Shaking things up in state and local tax
Shaking things up in state and local tax
By Ted Friedman and Jonathan Feldman
The Utah Supreme Court held that optional liability waiver fees paid by customers along with lease-to-own rental payments were not subject to sales and use tax. Customers that choose to pay this extra fee are not required to reimburse the corporation for any loss if the goods are damaged…
By Michael Penza and Timothy Gustafson
The Utah State Tax Commission ruled that a Utah-based manufacturing and marketing company’s payroll factor must include compensation paid to a third-party “professional employer organization” (PEO) pursuant to a lease agreement for employees working at the taxpayer’s Utah facilities. The employees signed employment agreements with the PEO, and the…
By Kathryn Pittman and Andrew Appleby
The Utah Department of Revenue concluded that gift codes sold by an out-of-state seller (Gift Code Issuer) to Utah consumers were not subject to sales and use tax and that specified activities conducted by third parties in Utah relating to such sales of gift codes did not create nexus…
We recently launched the Sutherland SALT Digital Economy Forum, which provides comprehensive state tax resources regarding the taxation of the digital economy. Following is a summary of recent digital economy administrative guidance, noteworthy cases and legislation. If you would like to learn more about the Sutherland SALT Digital Economy Forum or any of the issues covered here, please contact us.
Administrative Guidance
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Continue Reading Digital Economy Update: Administrative Guidance, Noteworthy Cases and Legislation
On March 22, 2012, Utah Governor Gary Herbert signed House Bill 384 (2012) into law, expanding the types of companies that are required to collect and remit Utah sales and use tax. HB 384 requires sellers that hold “substantial ownership interests” in certain “related sellers” to collect and remit Utah sales and use tax. Today, the Utah State Tax Commission released guidance on how to determine whether a business entity’s activities trigger the state’s new affiliate nexus law. The new nexus regulations go into effect on July 1, 2012.
The new affiliate nexus law, Utah Code Ann. § 59-12-107(2)(b), treats a seller as if it is selling tangible personal property, a service, or a product transferred electronically for use in Utah and will be required to collect and remit sales and use taxes if:…
Continue Reading Utah Quietly Expands Affiliate Nexus Statute
The battle over the ad valorem taxation of intangible property rages on in the western states. On June 3, 2011, 15 counties were dealt a heavy blow when the Utah Supreme Court ruled that accounting goodwill is not subject to property tax. T-Mobile USA, Inc. v. Utah State Tax Comm’n, Nos. 20090298, 20090308 (June…
The Utah State Tax Commission has amended its rules for apportioning financial institution receipts attributable to services from a costs-of-performance sourcing rule to a market-based sourcing rule (Utah Admin. R. R865-6F-32(3)(l)). Effective December 9, 2010, financial institutions must include in the sales factor numerator receipts from services not otherwise specifically addressed in the regulation “if the purchaser of the services receives a greater benefit of the services in Utah than in any other state.”
The change in sourcing methodology is consistent with Utah’s recently amended general corporation apportionment statute, Utah Code Ann. § 59-7-319, which similarly provides for the market sourcing of services (based on where the purchaser receives a greater benefit of the service). The change to market sourcing for financial institutions is another departure by Utah from the Multistate Tax Commission’s (MTC) model regulations for the apportionment of financial institution income. …
Continue Reading Utah Goes Market for Sourcing of Financial Institution Services
