State Tax Headlines

1789

New York ~ Corporate, Personal Income Taxes: Computation of MCTMT for Professional Employer Organizations Explained

The New York Department of Taxation and Finance has issued a memorandum explaining a recent amendment (TAXDAY, 2012/04/03, S.13) that provides professional employer organizations (PEOs) with a new method to compute the metropolitan commuter transportation mobility tax (MCTMT) for calendar quarters beginning on or after April 1, 2012. A PEO is considered the employer of record of the employees of its clients and of its own organization. Therefore, the PEO is liable for the MCTMT due, if any, for each of its clients and for itself.

read more

Texas ~ Insurance Tax: Guidance Issued Regarding Independently Procured Insurance

The Texas Comptroller has issued a new tax publication regarding changes to independently procured insurance that became effective July 21, 2011. The Nonadmitted and Reinsurance Reform Act (NRRA) passed as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act in 2010. Texas laws that relate to surplus lines and independently procured insurance were revised to comply with the provisions of the NRRA that became effective on July 21, 2011.

read more

Louisiana ~ Corporate Income, Franchise Taxes: House Passes Bill to Expand Single Sales Factor Apportionment

The Louisiana House of Representatives has passed a bill that, if enacted, would extend use of the single sales factor apportionment formula for corporate income and franchise tax purposes to certain qualified businesses. Currently, the single sales factor formula is only available if a business’s income is derived primarily from manufacturing or merchandising. If enacted, the bill would apply for all corporate income tax periods beginning after 2012, and for all corporation franchise tax periods beginning after 2013.

read more

West Virginia ~ Corporate Income Tax: Water’s-Edge Reporting Clarified

West Virginia has enacted legislation clarifying which entities are to be included in a water’s-edge group for purposes of corporate net income tax. A corporation organized outside the United States that is included in a water’s-edge combined group and has an item of income that is exempt from federal income tax pursuant to a qualified treaty is to be considered included in a combined group only with regard to any items of income that are not exempt, taking into account items of expense and apportionment factors associated with such items of nonexempt income.

read more

Colorado ~ Sales and Use Tax: Remote-Seller Reporting Requirements Unconstitutional

The U.S. District Court of District of Colorado has declared unconstitutional, and issued a permanent injunction against enforcement of, a statute and regulations that require an out-of-state seller not obligated to collect Colorado sales tax to notify its Colorado customers of their obligation to self-report and pay use tax; provide its Colorado customers with an annual report detailing the customer’s purchases from the seller in the previous year; and provide the Colorado Department of Revenue with an annual report that includes the name, address, and total amount of purchases of each of the seller’s Colorado customers.

read more

Washington ~ Business and Occupation Tax: Imposition of Seattle B&O Tax on Auto Manufacturer’s Wholesale Sales to Dealerships Upheld

The federal Import-Export Clause did not prohibit the city of Seattle from imposing its business and occupation (B&O) tax on an automobile manufacturer’s wholesale sales of imported vehicles to dealerships in the city. The Washington Court of Appeals analyzed three factors under Import-Export Clause case law and determined first that the tax does not burden or interfere with federal government regulation or commerce.

read more

Maine ~ Personal Income Tax: Senate Revives Tax Rate Bill

The Maine Senate has passed a revised version of a bill that, if enacted, would gradually reduce personal income tax rates in the future until there is a single rate of 4%. The rate reductions would be funded by excess revenue deposited into the Tax Relief Fund for Maine Residents. The bill was previously passed by the Maine Senate (TAXDAY, 2012/03/20, S.14), but then rejected by the Maine House of Representatives (TAXDAY, 2012/03/30, S.8). Under the latest Senate amendment, the percentage of excess revenue that is transferred to the Tax Relief Fund for Maine Residents would be lowered from 40% to 20%.

read more

Vermont ~ Corporate Income Tax: House Passes Bill That Would Increase Corporate Minimum Tax and Update IRC Conformity Date

The Vermont House has passed a bill that, if enacted, would update the state’s conformity with federal income tax laws for Vermont personal and corporate income tax purposes and increase the corporate income minimum tax for corporations with gross receipts in excess of $2 million. If enacted, the legislation would increase the $250 current minimum tax for corporations, other than small farm corporations and digital business entities, to $500 for corporations with gross receipts over $2 million and to $750 for corporations with gross receipts over $5 million. The increase would be effective beginning with the 2012 tax year.

read more