State Tax Headlines

1789

Indiana ~ Practice and Procedure: Assessment Debt Forgiveness, Refund Refusal Not Unconstitutional

An Indiana city’s forgiveness of balances due from homeowners who had elected to pay sewer connection fee assessments over time while refusing to refund any of the assessments paid in lump sum by other homeowners did not violate the Equal Protection Clause of the U.S. Constitution because the city’s distinction had a rational basis. By a 6-3 margin, the U.S. Supreme Court upheld an opinion by the Indiana Supreme Court.

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North Carolina ~ Multiple Taxes: Bill That Would Extend Sunset Dates for Various Incentives Passed by House

Legislation passed by the North Carolina House of Representatives would, if enacted, reinstate the work opportunity tax credit against North Carolina personal income and corporation franchise and income taxes for the 2012 and 2013 tax years and extend the sunset dates from January 1, 2013, to January 1, 2014, for a number of available sales and use tax refunds.

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Washington ~ Miscellaneous Tax: Liquor Privatization Initiative Upheld

The Washington Supreme Court has upheld Initiative 1183, which removed the state from the business of distributing and selling spirits and wine and imposed sales-based fees on private liquor distributors and retailers. The court held that I-1183 did not violate the single-subject rule or the subject-in-title rule for bills and initiatives under Article II, Section 19, of the state constitution.

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Washington ~ Multiple Taxes: Supermajority Vote Requirement for Tax Increases Found Unconstitutional

The Washington statute requiring that legislation seeking to increase taxes be passed by two-thirds of both houses has been found unconstitutional. The supermajority requirement was originally approved by voters via initiative. The court held, however, that the proper method of imposing a supermajority requirement is to amend the Washington Constitution as opposed to pursuing the initiative process. Art II, §22, of the Washington Constitution expressly provides that no bill may become law without a majority vote.

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All States ~ Sales and Use Tax: SST Board Approves Origin-Sourcing Amendment, Discusses Other Issues

At a meeting in Milwaukee on May 23-24, the Streamlined Sales Tax (SST) Governing Board voted to allow member states to apply origin-based sourcing to intrastate sales. The board deferred decisions on an interpretive rule addressing daily deal vouchers and an amendment to the essential clothing provision. The status of federal remote-seller legislation was also discussed. The State and Local Advisory Council (SLAC) also met in Milwaukee on May 22 and discussed its work on daily deal vouchers, digital product sourcing, and credits for taxes paid to other states.

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Virginia ~ Sales and Use, Miscellaneous Taxes: FY 2012 “Caboose” Budget Legislation Limits Taxpayers Subject to Accelerated Payment Requirements

Virginia Gov. Bob McDonnell has signed the fiscal year 2012 “caboose” budget bill that, among other things, limits the number of taxpayers that are subject to accelerated retail sales and use tax payment requirements. Also, the governor indicated that he plans to act on the final biennial budget for fiscal year 2013-2014.

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West Virginia ~ Corporate Income, Franchise Taxes: Licensing Agreement Did Not Create Nexus

Assessments against an out-of-state holding corporation for West Virginia corporation net income tax and business franchise tax on royalties earned from the nation-wide licensing of food industry trademarks and trade names failed to satisfy “purposeful direction” under the Due Process Clause and “significant economic presence” under the Commerce Clause of the U.S. Constitution and, therefore, were invalid.

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