Welcome to the October 2018 issue of the Aprio State & Local Tax (SALT) Newsletter
With dozens of different taxes imposed by the 50 states (and thousands of local jurisdictions), we recognize how challenging it is to keep up with current issues and developments. This newsletter is designed to provide insights on developments in state and local taxes including new legislation, regulations, rulings and cases addressing issues such as corporate and personal income taxes, sales and use taxes, nexus, franchise/net worth taxes, etc.
This issue of the newsletter contains articles addressing (i) the growing trend among states to not only require remote sellers to collect sales tax, but also to require marketplace facilitators to do so on behalf of their remote sellers, (ii) a Texas private letter ruling finding that an online clothing retailer has sales tax nexus because it owns clothing in state temporarily during the customer’s “try-on” period, (iii) an Oregon Tax Court decision prohibiting the state from requiring an owner of multiple pass-through entities to report his share of combined income from all entities, (iv) a Minnesota Tax Court opinion denying a sales tax exemption for capital equipment purchased by the taxpayer based on a narrow interpretation of the sales tax exemption statute, and (v) the state tax considerations arising from virtual currency transactions and initial coin offerings, and the need for more state tax guidance specific to this rapidly growing industry.
In case you missed prior issues of this newsletter, please click here. Please note that due to the holidays, our next issue will be a double issue for November/December 2018 and will be issued around mid-December.
If you have any comments, questions or suggestions regarding current or future topics, or if you would like to learn more about Aprio's SALT Practice, please email us at firstname.lastname@example.org. Thank you.
Jeff Glickman, J.D., LL.M.
Partner-in-Charge, State & Local Tax Practice
New Jersey Enacts Marketplace Facilitator Sales Tax Collection Requirement
By Jess Johannesen, SALT manager
States aren’t just enacting rules establishing nexus for remote sellers, they are establishing nexus rules for marketplace facilitators to collect and remit sales tax on behalf of remote sellers.
Texas Rules That Online Clothing Retailer Has Physical Presence Nexus
By Tina M. Chunn, SALT senior manager
Even after Wayfair, physical presence can still create nexus, and taxpayers that own property that is temporarily located in a state can establish sales tax nexus, as explained in this Texas private letter ruling.
Oregon Rules That Owner is Not Required to Combine Income of Multiple Pass-Through Entities
By Jeff Weinkle, SALT manager
The Oregon Tax Court ruled that the state could not require a resident individual owner of multiple pass-through entities to report the combined income of all of those entities, since combined reporting is authorized for C-corporations only.
Minnesota Tax Court Denies Sales Tax Exemption for Purchase of Capital Equipment
By Alissa Graffius, SALT senior associate
When interpreting sales tax exemptions with ambiguous language, courts generally construe the language narrowly, as was the case in this Minnesota Tax Court decision addressing a sales tax exemption for certain capital equipment purchases.
Aprio's State and Local Tax (SALT) practice advises clients on the state and local tax implications of their business operations, allowing clients to strategically minimize their liabilities and risks. Our team has over 50 years of combined SALT experience working in industry, state departments of revenue, public accounting and private law practice. We specialize in all areas of SALT, including matters related to state tax nexus, corporate and personal income taxes, sales/use tax, franchise/net worth taxes, credits and incentives, and mergers and acquisitions. In addition, we represent clients in administrative matters before state revenue departments around the country, including audit defense and settlement negotiations, pursuing voluntary disclosure agreements and obtaining letter rulings.
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