What Local Taxes Do You Charge in Texas?

What local tax to charge in Texas can be very tricky. And Texas, recently changed the statute on the MTA tax making it potentially more complex. The Comptroller of Public Accounts recently issued a letter with some explanation that is helpful. Here it is:

You May Never Want to Do Business in NJ After Reading This

This article by Jason Method of the Gannett News Service may convince you never to do business in NJ.   He tells the story of South Carolina businessman J. Barry Godwin whose company builds and delivers Stingray power boats.

Read what happened to one of his truck drivers who was merely passing through the state.

TN Agrees Telecom Sold to ISP Not Taxable

The Tennessee Department of Revenue issued a Letter Ruling on February 8, 2008 stating that TN could not charge tax on telecommunications sold to an Internet service provider since Federal Law prohibited such taxation. (See TN --Letter Ruling No. 08-08.) If you would like a copy of the full ruling, we can get it for you. Here is their analysis:

Schwarzenegger Sorry That Services Not Taxed in CA

Listen to (I mean read) what CA Governor, Schwarzenegger said last week at a town hall meeting in the Northern California city of Pleasant Hill:

"The way we are taxing. I mean, we are missing a lot out there," the governor said. "There's whole new economies that are developing, service-oriented economies. Manufacturing is going down."

 

So taxing services is on the horizon out there in CA. I would agree with the writer of this article in the Sacramento Bee, that the most likely first target will be telecommunications and cable television. I really have to shake my head though when an elected official thinks any item not taxed is a big dissapointment.

Nebraska Getting Tough

Nebraska has 73 auditors out there trying to find companies who owe tax. This recent article in the Omaha World-Herald describes how the Nebraska Department of Revenue has added about $12.5Million to state coffers in the last 3 years and it all started with an amnesty program. The amnesty program funded the hiring of more auditors and a computer programmer. Let the data mining begin.

How Many Auditors Are Out There?

Here's a rundown of the top 10 states in terms of auditors employed:

1. 730 -- California

No surprise here and probably none of our clients are suprised either. CA is very active with our clients. But usually CA, by any measure you come up with, is pretty much double the size of any other state.

States Share Information on Use Tax Evaders

There was this interesting article in Forbes magazine about the number of states that include a line on their individual state income tax form for people to voluntarily enter how much use tax they owe on their own purchases. The article discussed the various methods used to encourage voluntary compliance. In the end, though, even the most effective approach (which was to provide lookup tables for taxpayers) resulted in only 3% of taxpayers reporting any use tax. That's not very good. Now to quote from the article:

Electricity Held to be Tangible Personal Property in CA

This recent CA appeals court case about coal purchased by a producer of electricity caught my eye. (Searles Valley Minerals Operations, Inc. v. State Board of Equalization, California Court of Appeal, Fourth Appellate District, No. D049905, February 26, 2008). The court held that coal doesn't become part of the final product and therefore cannot be purchased for resale in CA. That could have been expected. The interesting part to me was that they first went through an analysis of whether electricity is even "tangible personal property" for purposes of CA sales/use tax.

Certain Conveyor Equipment Exempt in NY

Here's an interesting Advisory Opinion hot off the presses out of NY that actually favors the taxpayer.  Did you know that conveyors can be exempt in NY if they are used directly and predominantly in production activities? It's the truth, read on for some of the specific facts and some language from the Opinion.