The Sales Tax Connection

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    Tax legislation and administrative policies are complex and subject to change. Therefore, should you wish to ask for our opinion on any of the matters posted (or any sales tax matter in general), please know that the conclusions reached herein and views expressed are matters of interpretation and opinion rather than certainty. The information provided is based on understanding of the facts as provided by various media sources (and you) and is not meant to represent a ruling, nor is it legally binding.

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CT Sales Tax Exemption on Fuel Efficient Vehicles

Posted by salestax on September 24, 2009

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

Posted in General Tax Information | 4 Comments »

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

Posted by salestax on September 11, 2009

UPDATEAs suspected, no relief in the 6% sales tax rate.  See CT revenue news homepage.

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!!!

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Recent Sales Tax Talking Points

Posted by salestax on September 1, 2009

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.

***IOWANo 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.

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Sales Tax Holidays? Special Report

Posted by salestax on August 31, 2009

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). Read the rest of this entry »

Posted in General Tax Information | Tagged: , , | 1 Comment »

D.C. to Raise Sales Tax Rate

Posted by salestax on August 28, 2009

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.

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And the winner is: New Hampshire (for now)

Posted by salestax on August 26, 2009

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. Read the rest of this entry »

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

Posted by salestax on August 24, 2009

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

Posted in General Tax Information | 1 Comment »

MN lists delinquent taxpayers in liquor industry

Posted by salestax on August 20, 2009

MN is taking a hard stand against liquor establishments who are late in filing taxes.

The list, to be updated each month, has three (3) sections.

1. Those who are newly delinquent

2. Those who were delinquent in prior months and remain so.

3. Those who have cleared their delinquency

MN further goes to use this list to warning to vendors of these businesses – vendors should not sell to the delinquent taxpayers on the list until they have been removed from the list.

Generally, states put out delinquent taxpayer lists to shame businesses and individuals into paying delinquent taxes. MN takes this one step further in restricting vendors from even selling to those who are delinquent. I’m sure this practice really stifles the business if they aren’t getting goods to sell – especially in the liquor industry. I’d like to know how quickly this pressure turns these businesses compliant. Does anyone want to study the list for a few months and see how quickly one business moves from the delinquent list to the “good list.” Or how much quicker does this method take over another state who doesn’t restrict vendors, but just uses the shame-on-you listing. There has got to be a scholarly research paper in this somewhere. If anyone uses this idea, I’d love to see the final analysis.

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SD – Self storage in the last 3 years? Get Your Refund!

Posted by salestax on August 19, 2009

Some time ago, two very brave business owners subjected themselves to sales tax statute scrutinization of their mini/self-storage business.  These brave souls won their case almost a year ago and it now stands that basic Mini/Self storage services are not taxable in SD anymore.  Further, SD is allowing any customers who had been charged tax on these services to go back to the storage business and request a sales tax refund (See my previous report). 

Well, the time is drawing near and those taxes paid will no longer be elibible for refund after 9/15/09 if a customer does not request it. 

For more information and back ground, see the Business Tax Division page on the SD Revenue and Regulation website here.

Also, for a synopsis on what storage services are exempt vs. taxable in SD, see here.

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North Carolina Rate Increase 1% on 9/1 & another .25% on 10/1

Posted by salestax on August 10, 2009

The current state sales and use tax rate in North Carolina is 4.5%. Senate Bill 202 increases the North Carolina state sales and use tax rate in the following manner:

Sales made on or after September 1, 2009 and before October 1, 2009 are subject to a 5.50% rate, plus applicable Local Taxes. (This is the newly enacted additional 1%)

Sales made on or after October 1, 2009 and before July 1, 2011 are subject to a 5.75% rate, plus applicable Local Taxes.  (This .25% was enacted previously, but will still be applicable, even with the added 1% starting in Sept.)

See here for details: http://www.dornc.com/taxes/sales/rate_increase2009.html and here: http://www.dornc.com/aboutus/education/lawchanges2009.html

Posted in General Tax Information | 3 Comments »