The Texas Court of Appeals held that a taxpayer’s refund claim sufficiently put the Comptroller on notice that the taxpayer claimed a manufacturing exemption. An electricity manufacturer filed a refund claim for sales taxes paid on various types of meters used in its business. The Comptroller denied the claim, and the taxpayer sought an administrative
Sales and Use Tax
Won’t You Stay With Me? Illinois Department of Revenue Determines Sales Stay Sourced to Product Managers
The Illinois Department of Revenue issued a private letter ruling determining that for purposes of the Retailers’ Occupation Tax (ROT) and the Services Occupation Tax (SOT), a taxpayer that procured marketing materials on behalf of its clients properly sourced these sales to the location of the product manager, the employee responsible for procuring the materials.…
Maryland’s General Assembly Overrides Veto of Digital Products Tax
On February 12, 2021, the Maryland General Assembly voted to override Governor Larry Hogan’s veto of House Bill 932, which subjects digital products (both downloads and streaming) to the state’s sales and use tax.
As the Maryland Senate voted 29-17 and the Maryland House of Delegates voted 90-44, the bill received the required three-fifths…
That’s the Way the “Cookie” Crumbles: Massachusetts ATB Abates Sales Tax Assessment Based on “Cookie Nexus” Determination
The Massachusetts Appellate Tax Board (ATB) granted summary judgement for taxpayer U.S. Auto Parts Network, Inc. (U.S. Auto Parts), abating the Department of Revenue’s sales and use tax assessment based on a finding that the online auto parts seller had acquired “cookie nexus” with the state. The Department’s economic nexus regulation, the “Internet Vendor Rule,”…
Deal of a Lifetime: New York Department of Taxation and Finance Rules Coupon Clearing and Processing Products Not Subject to Sales Tax
On June 9, 2020, the New York State Department of Taxation and Finance issued an advisory opinion concluding that coupon clearing and processing products sold to advertisers that issue discount coupons and the retailers that accept them are not subject to New York sales and use tax. The taxpayers’ customers included both advertisers and retailers. …
Marketplace Collection Laws Present Unique Challenges for the Restaurant Industry
The pandemic has changed the physical and economic environment in which restaurants operate. Although food delivery has long been popular for certain types of food, pandemic restrictions and consumer preferences hastened the expansion of food delivery for almost all food and meals. Food delivery can be done either through the restaurant itself or through unrelated…
Texas releases guidance on sales tax for online orders
The Texas Comptroller of Public Accounts recently released guidance explaining the application of Texas sales and use tax to online sales. In particular, online buyers must pay sales and use tax on taxable items delivered or brought into Texas. Remote sellers required to collect tax can do so based on either the shipping destination rate…
California OTA Tells CDTFA Its Audit Manual Has No Authority In Appeal
In a pending precedential decision, the California Office of Tax Appeals (OTA) held that the California Department of Tax and Fee Administration (CDTFA) is bound to follow its own regulation and could not rely on its audit manual to disregard that regulatory authority. Regulation 1595 provides that the agency will use “book value” as the…
Stand by Your Claim: Georgia Court Rules Sellers have Standing to Challenge Georgia Refund Claim Denial for Erroneously Collected Sales Tax
The Georgia Court of Appeals held that a group of telecommunications dealers that were AT&T subsidiaries (collectively “AT&T”) had standing to challenge the Georgia Department of Revenue’s (“DOR”) denial of sales tax refund claims. Effective May 5, 2009, O.C.G.A. §§ 48-2-35 and 48-2-35.1 were amended to provide standing for “dealers” to file refund claims on…
Michigan Supreme Court Holds that Recycling Machines are Eligible for Industrial-Processing Exemption
The Michigan Supreme Court held that sales of bottle and can recycling machines that help retailers comply with Michigan’s bottle-deposit law may qualify for the state’s sales and use tax exemption applicable to machinery used in an industrial-processing activity. The Michigan Department of Treasury unsuccessfully argued that the machines may not qualify for the exemption…