution which has a “one subject rule,” basically meaning that there must be a separate Act for each cause in order to prevent what is known as “log-rolling.” 

However, the SC legislature overruled the Governor’s veto and the Act went through with 3 separate items in one Act.  The SC Supreme Court ruled that this Act was in violation of the SC Constitution and thereby ruled that the entire act be nullified – including the first two sections regarding enacted sales tax holidays.

SC – Portable Toilets. Taxable, but 70% exempt. Huh??

Thank goodness SC recaps the findings at the top of the letter ruling before getting into the details.

This is a letter ruling for a company in SC questioning whether their rentals of Portable Toilets are subect to sales tax.  If you read down through the details of the ruling, you find that SC deems this to be a sale of tangible personal property and that the services included, whether mandatory or not, is incidental to the rental and is also subject to tax. 

Let’s say that you stopped after reading all of that (95%) of the entire letter response.  If this were your business, you’d be all ready to charge sales tax on the whole transaction.  HOWEVER!!!…

If you read the last 3 sentences, you’ll find that Portable Toilet rentals are exempt on 70% of the charge for such rental/service.  So after all of the verbage to identify that the transaction is subject to tax, they throw in at the end, this little-but big-partial exemption for this particular rental/service industry.

And State Governments wonder why taxpayers think the tax laws are confusing.

Where in the world did this little partial exemption originate?  The porta-potty business must have some good lobbyists in South Carolina.

See the revenue ruling for yourself, here.

NY – Prosthetic or not??

Just another reason why I and many others in this great nation are employed in a niche career involving sales and use taxes. 

New York put out an advisory opinion about whether biological soft tissue products were exempt.  In the advisory, they reviewed the exemption for medical eqiupment and supplies and prosthetics.  In this particular case, they found that the tissue would be a prosthetic because it replaced actual skin. 

But, what really struck me was the mention of another case where a particular type of bone filler met the requirement of prosthetic because it “completely or partially replaces a missing body part,” but a 2nd bone filler didn’t qualify because it only repaired the bone, was absorbed by the body and later replaced by new bone, so it was not exempt because it “did not completely or partially replace a missing body part because it did not remain in the body.” 

I find two things wrong with this:

1.  The statement was that the 2nd filler became “absorbed” by the body.  However, there’s no mention that it left the body.  But the reason for denial in this case was because “it did not remain in the body.”  I find this to be quite ambiguous.

2.  Next, I don’t understand why the non-prosthetic bone filler coulnd’t have been exempted as medical equipment and supplies since it seems to meet the definition of  “required for use in the cure, mitigtion, treatment or prevention of illnessess or diseases in human beings or to correct or alleviate physical incapacity.” 

My guess is that this is another case of rulings officers taxing something based on one section of a law, just because that’s the section inquired about by a taxpayer, but not paying attention to another section of law that would exempt it.

Does anyone else see this, or is it just me?  Your thoughts?

Like I said… this is the reason I’m employed.

NY Increases tax on car rentals

Effective June 1, 2009. Rate goes from 5-6%.

Go to: http://www.tax.state.ny.us/pdf/memos/sales/m09_1s.pdf

MO – near Month Long Sales Tax Holiday in the making!?!

I had to read it twice, but it’s true.  It’s not completely passed yet, but the MO house has passed House Bill No. 952 which would approve a sales tax holiday on all items purchased from July 4th-31st of each year for the next six years; if reauthorized when the six years is up, the next sunset will not be for an additional 12 years. 

It will be known as the “Independence Day Sales Tax Holiday” and would be effective this year if passed by the State Senate and signed by the MO Governor.

Noteworthy points:  1.  This is just a holiday specific for the State portion of sales taxes paid in the state of MO.  Local jurisdictions will have the discretion on whether to follow suite.  2. This is for all tangible personal property and services bought at retail.  There doesn’t seem to be a carve out for business purchases or automobiles. 

I will definitely track to see how this one ends and update this post when it either passes or becomes dead.

AR – Gets rid of tax on self-storage, but waiting 2 years first.

Arkansas repealed the sales tax on self-storage/mini-warehouse services, but it isn’t effective until July 2011. 

See the bill here.

CA – Rate increase affects contracts prior to sales tax increase.

Usually when states have rate increases, they make concessions for those who entered into binding agreements before the effective date of the rate increase.  California, however, is not taking this route. 

So, if you had a binding agreement to be charged 8.25% in sales tax, that agreement is no longer valid as quoted, the bills associated with the agreement will be calculated at 9.25%.  Oh, but if a certain district or city/county would raise it’s rate, then you can abide by the terms of the original agreement.  So when Los Angeles or any of the other locals in CA start raising rates, this rule doesn’t apply to those smaller tax rates. 

Way to go CA!  Brilliant!

To see the special notice CA put out about this, click here.

Beer and Wine tax to increase in NY on 5/1/09

You can read about it here: http://www.tax.state.ny.us/pdf/memos/alcohol/m09_3m.pdf

Do your local liquor store/bar a favor and drink up! The less they have in inventory when these changes take effect, the less tax they’ll have to pay on it and the less they’ll charge you in the end. Hmmm… that is if they pass on the savings to you!

Sales Tax gets a word on Drudge.

Well, hey, I see these kinds of articles every day, except more on the local news scale, not the WSJ.  They’re especially dire in these times; however, just last year around this time it was a different story – they were all having increased sales tax revenues.

But, today, this link was listed on the Drudge Report.  Right above the Pres. with his new dog (left hand column) – so does this mean that Sales Taxes are more important than the President’s new dog?  Hmmm!  Maybe it made Drudge because it’s New York and New York isn’t in as bad shape as CA, but yet, it’s a large state that requires nat’l attention from the Wall Street Journal.

If you’d like to see how often this really happens, check out the Sales/Use Tax News page on this site.  I don’t break out the collections reports by topic, but I do share them in my all items news link reader.  Maybe I’ll start breaking them out for those of you who are curious to follow such fodder.