The California Department of Tax and Fee Administration announced that the state’s Office of Administrative Law has approved amendments to regulations on the state’s remote seller law. The amendments are retroactive to April 1, 2019, the effective date of the legislation.

Under the amended regulations, a remote seller that did not surpass the $500,000 per calendar year threshold in the previous calendar year is required to register and begin collection immediately after the sale that exceeds $500,000 in a current calendar year. Additionally, a remote seller is not obligated to remain registered on January 1 if it did not meet the $500,000 threshold in the previous calendar year, although a remote seller should not close its registration if it anticipates that it will be required to re-register during the calendar year.

Effective April 1, 2020, the Cook County Department of Revenue is no longer applying its amusement tax to sales of paid television to non-residential customers, such as bars and hotels. The amusement tax ordinance never expressly applied to paid television. Rather, in 2007, the Department issued Amusement Ruling #1, which purported to include paid television within the definition of an “amusement.” In a letter recently issued to taxpayers, the Department stated that it will no longer collect the tax. The Department attributes its policy change to the “result of rulings recently issued by the Department of Administrative Hearings.” This position change is only prospective. The implication is that the Department will not allow any refund claims (which are subject to an unusually short one-year limitations period).

A number of states provide immediate valuation relief for calamities and disasters. Learn how those special property tax relief provisions may apply to the disaster declarations concerning COVID-19 and how your company may benefit from those provisions.

Join Doug Mo, Eric Tresh and Fred Nicely from the Council On State Taxation (COST) on Monday, April 20 at 2 pm ET for a webcast discussion on how these special property tax relief provisions may apply to the disaster declarations concerning COVID-19 .

Register now.

Calling all trivia fans! Don’t miss out on a chance to show off your SALT knowledge!

We will award prizes for the smartest (and fastest) participants.

Today’s Question
What was the first state to adopt a single-factor sales factor formula for apportioning an interstate corporation’s income for state income tax purposes?

E-mail your response to SALTonline@eversheds-sutherland.com.

The prize for the first response to today’s question is a $20 UBER Eats gift card.

Answers will be posted on Monday. Be sure to check back then!

The Office of Tax Appeals (OTA) was established in 2017 as California’s new administrative appeals forum. Born from controversy, the agency was designed to function as an independent and impartial tribunal. Two years in, taxpayers have a better idea about how the OTA will shape California’s corporate tax landscape, but questions still remain. We recently published a three-part series on the OTA in Law360 discussing how the OTA has approached corporate tax issues thus far and identifying the questions yet to be answered.

To provide more background on the agency itself, this alert re-introduces the OTA and the appeals process, providing a refresher on the events leading to the establishment of the state’s new independent tax appeals forum, a description of how the process works and insight on the impact the OTA already is having on California’s tax landscape.

Read the full Legal Alert here.

On April 13, 2020, legislation (S.8166) was introduced in the New York State Senate that would expand the sales tax base to digital advertising services. “Digital advertising services” is defined as “advertisement services on a digital interface, including advertisements in the form of banner advertising, search engine advertising, interstitial advertising, and other comparable advertising services which markets or promotes a particular good, service, or political candidate or message.”

S.8166 is the second digital advertising tax bill to be introduced in the New York State Senate this session. In March, legislation (S.8056) was introduced that would establish a tax similar to the digital advertising gross revenues tax that recently passed the Maryland General Assembly. But, unlike S.8056, the sales tax expansion would not be limited to advertisements “that use personal information about the people the ads are being served to.” Rather, the tax base is advertisements that “market” or “promote” “a particular good, service, or political candidate or message.” (This language was previously used in Nebraska’s attempt to expand its sales tax base to digital advertisements.)

If passed, the tax’s revenue would be paid into a special fund for providing zero interest refinancing of eligible undergraduate education loans by the higher education services corporation. The act would sunset after 5 years.

This podcast discusses state and local tax issues arising from the COVID-19 crisis including:

  • The impact on state credits and incentives
  • The impact to property tax valuations
  • Tax withholding obligations
  • Emergency powers of Governors and Tax Commissioner

 

 

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Thank you to everyone who participated in last week’s trivia question!

Last Week’s Question:
The Internal Revenue Service was created by which U.S. President?

The Answer:
In July 1862, President Abraham Lincoln and Congress passed the Revenue Act of 1862, creating the office of Commissioner of Internal Revenue and enacting a temporary income tax to pay for expenses arising from the Civil War.

Keep an eye out for our next trivia question on Wednesday!

In a recent private letter ruling, the South Carolina Department of Revenue concluded that a motor vehicle rental company is responsible for remitting sales tax on short-term vehicle rentals entered into through its online peer-to-peer rental program. Applying South Carolina’s statutory definition of “gross proceeds of sales,” which includes the proceeds of sales through a marketplace by a marketplace facilitator, the Department found that the peer-to-peer short-term vehicle rentals in South Carolina are subject to sales tax. Specifically, the Department found that the company is a marketplace facilitator within the state’s statutory definition because of its website and mobile application where third parties advertise and rent vehicles. Therefore, the Department concluded that the company, as a marketplace facilitator, must remit sales tax on short-term vehicle rentals entered into through its online peer-to-peer rental program.

SC Private Letter Ruling No. 20-2.