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

State & Local Tax Updates: Alabama Back-To-School Sales Tax; Kansas Electronic Return Policy; and Minnesota Sales & Use Tax for Athletic Facilities

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.

Please note that a subscription will be required to access the links through Thomson Reuters Checkpoint.

AlabamaSales And Use Tax — Back-to-school sales tax holiday participants.
The following localities have informed the Alabama Department of Revenue that they will participate in the 2014 back-to-school sales tax holiday being held this year from August 1 to August 3: Aliceville (locality code: 9301), Clayton ((615), Covington County (7020), Marion (9381), Saraland (9758), and Spanish Fort (9102). The following localities have informed the Department that they will not participate in this year’s sales tax holiday: Courtland (9635), Lowndes County (7043), Oakman (9652), and Section (9619). A county or municipality can, by resolution or ordinance adopted at least 30 days before the first full weekend of August, provide for the exemption of covered items from county or municipal sales or use taxes during the same time period, under the same terms, conditions, and definitions as provided for the state sales tax holiday. (See RIA State and Local Taxation Service ¶ 21,997 .)

CaliforniaGeneral Administrative Provisions — Small business tax seminar in Rancho Cordova.
The California State Board of Equalization (SBE) is sponsoring a free small business tax seminar in Rancho Cordova and is inviting to attend business owners, entrepreneurs, and individuals who would like to start a business and learn how to comply with California’s complex tax laws. The seminar is intended to provide information that can help taxpayers expand their business knowledge and to offer assistance with state and federal tax laws. Presentations will be given by representatives from the SBE, the Employment Development Department, the Franchise Tax Board, the Small Business Development Center, the Small Business Administration, and the Internal Revenue Service. The event will take place on Thursday, July 10, 2014, from 9:30 a.m. to 3:00 p.m. (check-in begins at 9:00 a.m.), at Rancho Cordova City Hall, 2729 Prospect Park Drive, Rancho Cordova, CA 95670. Registration is by phone at 1-888-847-9652 or online. ( California SBE News Release 98-14-R, 07/02/2014 .)

CaliforniaGeneral Administrative Provisions — Tax seminar for nonprofit and exempt organizations in San Diego.
The California State Board of Equalization (SBE) is sponsoring a free tax seminar for nonprofits and exempt organizations in San Diego and is inviting to attend nonprofit managers and others who have questions or would like more information about state tax laws. Representatives from the SBE, the Employment Development Department, the Franchise Tax Board, the Office of the California Attorney General, and the Neighborhood House Association will offer informative presentations on sales and use tax for nonprofits, compliance for exempt organizations, employment taxes and nonprofits, property tax exemptions for nonprofits, and regulations of charities. The event will take place on Wednesday, July 9, 2014, from 9:00 a.m. to 4:00 p.m. (check-in begins at 8:30 a.m.), at Balboa Park Club, 2144 Pan American Road W, San Diego, CA 92831. Registration is by phone at 1-888-847-9652 or online. ( California SBE News Release 97-14-S, 07/02/2014 .)

FloridaInsurance — Application of tax to bail bond and title insurance premiums.
Effective for bail bond policies or contracts written on or after January 1, 2015, the portion of direct written bail bond premiums retained by licensed bail bond agents or licensed managing general agents is no longer subject to insurance premium tax. The portion of direct written bail bond premiums not retained by agents or managing general agents remains taxable at 1.75%. Effective for title insurance policies written on or after January 1, 2015, through at least December 31, 2017, the portion of title insurance premiums retained by title insurance agents or title insurance agencies is no longer subject to insurance premium tax. The portion of title insurance premiums not retained by agents or agencies remains taxable at 1.75%. ( Florida Tax Information Publication 14B8-02, 07/01/2014 .)

KansasSales And Use Tax — Simplified electronic return policies.
The Kansas Department of Revenue has revised a notice relating to simplified electronic return policies to provide that, as of January 1, 2013, sellers not registered under the Streamlined Sales and Use Tax Agreement (SSUTA) that are registered in Kansas are permitted to file a simplified electronic return (SER). These sellers will file part 1 of the SER monthly and will have two options for meeting their obligations regarding furnishing part 2 information: (1) file part 2 of the SER together with part 1 of the SER or (2) file part 2 of the SER at the same time part 1 of the SER for December is due. Part 2 information filed pursuant to this option will cover the month of December as well as all previous months of the same calendar year and will only require annual and not monthly totals. Sellers will only be required to file part 2 of the SER when the Department notifies the Governing Board that it requires the submission of part 2 information pursuant to § 318(C)(2) of the SSUTA. ( Kansas Revenue Department Public Notice 10-15, 07/01/2014 .)

LouisianaCigarette, Alcohol & Miscellaneous Taxes — Refund of occupational license tax overpayments not required.
The City of Ponchatoula is not obligated to refund a business’s overpayments of occupational license tax. The business paid the local occupational license to the city in the amount of $7,500 per year over a 9-year period, voluntarily and without protest. The business requested a refund of overpayments amounting to $11,700, claiming that it came within the scope of La. Rev. Stat. Ann. § 47:355(B)(2) which provides that the maximum license tax annually paid by a retail dealer of building materials is not to exceed $6,200. Municipalities are not required to refund overpayments of valid occupational license taxes voluntarily paid due to a mistake of fact or law, unless authorized to do so by statute. Although La. Rev. Stat. Ann. § 47:1621 authorizes refunds and credits for overpayments in certain circumstances, that authorization only applies to taxes and revenues collected by the Secretary of the Department of Revenue for the state of Louisiana. Since there is no state statute authorizing the refunding of municipal occupational license tax overpayments, a municipality is not obligated to make such a refund. Furthermore, Ponchatoula’s city ordinances do not provide for a refund or credit for such overpayments. (OAG, 14-0073 , 06/16/2014.)

MaineCorporate Income Tax — Maine withholding taxes and unemployment contributions.
Maine Revenue Services (MRS) has issued a tax alert announcing the separation of the quarterly filing for Maine income tax withholding and unemployment contributions for tax periods beginning on or after January 1, 2015. Maine income tax withholding and unemployment contributions have been filed on, and a single payment remitted with, Form 941/C1-ME. The separation of the tax forms and the resulting changes in the filing and payment procedures will not affect any tax periods beginning in 2014; the new filing and payment procedures will only apply to tax periods beginning on or after January 1, 2015. The new filing process means that all withholding tax will be reported on Form 941ME and all unemployment contributions will be reported on new Form ME UC-1. Although the forms and instructions will be separated beginning in 2015, MRS will continue to process the unemployment contributions forms and payments for the Maine Department of Labor. Therefore, both Form 941ME and Form ME UC-1 will be filed with MRS. ( Maine Tax Alert 3, 07/01/2014 .)

MinnesotaSales And Use Tax — Athletic facilities, recreational areas.
The Minnesota Department of Revenue has revised a release that discusses the application of the sales tax to athletic facilities, recreational areas, resorts, and campgrounds. The revised release notes that starting July 1, 2014, retailers may buy coin-operated entertainment and amusement devices exempt from tax if they sell admissions to or use of amusement devices. Examples of coin-operated entertainment and amusement devices include fortune-telling machines, pool tables, batting cages, and jukeboxes. Vending machines, lottery devices, or gaming devices do not qualify for this exemption. The release also discusses the taxability of: admissions, membership fees; entry fees to competitive events; facility rental; lessons; lodging and seasonal rental contracts; ski areas; game farms; and camp fees. The release also gives examples of taxable and nontaxable sales. ( Minnesota Sales Tax Fact Sheet 123, 07/01/2014 .)

MinnesotaSales And Use Tax — Digital products—webinars.
The Minnesota Department of Revenue has revised a release that discusses the application of the sales tax to digital products. The revised release notes that starting July 1, 2014, charges for live or prerecorded audio and audiovisual presentations (webinars) are exempt from sales tax when they are accessed electronically if they meet the following requirements: (1) admission to the in-person presentation is not subject to tax; (2) online participants and the presenter can interact with each other while participants view the presentation; and (3) any limits on the amount of interaction (and when it occurs) are the same for both online and in-person participants. Tuition is not taxable for classes a student attends online as part of a course of study at a post-secondary school, college, university, or private career school. ( Minnesota Sales Tax Fact Sheet 177, 07/01/2014 .)

MinnesotaSales And Use Tax — Computer software maintenance contracts.
The Minnesota Department of Revenue has revised a release that discusses the application of the sales tax to computer software. The release notes that optional maintenance contracts are taxable if they include any taxable items, unless the cost of these items is insignificant. These contracts provide: repair and replacement parts; and consumable items at no cost to the customer. Optional warranty contracts (extended warranties) that cover future unexpected repair costs are not taxable. However, sales or use tax does apply to the parts used for contracted repairs. Repair or replacement parts are not taxable when covered by a manufacturer’s warranty or recall. These repair or replacement parts are exchanges of inventory. The release provides examples of when tax is due and who pays it in such circumstances. ( Minnesota Sales Tax Fact Sheet 134, 07/01/2014 .)

MinnesotaSales And Use Tax — Coin-operated entertainment and amusement devices.
The Minnesota Department of Revenue has revised a release that discusses the application of the sales tax to vending machines and other coin-operated devices. The revised release notes that starting July 1, 2014, retailers may buy coin-operated entertainment and amusement devices exempt from tax if they sell admissions to or use of amusement devices. Examples of coin-operated entertainment and amusement devices include fortune-telling machines, pool tables, batting cages, and jukeboxes. Vending machines, lottery devices, or gaming devices do not qualify for this exemption. ( Minnesota Sales Tax Fact Sheet 158, 07/01/2014 .)

MinnesotaSales And Use Tax — Hotels and lodging facilities.
The Minnesota Department of Revenue has revised a release that discusses the application of the sales tax to hotels and lodging facilities. The revised release notes that starting July 1, 2014, retailers may buy coin-operated entertainment and amusement devices exempt from tax if they sell admissions to or use of amusement devices. Examples of coin-operated entertainment and amusement devices include fortune-telling machines, pool tables, batting cages, and jukeboxes. Vending machines, lottery devices, or gaming devices do not qualify for this exemption. ( Minnesota Sales Tax Fact Sheet 141, 07/01/2014 .)

MinnesotaSales And Use Tax — Schools—webinars and fundraising.
The Minnesota Department of Revenue has revised a release that discusses the application of the sales tax to sales and purchases to and by schools. The revised release notes that starting July 1, 2014, charges for live or prerecorded audio and audiovisual presentations (webinars) are exempt from sales tax when they are accessed electronically if they meet the following requirements: (1) admission to the in-person presentation is not subject to tax; (2) online participants and the presenter can interact with each other while participants view the presentation; and (3) any limits on the amount of interaction (and when it occurs) are the same for both online and in-person participants. Tuition is not taxable for classes a student attends online as part of a course of study at a post-secondary school, college, university, or private career school. The release also notes that starting January 1, 2015, the first $20,000 of fundraising annual gross receipts for youth and senior citizen groups is exempt from sales tax (currently, the limit is $10,000). ( Minnesota Sales Tax Fact Sheet 111, 07/01/2014 .)

MinnesotaSales And Use Tax — Local governments.
The Minnesota Department of Revenue has revised a release that discusses the application of the sales tax to local governments. Local governments are allowed to buy some goods and services without paying sales and use tax. The release notes that starting July 1, 2014, for purposes of this exemption, the term “local governments” means statutory or home rule charter cities, counties, townships, and qualifying cooperative agreements. The list of taxable purchases that do not qualify for this exemption have been limited. ( Minnesota Sales Tax Fact Sheet 176, 07/01/2014 .)

MontanaReal Property — Verizon and Department of Revenue reach property tax settlement.
The Montana Department of Revenue has issued a press release advising that it has reached a settlement with Verizon Wireless over how the Department valued the company’s centrally assessed property for tax years 2009 through 2014. The Department and Verizon settled two disputes. The first dispute involved the Department’s assessment of $46,960,674 in property taxes for tax years 2009 through 2013. Of that amount, Verizon paid $32,811,374 under protest in dispute over the appraisal methods that the Department used in calculating Verizon’s property taxes. Specifically, Verizon disputed the Department’s methods of assessing intangible personal property, such as licenses, franchise fees, and contracts not to compete. As part of the settlement, the state and counties will keep $22,284,007, and Verizon will receive a refund of $10,527,367. The property taxes assessed for tax year 2014 are part of the agreement but Verizon has not yet received its tax bill for 2014. A second dispute involved the amount of property taxes assessed in 2010 for Alltel Wireless. Verizon was responsible for those taxes. Verizon paid $4,692,793 in taxes, of which the company protested $3,736,795. As part of the agreement, the state and counties will keep $2,952,480 and will refund Verizon $784,315. In settling with Verizon, Revenue Director Mike Kadas explained that the Department took into consideration the Supreme Court’s Gold Creek decision, which compelled the Department to revise how it values intangible property. Kadas further noted that the resolution reached is a good one and it frees up revenue that can now go towards funding the services the state and counties provide. (Verizon and the Montana Department of Revenue reach settlement of property valuation dispute, Mont. Dept. of Rev., 07/02/2014.)

New JerseyCorporate Income Tax — Owner’s New Jersey withholding tax liability not discharged by bankruptcy.
The New Jersey Tax Court has ruled that the bankruptcy of a corporation did not discharge the corporation owner’s debt for withholding taxes owed to New Jersey. Even if the corporate-level debt were relieved, the owner was a responsible person who could be held personally liable for that debt. (McGlone v. Director, Division of Taxation, N.J. Tax Ct., Dkt. No. 006378-2003, 06/25/2014.)

New JerseyPersonal Income Tax — Owner’s withholding tax liability not discharged by bankruptcy.
The New Jersey Tax Court has ruled that the bankruptcy of a corporation did not discharge the corporation owner’s debt for withholding taxes owed to New Jersey. Even if the corporate-level debt were relieved, the owner was a responsible person who could be held personally liable for that debt. (McGlone v. Director, Division of Taxation, N.J. Tax Ct., Dkt. No. 006378-2003, 06/25/2014.)

New JerseyReal Property — Assessed valuation of drugstore reduced.
The New Jersey Tax Court (Court) has reduced the assessed valuation of a retail property that was operated as a pharmacy from $2,050,000 in 2009 and 2010 to $1,630,000 in 2009 and $1,452,800 in 2010. Both the taxpayer’s expert and the township used the income approach to value the property. The taxpayer’s expert convinced the Court that while the current tenant was paying $25.71 per square foot for the property, the market rents paid for similar properties for the assessment dates in question were declining and that $24 per square foot in 2009 and $22 per square foot in 2010 represented the market rents for 2009 and 2010. The taxpayer’s expert was also able to convince the Court that its proposed 5% collection and vacancy allowance was much more reasonable than the township’s 0% allowance for such costs. (CVS Pharmacies v. Township of Medford, N.J. Tax Ct., Dkt. Nos. 006576-2009; 004455-2010, 07/02/2014.)

New MexicoCorporate Income Tax — New Mexico—Assessment date determines whether penalty applies.
The taxpayer was liable for a penalty from the time of assessment by the Department. On January 17, 2014, and February 12, 2014, the Department issued six assessments to the taxpayer for penalty and interest related to withholding tax for the tax periods ending May 31, 2013, through October 31, 2013. The assessment for the period ending September 30, 2013, also included less than a dollar of tax. The taxpayer filed a protest to the assessments. After hiring a new contract employee in May 2013, who was to be in charge of payroll, some miscommunication between the taxpayer and this new employee resulted in withholding taxes not being paid by the taxpayer from May through October 2013. During this period, the taxpayer was filing its monthly returns and reporting its tax liability accurately. In December 2013, when the taxpayer discovered that the withholding payments had not been made, the taxpayer paid all of the withholding liabilities for the months in question. At the hearing, the taxpayer conceded that it did owe the assessed interest, but argued that the penalty assessed was too severe, as the taxpayer had discovered and corrected the mistake on its own, and that it was the first time it had made a mistake like this. The hearing officer found that new case law finds that penalty applies at the time of assessment by the Department. At the time these assessments were made, the only outstanding tax owed was the amount of less than a dollar in one tax period. As a result, only the minimum penalty of $5.00 per month, for a total of $30.00 should apply in this situation. (In the Matter of the Protest of Exerplay, Inc., N.M. Decision & Order No. 14-27, 07/02/2014.)

New YorkPersonal Income Tax Rates — City of Yonkers withholding tables and methods updated.
The Department of Taxation and Finance has repealed Appendix 10-A of Title 20 NYCRR, enacted a new Appendix 10-A, and amended 20 NYCRR § 251.1(b) to provide the new City of Yonkers withholding tables and other methods for wages and other compensation paid on or after August 1, 2014. The new tables and methods reflect the increase in the rate of the city income tax surcharge on residents from 15% to 16.75% of net state income tax, effective for 2014.

New YorkPersonal Income Tax — City of Yonkers withholding tables and methods updated.
The Department of Taxation and Finance has repealed Appendix 10-A of Title 20 NYCRR, enacted a new Appendix 10-A, and amended 20 NYCRR § 251.1(b) to provide the new City of Yonkers withholding tables and other methods for wages and other compensation paid on or after August 1, 2014. The new tables and methods reflect the increase in the rate of the city income tax surcharge on residents from 15% to 16.75% of net state income tax, effective for 2014.

New YorkPersonal Income Tax — Taxpayer not entitled to credit for tax paid to Massachusetts.
An administrative law judge (ALJ) has determined that a New York city resident was not entitled to a resident credit for taxes she paid to Massachusetts on capital gain reported by a partnership in which she had an interest. The Division of Taxation argued that the sale of a partnership interest is the sale of an intangible asset that is not taxable to a nonresident individual, and, therefore, the taxpayer’s sale of her partnership interest was not properly subject to tax in Massachusetts. The ALJ agreed, rejecting the taxpayer’s argument that because Massachusetts treated the sales transaction as income derived from a business requiring her to pay tax on the gain in Massachusetts, but New York treated the income as realized on the sale of an intangible asset, New York’s treatment resulted in double taxation. The ALJ stated that it was a fact that Massachusetts treated the investment income as derived from a business conducted in that state, but to qualify for the resident credit the taxpayer was required to show that the tax imposed by Massachusetts was on income that resulted from the sale of an intangible asset. Since Massachusetts did not treat the income as income from the sale of an intangible, the ALJ concluded that the taxpayer was not entitled to a resident credit. The ALJ also rejected the taxpayer’s claim that the refusal to grant her a resident tax credit was double taxation, which is impermissible under the U.S. Constitution, and found that subsequent statutory amendments that would allow for the claimed resident credit under the facts presented where unavailable as the legislature did not state that the amendments would apply retroactively. (In the Matter of the Petition of Beatrice Goldman, NYS Division of Tax Appeals, ALJ, 824682, 06/26/2014 .)

OhioCommercial Activity Tax — Petroleum activity tax—blended gallons reporting.
The Ohio Department of Taxation has issued an information release that provides guidance to suppliers on the timing of the application of the petroleum activity tax (PAT) when the supplier blends fuel on which the PAT has already been reported with fuel that has not yet been reported. The release states that where a supplier acts as an importer of motor fuel such that the imported motor fuel is commingled with motor fuel first received outside of the distribution system in Ohio, the supplier would need to ensure that motor fuel that relates to the supplier’s gross receipts from the first sale of motor fuel outside the distribution system is reported prior to any motor fuel that it purchased from another supplier liable for the PAT. For example, ABC receives motor fuel from several motor fuel dealers, including those registered as suppliers for purposes of the PAT. ABC receives 1,000 gallons of motor fuel from XYZ terminal in Ohio and delivers the motor fuel to its bulk storage facility in Ohio. XYZ (the selling terminal) is subject to the PAT and includes in XYZ’s gross receipts amounts received from this sale to ABC. Subsequently, ABC purchases 750 gallons of motor fuel from a motor fuel wholesaler in Kentucky and brings it into Ohio for storage in its bulk storage facility. ABC is responsible for including in its gross receipts the amounts received from the sale of the 750 gallons of motor fuel it purchased and imported from Kentucky when that motor fuel is sold to a location in Ohio. If ABC sells 1,250 gallons of motor fuel to a retail location in Ohio, ABC would report its gross receipts from the sale of the 750 gallons of motor fuel on the PAT return and not 250 gallons, or the amount in excess of the original 1,000 gallons purchased from XYZ, because it has to first report any gross receipts from the motor fuel it received from the Kentucky wholesaler before accounting for the motor fuel received from the terminal in Ohio. (Ohio Tax Information Release 2014-06, 07/01/2014.)

OhioFuels And Minerals — Petroleum activity tax—blended gallons reporting.
The Ohio Department of Taxation has issued an information release that provides guidance to suppliers on the timing of the application of the petroleum activity tax (PAT) when the supplier blends fuel on which the PAT has already been reported with fuel that has not yet been reported. The release states that where a supplier acts as an importer of motor fuel such that the imported motor fuel is commingled with motor fuel first received outside of the distribution system in Ohio, the supplier would need to ensure that motor fuel that relates to the supplier’s gross receipts from the first sale of motor fuel outside the distribution system is reported prior to any motor fuel that it purchased from another supplier liable for the PAT. For example, ABC receives motor fuel from several motor fuel dealers, including those registered as suppliers for purposes of the PAT. ABC receives 1,000 gallons of motor fuel from XYZ terminal in Ohio and delivers the motor fuel to its bulk storage facility in Ohio. XYZ (the selling terminal) is subject to the PAT and includes in XYZ’s gross receipts amounts received from this sale to ABC. Subsequently, ABC purchases 750 gallons of motor fuel from a motor fuel wholesaler in Kentucky and brings it into Ohio for storage in its bulk storage facility. ABC is responsible for including in its gross receipts the amounts received from the sale of the 750 gallons of motor fuel it purchased and imported from Kentucky when that motor fuel is sold to a location in Ohio. If ABC sells 1,250 gallons of motor fuel to a retail location in Ohio, ABC would report its gross receipts from the sale of the 750 gallons of motor fuel on the PAT return and not 250 gallons, or the amount in excess of the original 1,000 gallons purchased from XYZ, because it has to first report any gross receipts from the motor fuel it received from the Kentucky wholesaler before accounting for the motor fuel received from the terminal in Ohio. ( Ohio Tax Information Release 2014-06, 07/01/2014.)

OhioSales And Use Tax — Food service operations records.
Ohio Department of Taxation reminds vendors conducting food service operations who opt to keep 14 days of sales records per calendar quarter in lieu of records of all sales from their food service operations that they must keep records on the following days for the first calendar quarter (April 1, 2014 through June 30, 2014): April 2, 7, 10, 19, 27; May 6, 9, 17, 25; and June 2, 6, 10, 18, 26. (Record Retention Notice, Ohio Dept. Tax., 07/03/2014.)

PennsylvaniaStamp Tax — 2013 common level ratios—valuation factors.
The Pennsylvania Department of Revenue has issued new common level ratio real estate valuation factors for purposes of calculating realty transfer tax. These ratios, which are the mathematical reciprocals of the actual common level ratios, generally apply to documents accepted for filing from July 1, 2014 through June 30, 2015; except with respect to Philadelphia, which has a revised common level ratio effective January 1, 2014 based on an assessment base change. (Notice: Realty Transfer Tax; 2013 Common Level Ratio; Real Estate Valuation Factors, Pa. Bull. Doc. No. 14-1408, Pa. Bull., Vol. 44, No. 27, 07/05/2014.)

TennesseeCigarette, Alcohol & Miscellaneous Taxes — Collections by regulatory and health-related boards.
The Tennessee Attorney General has opined that authorizing the transfer of fees collected by the regulatory and health-related boards would not warrant their characterization as taxes so long as such transfers involved only a relatively small portion of the total fees collected by each board. Even if the transfer of such fees caused them to be deemed taxes instead of fees, the General Assembly could still appropriate them to balance Tennessee’s budget. (Attorney General Opinion , 07/01/2014.)

TexasInsurance — Premium tax prepayments.
The Texas Comptroller of Public Accounts has issued a monthly newsletter that reminds licensed insurance companies, licensed captive insurers, and miscellaneous organizations with a net tax liability for the previous calendar year in excess of $1,000 that they must prepay premium tax semi-annually. The second semi-annual prepayment must be made on or before August 1, 2014. The first semi-annual prepayment should have been made on or before March 1, 2014, or at the same time that the annual statement was required to be filed. Since March 1, 2014, was a Saturday, the next business day, March 3, 2014, became the due date. ( Texas Tax Policy News 5, 07/01/2014 .)

TexasReal Property — Local rollback elections and tax freezes.
The Texas Attorney General has opined that if a municipality with an ad valorem tax rate of zero: (1) adopts a tax rate above zero, then the qualified voters of the municipality by petition can require that an election be held to determine whether or not to reduce the ad valorem tax rate back to zero; and (2) receives a properly filed petition from 5% of authorized voters, then it must hold an election to determine whether to freeze the total amount of ad valorem taxes imposed on property that is subject to a residence homestead exemption owned by a person that is disabled or is 65 years of age or older. The Texas Tax Code provides that if a municipality adopts a tax rate that exceeds the rollback tax rate, the qualified voters of the municipality by petition can require that an election be held to determine whether or not to reduce the tax rate adopted for the current year to the rollback tax rate. The Texas Legislature has not provided an exception to the rollback election procedure for instances when a taxing unit has ceased levying taxes. The Texas Constitution requires a properly petitioned city to hold an election to determine whether to freeze the ad valorem taxes imposed on the homestead of certain individuals when the current ad valorem tax rate is zero. In authorizing a tax freeze for homestead exemptions, the plain language of this constitutional provision does not provide any exceptions for instances when a taxing unit has a tax rate of zero. (OAG, GA-1070 , 07/02/2014.)

TexasSales And Use Tax — Sales tax holiday reminder and updates.
The Texas Comptroller of Public Accounts has issued a monthly newsletter that reminds taxpayers that this year’s annual sales tax holiday begins at 12:01 a.m. on Friday, August 8, 2014, and ends at midnight on Sunday, August 10, 2014. During this 3-day period, Texas shoppers get a break from state and local sales taxes on purchases of school supplies, clothing, and most backpacks priced under $100. A new “Garage Sales and Texas Sales Tax” publication has been created to clarify when sales tax is due on personal items sold at garage sales and similar sales. It defines “occasional” sales when tax is not due, and explains when a seller must have a sales permit and collect tax. The publication also covers tax responsibilities for group sales and for artists and other crafts sellers. ( Texas Tax Policy News 5, 07/01/2014 .)

VermontPublic Utilities — Changes to universal service fund surcharge.
L. 2014, H297, effective 06/16/2014 , creates a new Division for Connectivity within the Agency of Administration to become the successor to the Vermont Telecommunications Authority which will cease operations beginning July 1, 2015. The new division is charged with ensuring affordable access to telecommunication services throughout the state. The legislation also sets the universal service fund surcharge at a flat 2% of retail telecommunications service, effective July 1, 2014. Previously, the rate of the surcharge was determined annually by the public service board, but could not exceed 2%. The legislation also defines “service area” to mean: (1) in the case of a rural telephone company, the company’s study area as approved by the Federal Communications Commission; or (2) in the case of a local exchange carrier, other than a rural telephone company, the carrier’s local exchange service area as approved by the Public Service Board. It also defines “service location” to mean a business or residential geographic point of contact of a telecommunications service for the enhanced-911 network. The number of service locations in each exchange will be determined by the Department of Public Service in periodic updates to the State Telecommunications Plan based on analysis of the locations in the database of the Vermont Enhanced-911 Board.

 

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