SC&H Group Blog: "Expertise Beyond the Numbers"

State & Local Tax Updates: Alabama Sales & Use Tax; California Corporate Income Tax; and D.C. Credits & Incentives

Through its content-sharing partnership with Thomson Reuters Checkpoint, SC&H Group’s State and Local Tax practice has compiled the following round up of actionable state tax news.

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AlaskaPartnership — Draft 2014 partnership tax form issued.
The Alaska Department of Revenue has released a draft of Form 6900 (Partnership Information Return), a new form that is required to be filed by Alaska partnerships for tax years ending on or after December 31, 2014. The draft form, which is available on the Department’s website, will not be finalized until the IRS finalizes its 2014 federal forms. (Notice, Alaska Dept. of Rev., 11/04/2014.)

AlabamaSales Tax Rates — Adamsville sales and use tax changes.
The Alabama Department of Revenue has announced that, effective November 1, 2014, the Town of Adamsville increased the sales and use tax rate for general rate items, admissions to places of amusement and entertainment, and food sold through vending machines to 4% from 3.5%. The rate for automotive vehicles, truck trailers, semitrailers, and house trailers increased to 1.5% from 1%. The sales and use tax rate for farm and manufacturing machinery remains 1.5%. The withdrawal fee for automotive vehicle dealers remains $5. If sales of tangible personal property are made or delivered, or if purchases of tangible personal property are stored, used or consumed, outside the corporate limits of the town but within the police jurisdiction, the rates of tax are one-half of those stated above. Adamsville sales and use taxes may be filed online through My Alabama Taxes (MAT). (Notice, Alabama Dept. of Rev., 11/06/2014.)

AlabamaSales And Use Tax — Adamsville (Alabama) sales and use tax changes.
The Alabama Department of Revenue has announced that, effective November 1, 2014, the Town of Adamsville increased the sales and use tax rate for general rate items, admissions to places of amusement and entertainment, and food sold through vending machines to 4% from 3.5%. The rate for automotive vehicles, truck trailers, semitrailers, and house trailers increased to 1.5% from 1%. The sales and use tax rate for farm and manufacturing machinery remains 1.5%. The withdrawal fee for automotive vehicle dealers remains $5. If sales of tangible personal property are made or delivered, or if purchases of tangible personal property are stored, used or consumed, outside the corporate limits of the town but within the police jurisdiction, the rates of tax are one-half of those stated above. Adamsville sales and use taxes may be filed online through My Alabama Taxes (MAT). (Notice, Alabama Dept. of Rev., 11/06/2014.)

CaliforniaCorporate Income Tax — Interested parties meeting—withholding on domestic pass-through entities.
The California Franchise Tax Board will hold an interested parties meeting to elicit input on a proposed regulation that would modify the withholding on domestic pass-through entities to a “distributive share” scheme. California has long withheld on domestic pass-through entities based upon “distributions,” but given the clear trend among the states to withhold based on “distributive share” of pass-through entity income, California is interested in changing withholding with respect to domestic pass-through entities through Cal. Code Regs. 18 § 18662 . Possible alternatives that would ultimately result in a new regulation, Regulation 18662-7, will be discussed. Topics to be discussed include the following: (1) what type of withholding scheme works best to deal with tiered pass-through entity structures; (2) how to address the issue of overlapping due dates of withholding forms required to be filed with respect to pass-through entity withholding; (3) whether withholding payments should be due on a quarterly or annual basis; and (4) any other positives and negatives from other state withholding schemes relating to pass-through entities. The meeting will be held on Friday, December 12, 2014, at 1:00 p.m. at the Franchise Tax Board, Golden State Room B, 9646 Butterfield Way, Sacramento, CA 95827 North Lobby. To attend this meeting, interested parties should RSVP by December 5, 2014, by contacting Colleen Berwick at (916) 845-3306 or Email: colleen.berwick@ftb.ca.gov. To participate in this meeting by telephone, interested parties should use this number to dial in: (877) 923-3149 (the participant pass code is 2233420). For more details, interested parties should contact Leah Thyberg: email: leah.thyberg@ftb.ca.gov; telephone: (916) 845-3617; address: Legal Division (MS-A260), P.O. Box 1720, Rancho Cordova, CA 95741-1720. (California FTB Interested Parties Meeting – Proposed Reg 18662-7, 11/06/2014.)

CaliforniaCorporate Income Tax — Market-based sourcing—proposed amendments to Regulation 25136-2.
In connection with the possible amendments to Cal. Code Regs. 18 § 25136-2 (market-based sourcing rules for sales other than sales of tangible personal property) and to address certain issues in connection with sales of services and intangible property that were not addressed in the original language of that regulation (for a discussion of the Third Interested Parties Meeting (IPM) in July 2014 with respect to those amendments, see State & Local Taxes Weekly, Vol. 25, No. 24, 06/16/2014), the California Franchise Tax Board (FTB) has released an explanation and third draft of the proposed regulation. Since the July 2014 IPM, the FTB has received additional public input in connection with the definition of “marketable securities,” assignment rules for receipts that come in the form of interest and marketable securities, as well as a request for clarifying language in the asset management fee examples. The new draft language is based on the latest public input since July 2014. Among the changes made are changes in: (1) the general definition section (relating to who is a securities dealer and what contracts should be treated as marketable securities); (2) the benefit of service section (the asset management fee examples were clarified); (3) the sales from intangible property section (the changes address the sale of intangible property where there has been a complete transfer of property rights, and the provision for the assignment of receipts in the form of interest was substantially rewritten); and (4) the assignment of marketable securities section (assignments that use the commercial domicile of purchasers will be accepted if the assignment is in accordance with the taxpayer’s books and records but a taxpayer may overcome the presumption with credible evidence that the commercial domicile of a purchaser is in a state other than the commercial domicile reflected in the taxpayer’s books and records, and an example that allows a taxpayer to use billing address of its corporate or business entity customers to assign receipts if the commercial domicile of such customers is not readily apparent was inserted). The draft language will be presented to the 3-member FTB at its December 2014 public meeting. (CA FTB Explanation of Third Draft for Proposed Amendments to Regulation Section 25136-2, 11/06/2014.)

CaliforniaGeneral Administrative Provisions — Small business seminar in Orange.
The California State Board of Equalization (SBE) is co-sponsoring a free small business seminar in Orange and is inviting to attend business owners looking to grow their businesses and learn more about complying with state and federal tax laws. Presentations will be given by representatives from the SBE, the Franchise Tax Board, the Employment Development Department, the California Small Business Development Center, the Internal Revenue Service, and the U.S. Small Business Administration. The event will take place on Thursday, November 13, 2014, from 9:00 a.m. to 2:45 p.m. (check-in begins at 8:30 a.m.) at the Orange City Council Chambers, 300 East Chapman Avenue, Orange, CA 92866. Registration is by phone at 1-888-847-9652 or online. ( California SBE News Release 155-14-S, 11/06/2014 .)

CaliforniaPersonal Income Tax — Interested parties meeting—withholding on domestic pass-through entities.
The California Franchise Tax Board will hold an interested parties meeting to elicit input on a proposed regulation that would modify the withholding on domestic pass-through entities to a “distributive share” scheme. California has long withheld on domestic pass-through entities based upon “distributions,” but given the clear trend among the states to withhold based on “distributive share” of pass-through entity income, California is interested in changing withholding with respect to domestic pass-through entities through Cal. Code Regs. 18 § 18662 . Possible alternatives that would ultimately result in a new regulation, Regulation 18662-7, will be discussed. Topics to be discussed include the following: (1) what type of withholding scheme works best to deal with tiered pass-through entity structures; (2) how to address the issue of overlapping due dates of withholding forms required to be filed with respect to pass-through entity withholding; (3) whether withholding payments should be due on a quarterly or annual basis; and (4) any other positives and negatives from other state withholding schemes relating to pass-through entities. The meeting will be held on Friday, December 12, 2014, at 1:00 p.m. at the Franchise Tax Board, Golden State Room B, 9646 Butterfield Way, Sacramento, CA 95827 North Lobby. To attend this meeting, interested parties should RSVP by December 5, 2014, by contacting Colleen Berwick at (916) 845-3306 or Email: colleen.berwick@ftb.ca.gov. To participate in this meeting by telephone, interested parties should use this number to dial in: (877) 923-3149 (the participant pass code is 2233420). For more details, interested parties should contact Leah Thyberg: email: leah.thyberg@ftb.ca.gov; telephone: (916) 845-3617; address: Legal Division (MS-A260), P.O. Box 1720, Rancho Cordova, CA 95741-1720. (California FTB Interested Parties Meeting – Proposed Reg 18662-7, 11/06/2014.)

CaliforniaSales And Use Tax — Voluntary disclosure program (for use tax).
The California State Board of Equalization (SBE) has revised Publication 178, Voluntary Disclosure Program, its information publication that describes the SBE’s two distinct voluntary disclosure programs for reporting use tax. The revisions are to the mailing address and to the telephone number of the voluntary disclosure specialist in the section entitled “How to Request a Written Opinion.” That section provides that if someone wants to request an opinion as to whether or not the SBE would approve a voluntary disclosure request or to discuss eligibility for consideration under either voluntary disclosure program, that person should contact the voluntary disclosure specialist at the following address: Board of Equalization, Voluntary Disclosure Program, P.O. Box 942879 (MIC:44), Sacramento, CA 94279-0044; 1-916-324-2883 (telephone); 1-916-322-0187 (fax); or voluntary.disclosure@boe.ca.gov (email). The voluntary disclosure specialist’s fax number and email address did not change. ( California SBE Information Publication 178, 11/01/2014 .)

CaliforniaSales And Use Tax — SBE notifies retailers of upcoming visits.
Retailers throughout the state are receiving letters from the California State Board of Equalization (SBE) notifying them about upcoming visits from Statewide Compliance and Outreach Program (SCOP) teams. The visits are intended to educate retailers about properly reporting sales and use tax, increase compliance with tax laws, and maintain outreach efforts to assure taxpayers that the state’s tax system is fair and equal for all Californians. The SBE is mailing letters to 5,924 business owners in the following zip codes: Elverta (95626), Jamestown (95327), Mather (95655), Mission Hills (91345), Rio Linda (95673), Sacramento (95814), San Bernardino (92408), San Diego (92111), San Fernando (91340), and Walnut Grove (95690). Nine different SCOP teams located statewide (Oakland, Sacramento, San Jose, Van Nuys, Norwalk, Irvine, Riverside, Santa Clarita, and San Diego) conduct door-to-door, in-person visits in the zip code areas they cover. It is important for retailers to understand that the SBE asks only business-related questions, and does not inquire about personal financial information. Businesses found to be operating without a seller’s permit are provided instructions on how to register with the SBE, as well as information about other necessary licenses. Home-based businesses are not visited. ( California SBE News Release 156-14-G, 11/06/2014 .)

ColoradoCorporate Income Tax — Colorado wage withholding weekly filers—deadline change.
The Colorado Department of Revenue (CDOR) alerts wage withholding weekly filers who remit more than $50,000 that the regularly scheduled due date of on or before the third business day following a Friday will change during the week of Veterans Day to Thursday, November 13 to allow for the holiday. Such taxpayers may use Revenue Online or electronics fund transfer at any time on or before that date, including making the payment on the Veterans Day holiday. (Colorado TaxInfo Blog: Veterans Day holiday pushes weekly due date to Thursday, Nov. 13, 11/06/2014.)

ColoradoPersonal Income Tax — Wage withholding weekly filers—deadline change.
The Colorado Department of Revenue (CDOR) alerts wage withholding weekly filers who remit more than $50,000 that the regularly scheduled due date of on or before the third business day following a Friday will change during the week of Veterans Day to Thursday, November 13 to allow for the holiday. Such taxpayers may use Revenue Online or electronic funds transfer at any time on or before that date, including making the payment on the Veterans Day holiday. (Colorado TaxInfo Blog: Veterans Day holiday pushes weekly due date to Thursday, Nov. 13, 11/06/2014.)

District of ColumbiaSales Tax Rates — Cigars and other tobacco products.
L. 2014, Act 20-461, effective 11/06/2014 and applicable 10/01/2014, enacts the “Fiscal Year 2015 Budget Support Clarification Emergency Amendment Act of 2014.” The emergency legislation amends the “Fiscal year 2015 Budget Support Act of 2014” (Act 20-424) to repeal the 12% tax rate for sales of or charges (1) for cigars, excluding premium cigars, and (2) for other tobacco products, since the sales tax on these items was repealed.

District of ColumbiaCorporate Income Tax — D.C. credits—IRS adjustments; Qualified High Technology Companies.
L. 2014, Act 20-461, effective 11/06/2014 and applicable 10/01/2014, enacts the “Fiscal Year 2015 Budget Support Clarification Emergency Amendment Act of 2014.” The emergency legislation amends the “Fiscal Year 2015 Budget Support Act of 2014” (Act 20-424) to provide that the defined tax credit related to IRS income adjustments will be applied over a 4-year period in equal amounts in tax years beginning on or after January 1, 2019. In addition, the emergency legislation provides that the following amendments are applicable for tax years beginning after December 31, 2014: amendments (1) clarifying the definition of “Qualified High Technology Company,” and (2) providing that “Qualified High Technology Company” does not include an online or brick and mortar retail store or a building or construction company.

District of ColumbiaCredits and Incentives — Credits—IRS adjustments; Qualified High Technology Companies.
L. 2014, Act 20-461, effective 11/06/2014 and applicable 10/01/2014, enacts the “Fiscal Year 2015 Budget Support Clarification Emergency Amendment Act of 2014.” The emergency legislation amends the “Fiscal Year 2015 Budget Support Act of 2014” (Act 20-424) to provide that the defined tax credit related to IRS income adjustments will be applied over a 4-year period in equal amounts in tax years beginning on or after January 1, 2019. In addition, the emergency legislation provides that the following amendments are applicable for tax years beginning after December 31, 2014: amendments (1) clarifying the definition of “Qualified High Technology Company,” and (2) providing that “Qualified High Technology Company” does not include an online or brick and mortar retail store or a building or construction company.

District of ColumbiaEstate & Gift, Inheritance, And Transfer — Federal credit amount.
L. 2014, Act 20-461, effective 11/06/2014 and applicable 10/01/2014, enacts the “Fiscal Year 2015 Budget Support Clarification Emergency Amendment Act of 2014.” The emergency legislation amends the “Fiscal Year 2015 Budget Support Act of 2014” (Act 20-424) to clarify that the existing estate tax provisions imposing a tax in the amount of the federal credit apply to estates of decedents dying before January 1, 2016.

District of ColumbiaPersonal Income Tax — Credits; standard deduction; personal exemption.
L. 2014, Act 20-461, effective 11/06/2014 and applicable 10/01/2014, enacts the “Fiscal Year 2015 Budget Support Clarification Emergency Amendment Act of 2014.” The emergency legislation amends the “Fiscal Year 2015 Budget Support Act of 2014” (Act 20-424) to provide that the defined tax credit related to IRS income adjustments will be applied over a 4-year period in equal amounts in tax years beginning on or after January 1, 2019. Provisions amending the standard deduction are revised to clarify that they take effect for tax years beginning after December 31, 2014 rather than December 31, 2015, and to adjust the amount of the standard deduction for heads of household and married individuals filing a joint return or a surviving spouse. The emergency legislation provides that the $3,000 exclusion for pension, military retired pay, or annuity income received from the District or federal government by persons age 62 or older applies for taxable years beginning before January 1, 2015. Personal exemption provisions are revised to provide that the additional exemption for a head of household cannot be claimed for a tax year in which the amount of the personal exemption is $2,200 or more, and to indicate that the reduction in the personal exemption amount for taxpayers whose AGI exceeds a specified threshold applies for tax years beginning after December 31, 2014. The provisions allowing an earned income tax credit equal to 40% of the federal credit is amended to provide that it will not be allowed to a resident who elected to claim the low income tax credit.

District of ColumbiaReal Property — Senior citizen relief; tax sales; ombudsman.
L. 2014, Act 20-461, effective 11/06/2014 and applicable 10/01/2014, enacts the “Fiscal Year 2015 Budget Support Clarification Emergency Amendment Act of 2014.” The emergency legislation amends the “Fiscal Year 2015 Budget Support Act of 2014” (Act 20-424) to repeal the “Senior Citizen Real Property Tax Relief Act of 2013” (Law 20-105). Tax deferral for low-income senior property owners is amended to provide that deferred taxes will bear simple interest at a rate of 1/2% per month or portion of a month until paid. If, however, an individual owner is 75 years of age or older, has less than $12,500 of household interest and dividend income, and has owned a residence in the District for at least 25 years (including no more than two consecutive gaps of ownership where each gap may not exceed 120 days), there will be no interest for deferred taxes. This emergency legislation also creates an Office of Real Property Tax Ombudsman, provides that interest on delinquent taxes is simple interest, and adopts major changes to tax sale provisions that better protect homeowners from losing their property, which incorporate additional restrictions on the sale of tax delinquent property by the District and further requirements for post-sale notice.

District of ColumbiaRecordation Taxes, Realty — Exemption; exclusion from additional 0.35% tax.
L. 2014, Act 20-461, effective 11/06/2014 and applicable 10/01/2014, enacts the “Fiscal Year 2015 Budget Support Clarification Emergency Amendment Act of 2014.” The emergency legislation amends the “Fiscal Year 2015 Budget Support Act of 2014” (Act 20-424) to exempt, from both recordation and real property transfer taxes, a deed to property transferred to or property transferred to a named beneficiary of a revocable transfer on death deed under the Uniform Real Property Transfer of Death Act of 2012 on the death of the grantor of the revocable transfer on death deed. The emergency legislation also provides that the exclusion from the additional 0.35% deed recordation tax applies to residential properties transferred by deed of title (was transferred) for a consideration less than $400,000.

District of ColumbiaSales And Use Tax — Cigars and other tobacco products.
L. 2014, Act 20-461, effective 11/06/2014 and applicable 10/01/2014, enacts the “Fiscal Year 2015 Budget Support Clarification Emergency Amendment Act of 2014.” The emergency legislation amends the “Fiscal Year 2015 Budget Support Act of 2014” (Act 20-424) to repeal the 12% tax rate for sales of or charges (1) for cigars, excluding premium cigars, and (2) for other tobacco products, since the sales tax on these items was repealed.

HawaiiReal Property — Kauai—application for reclassification of tax status.
The Kauai County Department of Finance has issued a news release stating that qualified real property owners that believe their properties were given wrong classification for tax year 2014 may apply for reclassification. The deadline for applying for reclassification is December 31, 2014. To be eligible for consideration, applicants must submit a new “Use Survey Form” to the Real Property Assessment office and at least one of the following documents: cancelled general excise tax; cancelled transient accommodations tax license; cancelled or revoked commercial use permit; copies of long-term lease agreements; or other documentation that indicate that the 2014 tax classification is incorrect. Properties with multiple units are only eligible for the Homestead tax class if each unit independently qualifies for this classification; additional units that are vacant or are being used by family members that are not co-owners of the property do not qualify for the Homestead tax class. The Department will review the reclassification requests and will issue a tax credit in tax year 2015 to real property owners whose revised tax classification requests are confirmed. (County of Kauai Department of Finance News Release, Qualified Property Owners Can Apply for Reclassification of Tax Status, 11/06/2014.)

IllinoisReal Property — Tax sale certificate—listing of purchase amount.
The Illinois appellate court affirmed upheld a circuit court determination that upheld the validity of tax sale certificates of purchase issued to a buyer (SIPI, LLC) of 11 tracts of land at a public tax sale, although the certificate for each parcel sold listed the parcel’s total purchase amount without specifically itemizing the taxes, special, assessments, interest charges, and other costs involved. The statute governing tax sale certificates of purchase (ILCS Chapter 35 § 200/21-250 ) required the certificate to show “the amount of taxes, special assessments, interest and cost” for which the applicable property was sold. In that context, the word “amount” was singular and referred to one total, comprised of several elements or components. Since a number of other statutes covering other aspects of tax sale procedures expressly required itemization or separation of certain components they required, it was reasonable to assume that the legislature would have worded the language at issue in ILCS Chapter 35 § 200/21-250 differently if it had intended such itemization there. Accordingly, the tax sale buyer was properly denied its request for a declaration of a sale in error and a refund of the tax sale purchases. (In re Application of Kane County Collector, Ill. App. Ct. (2nd Dist.), Dkt. No. 2-14-0265, 11/06/2014.)

KentuckyReal Property — College textbook rentals.
Reversing the Kentucky Board of Tax Appeals, the Franklin Circuit Court ruled that a company that rents out college textbooks could claim the warehouse exemption from property taxation in Ky. Rev. Stat. Ann. § 132.097 and Ky. Rev. Stat. Ann. § 132.099 , even though the leased books will be returned to Kentucky. The company rents out most of its inventory of books to college students at the beginning of each semester. The books are then returned to the company and rented out again. Although the books were shipped out of state within six months of arriving at the company’s warehouse, 89% of the books also returned to Kentucky from the out-of-state destination. The court found that the exemption does not require the personal property to be sent to a final or permanent destination, just a destination that is outside of Kentucky. The exemption also does not except from its application personal property, which is leased or rented. The property owner must only reasonably demonstrate that the property will be shipped outside of Kentucky within the next six months. The statutory exemptions were enacted to reduce the burden of the tangible personal property tax on inventory so as to encourage warehousing in Kentucky to promote economic growth. The court found that the Department of Revenue impermissibly read “final destination” into a statute that only states “destination,” and that distinction is not supported by the plain language of the statute. Consequently, the taxpayer was entitled to the exemption. (Chegg, Inc. v. Kentucky Dept. of Rev., et al., Franklin Cir. Ct. (Div. II), 14-CI-00170, 10/29/2014.)

MassachusettsEstate & Gift, Inheritance, And Transfer — Gross estate and estate tax administrative provisions.
The Massachusetts Department of Revenue has repealed the regulations (830 CMR 65C.1.1; 830 CMR 65C.2.1, effective 11/07/2014) explaining the administrative provisions of the Massachusetts estate tax and the property included in the Massachusetts gross estate for the computation of the Massachusetts estate tax that were applicable to the estates of decedents dying on or after January 1, 1986 and before January 1, 1997 because they are obsolete.

MassachusettsGeneral Administrative Provisions — Responsible person.
The Massachusetts Department of Revenue has amended the regulation (830 CMR 62C.31A.1, effective 11/07/2014) describing the procedure for the assessment of taxes upon and the collection of taxes from responsible persons, persons under a duty to pay over certain trustee and use taxes owed by a corporation, partnership or limited liability company. The amendment reflects a statutory change extending the statute of limitations period for the collection of taxes from 6 years to 10 years, as well as clarifies that any question relative to a responsible person determination before the Department, the Appellate Tax Board, or any court at the end of the collections period will extend the collections period for an additional year after the final determination of the question.

MassachusettsGeneral Administrative Provisions — Settlement of tax liabilities.
The Massachusetts Department of Revenue has amended the regulation (830 CMR 62C.37A.1, effective 11/07/2014) regarding procedures for the settlement of tax liabilities authorized under the provisions of Mass. Gen. L. Chapter 62C § 37A by requiring taxpayers to extend the waiver of the running of the statutory period of limitations on collection of the tax for an additional period ending two years after the due date of the last payment.

MassachusettsGeneral Administrative Provisions — Extension of time for filing returns.
The Massachusetts Department of Revenue has repealed the regulation (830 CMR 62C.19.1, effective 11/07/2014) explaining the circumstances under which taxpayers may be granted an extension of time to file income tax, corporate excise and estate tax returns because the regulation is outdated and does not reflect current electronic filing methods.

MassachusettsPersonal Income Tax — Health insurance individual mandate.
The Massachusetts Department of Revenue has amended the regulation (830 CMR 111M.2.1, effective 11/07/2014) pertaining to the MA health insurance individual mandate to provide guidance on the interaction of the MA individual mandate with the federal mandate to obtain health insurance. These amendments create a credit against any MA health care penalty owed for the amount of any federal health care penalty, so as to prevent a pyramiding of the penalties.

MinnesotaPersonal Income Tax — E-filing—Legacy shut off.
The Minnesota Department of Revenue has announced that for tax year 2014, Minnesota will process all tax types through MEF. The Department will be shutting off its Legacy functions. No Legacy returns current or prior year, will be accepted. The following tax types are affected: M1 Individual; M1PR Homestead Credit-Renter Property Refund; and M2 Fiduciary. (Legacy Shut Off, Minn. Dept. Rev., 11/06/2014.)

MontanaCigarette, Alcohol & Miscellaneous Taxes — Regulations pertaining to liquor vendors amended and repealed.
The Montana Department of Revenue has amended ARM 42.11.104, 42.11.105, 42.11.106, 42.11.211, 42.11.213, 42.11.243, 42.11.245, and 42.11.402, and repealed ARM 42.11.205, 42.11.212, 42.11.214, 42.11.215, and 42.11.217 pertaining to liquor vendors. ARM 42.19.401, 42.19.406, and 42.19.211 pertaining to property classification and property tax assistance programs, effective November 7, 2014. Specifically, ARM 42.11.104 has been amended to create better transparency in how the posted price of liquor is determined. Because wholesale price is only one of the components used to determine the posted price of liquor, the Department also amended the rule title to better reflect the content of the rule. The Department amended ARM 42.11.105 by eliminating certain terms that are no longer used in the rule or are defined elsewhere in the statute. ARM 42.11.106 was amended to change “mark-up” to “markup” for formatting consistency with other rules and statutes. ARM 42.11.211 was amended to reflect the increase in the vendor representative registration fee and the annual renewal fees from $25 to $50. ARM 42.11.213 was amended to reflect the change in the annual vendor permit fee from a $100 flat fee to a progressive fee schedule based upon volume sold. ARM 42.11.213 was amended to replace the term “bottles” with “primary packaging” in section (9), because bottles are not the only type of container approved for use with distilled spirits. The Department also added a new section (11) as a reminder within the samples rule that a vendor must register its representatives and hold a current vendor permit to distribute samples in Montana. ARM 42.11.245 was amended for clarity by striking the phrases “distributing” and “or for any expense incidental to their use” from section (2). While registered representatives are permitted to distribute point of sale advertising materials and consumer advertising specialties to retailers for use in their establishments (without also providing any type of compensation), the retailers are not permitted to redistribute the materials because they are not registered or allowed to promote products. ARM 42.11.402 was amended to clarify that the rule pertains to all liquor sold in Montana and not just product shipped through the state liquor warehouse. The Department repealed ARM 42.11.205, ARM 42.11.212, ARM 42.11.214, ARM 42.11.215, and ARM 42.11.217 and relocated information regarding vendor representatives to ARM 42.11.211. Information regarding vendor permits was also relocated from ARM 42.11.214 and 42.11.215 to ARM 42.11.213.

North DakotaSales Tax Rates — Local sales tax ballot measures approved.
Based on unofficial results from the North Dakota Secretary of State’s office, Bottieneau County, Cass County and Renville County have all approved an emergency services communication fee (911 fee) increase of 50¢ per line. Williams County approved a 1% public safety sales tax. Voters in the Cities of Grafton and Killdeer approved a 0.5% city sales tax increase.

North DakotaReal Property — Local property tax ballot measures approved.
Based on unofficial results from the North Dakota Secretary of State’s office, Traill County voters approved a measure to increase the current 15-mill-to-market road levy. In addition, Ransom County, Richland County, Sargent County and Traill County, as well as the Cities of Carrington, Cavalier, Drayton, Enderlin, Fessenden, Farimount, Grafton, Hankinson, Hannaford, Hatton, Hillsboro, Lisbon, Mayville, New Salem, Northwood, Park River, and Wahpeton, have all approved property tax exemptions to new or expanding retail sector businesses. Voters in the City of Dawson also adopted a city property tax exemption measure.

North DakotaSales And Use Tax — Local sales tax ballot measures approved.
Based on unofficial results from the North Dakota Secretary of State’s office, Bottieneau County, Cass County and Renville County have all approved an emergency services communication fee (911 fee) increase of 50¢ per line. Williams County approved a 1% public safety sales tax. Voters in the Cities of Grafton and Killdeer approved a 0.5% city sales tax increase.

South CarolinaCorporate Income Tax — South Carolina—Exceptional Needs Children Scholarship Credit.
The South Carolina Department of Revenue has updated the amount of remaining credit available for under the Exceptional Needs Children Scholarship Credit and is at $770,973 (previously, $1,253,314), as of November 5, 2014. The total amount credit which may be awarded statewide cannot exceed $8 million. The credit is available for contributions made between July 1, 2014 through June 30, 2015 to nonprofit scholarship funding organizations to provide grants for tuition, transportation, and textbooks to exceptional needs children enrolled in eligible schools, provided the contribution is note designated for a specific child or school. The credit is non-refundable and cannot exceed 60% of a taxpayer’s total tax liability. Corporations may not transfer the credit unless all of the assets of the corporation are conveyed in the same transaction. Taxpayers may apply for the credit using Form TC-57A. A listing of nonprofit scholarship funding organizations is available on the website of the Education Oversight Committee. (Exceptional Needs Children Scholarship Credit, S.C. Dept. of Rev., 11/05/2014.)

South CarolinaCorporate Income Tax — South Carolina allocation and apportionment—November 2014 meeting.
The South Carolina Department of Revenue has announced that the final alternative allocation and apportionment meeting is scheduled for November 14, 2014, and that participants should notify the Department by November 13 if they plan to attend the meeting by emailing Tim Thompson at thompstc@sctax.org. The meeting will begin at 10:00 a.m. at the South Carolina Department of Revenue located at 300A Outlet Pointe Boulevard, Columbia, SC. Attendees are asked to arrive at least 20 minutes early in order to complete the Department’s standard security process. The meeting will be an open discussion for participants to address alternative allocation and apportionment methods other than combined reporting, including add-backs, and any other issues participants would like to bring to the Department’s attention. If participants have information they would like to submit before the meeting, they should email the materials to Tim Thompson. (Notice Concerning October 24th Meeting on Alternative Allocation and Apportionment Methods, S.C. Dept. of Rev., 11/07/2014.)

South CarolinaCredits and Incentives — Exceptional Needs Children Scholarship Credit—update.
The South Carolina Department of Revenue has updated the amount of remaining credit available for under the Exceptional Needs Children Scholarship Credit and is at $770,973 (previously, $1,253,314), as of November 5, 2014. The total amount credit which may be awarded statewide cannot exceed $8 million. The credit is available for contributions made between July 1, 2014 through June 30, 2015 to nonprofit scholarship funding organizations to provide grants for tuition, transportation, and textbooks to exceptional needs children enrolled in eligible schools, provided the contribution is note designated for a specific child or school. The credit is non-refundable and cannot exceed 60% of a taxpayer’s total tax liability. Corporations may not transfer the credit unless all of the assets of the corporation are conveyed in the same transaction. Taxpayers may apply for the credit using Form TC-57A. A listing of nonprofit scholarship funding organizations is available on the website of the Education Oversight Committee. (Exceptional Needs Children Scholarship Credit, S.C. Dept. of Rev., 11/05/2014.)

South CarolinaPersonal Income Tax — Exceptional Needs Children Scholarship Credit—update.
The South Carolina Department of Revenue has updated the amount of remaining credit available for under the Exceptional Needs Children Scholarship Credit and is at $770,973 (previously, $1,253,314), as of November 5, 2014. The total amount credit which may be awarded statewide cannot exceed $8 million. The credit is available for contributions made between July 1, 2014 through June 30, 2015 to nonprofit scholarship funding organizations to provide grants for tuition, transportation, and textbooks to exceptional needs children enrolled in eligible schools, provided the contribution is note designated for a specific child or school. The credit is non-refundable and cannot exceed 60% of a taxpayer’s total tax liability. Taxpayers may apply for the credit using Form TC-57A. A listing of nonprofit scholarship funding organizations is available on the website of the Education Oversight Committee. (Exceptional Needs Children Scholarship Credit, S.C. Dept. of Rev., 11/05/2014.)

TexasCredits and Incentives — Qualifying data center exemption.
The Texas Comptroller of Public Accounts has adopted amendments to the qualifying data center exemption (34 Tex. Admin. Code § 3.335, effective 11/10/2014), which correct the form number of the Texas Application for Certification as a Qualifying Data Center from AP-223 to AP-233, and revise the form number of the Qualifying Data Center Job Creation Report from 01-930 to 01-160.

TexasSales And Use Tax — Qualifying data center exemption.
The Texas Comptroller of Public Accounts has adopted amendments to the qualifying data center exemption (34 Tex. Admin. Code § 3.335, effective 11/10/2014), which correct the form number of the Texas Application for Certification as a Qualifying Data Center from AP-223 to AP-233, and revise the form number of the Qualifying Data Center Job Creation Report from 01-930 to 01-160.

UtahReal Property — Tax calendar and tax tables issued.
The Utah State Tax Commission, Property Tax Division, has issued the 2015 Property Tax Levies table that includes statutory authority cites and maximum levy rates, the revised property tax calendar and the Calendar Year Entity Property Tax Increase Requirements table that sets forth the notification requirement when there is an intent to increase property taxes for 2016. (2015 Property Tax Levies, Utah State Tax Comm’n, 11/01/2014; Property Tax Calendar, Utah State Tax Comm’n, 11/01/2014; Calendar Year Entity Property Tax Increase Requirements, Utah State Tax Comm’n, 11/01/2014.)

VermontSales And Use Tax — Renting rooms in Vermont—publication update.
The Vermont Department of Taxes (DOT) has updated its fact sheet explaining how the sales and use tax applies to rooms and meals. The publication explains that sleeping accommodations offered to the public for a consideration on premises operated by a private person, entity, institution, or organization is subject to the 9% meals and rooms tax if those rentals total 15 or more days in any one calendar year. (Renting a Room with A View, Pub. FS-1006, 07/01/2014 (released 11/07/2014).)

WashingtonSales And Use Tax — Sales to nonresidents.
The Washington Department of Revenue has updated the Excise Tax Advisory (ETA) discussing the requirements of the retail sales tax exemption for sales to certain nonresidents of tangible personal property, digital goods, and digital codes, for use outside of Washington. The exemption applies only to sales to residents of states other than Washington, U.S. territories of Canadian provinces that do not impose sales and use tax, value added tax, gross receipts tax on retailing activities or a similar tax of 3% or more. The ETA has been updated to reflect the exclusion of sales of marijuana from the exemption, effective June 12, 2014. ( Washington Excise Tax Advisory 3054.2014, 11/04/2014 .)

WashingtonSales And Use Tax — Dark fiber sales.
The Washington Department of Revenue has issued guidance on the sourcing and apportionment of sales of dark fiber (installed fiber optic cabling that has not been lit). The provision of dark fiber is considered a “competitive telephone service” under Washington law and is treated as a service for sales tax sourcing purposes. Although services are generally sourced to the place of receipt (first use), dark fiber which is available for first use in multiple locations at the same time may be sourced using an alternate methodology. To apply such an alternate methodology, the receipt of dark fiber must occurs in multiple locations, there must be agreement between buyer and seller to allocate the sale to multiple locations based on a reasonable and consistent method and the purchaser must provide locations and allocation by the time of the invoice. In addition, the seller may opt to source the sale to a single known location or access point. ( Washington Excise Tax Advisory 3193.2014 , 11/04/2014 .)

WashingtonSales And Use Tax — Timeshare agreements.
The Washington Department of Revenue has published guidance on the taxation of timeshares. Timeshare stays in lodging facilities are subject to sales and lodging taxes. Assuming the consumer does not have an ownership interest in the property being used, these taxes apply to consumer use of timeshare facilities on a transient basis, regardless of whether the person using the facility prepaid with points through a timeshare operator or whether the consumer is a Washington resident. The taxable amount is determined by comparing the value of the timeshare to a similar unit’s value at the same time of year. When points are redeemed for a stay in the timeshare unit, the value of the points is the taxable amount. For non-members of a timeshare agreement, the taxable amount is the amount charged. Housekeeping charges are subject to sales tax and applicable lodging taxes. (Tax Topic—How Sales Tax Applies to Washington Timeshare Agreements, Washington Dept. of Rev., 11/06/2014.)

WashingtonSales And Use Tax — Medical marijuana sales.
The Washington Board of Tax Appeals (BTA) denied the taxpayer’s appeal. The taxpayer, operator of a medical marijuana dispensary, challenged the imposition of sales tax on sales of medical marijuana, citing the sales tax exemption for prescription drugs. The BTA, after examining the statutory history of the exemption, determined that the practitioner issuing the prescription must be authorized to prescribe the substance referenced in the order. Because no physician is authorized under state or federal law to prescribe marijuana, the notes provided by customers’ physicians indicating that they might benefit from the use of marijuana are not “prescriptions” and the sale of medical marijuana is not eligible for the exemption for drugs dispensed pursuant to a prescription. (Rhonda L. Duncan d/b/a The Compassionate Kitchen v. Wash. Dept. of Rev., Wash. BTA, Dkt. No. 12-286, 10/13/2014.)

WisconsinReal Property — Wisconsin unclaimed property holder report guide revised.
The Wisconsin Department of Revenue has revised its tax publication providing reporting guidance for holders of unclaimed property. The revised publication advises holders that annual holder reports for all unclaimed property, including safety deposit boxes, are due on or before November 1 each year along with the unclaimed property, with the following exception. Holders must always deliver the contents of abandoned safe deposit boxes in the following year from February 1 to February 15. Holders can request up to a 45-day extension of the November 1 due date to file their annual report and remit unclaimed property (except the contents of safety deposit boxes which are always due the following year between February 1, through February 15), by submitting Form UCP-135 to the Wisconsin Department of Revenue at least 30 days before the November 1, deadline. ( Wisconsin Dept. Rev. Tax Publication 82, 11/01/2014 .)

WisconsinReal Property — Wisconsin unclaimed property publication revised.
The Wisconsin Department of Revenue has revised its tax publication providing guidance for reporting unclaimed property. The revised publication provides that holders can request up to a 45-day (rather than a 2-month) extension to file an unclaimed property report by submitting a written request to the Department at least 30 days before the November 1 due date. The information in the revised publication reflects the positions of the Department on laws enacted by the Wisconsin Legislature and in effect as of November 1, 2014. ( Wisconsin Dept. Rev. Tax Publication 83, 11/01/2014 .)

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