State Tax Headlines

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CCH Webinar: Gift Cards and Unclaimed Property Rules: Maximize Opportunities and Avoid Serious Pitfalls Scheduled for February 22

CCH Tax and Accounting is hosting a live two-hour Webinar, Gift Cards and Unclaimed Property Rules: Maximize Opportunities and Avoid Serious Pitfalls, on Wednesday, February 22, 2012, at 1 p.m. Eastern; noon Central; 11 a.m. Mountain; 10 a.m. Pacific. This two-hour CCH Webinar, presented by Christina Edson, J.D., LL.M. and Mark Siegel, M.S.T., C.P.A., both senior managers at BDO, will discuss current trends and issues affecting state unclaimed property laws as they pertain to gift cards and gift certificates.

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Texas ~ Corporate Income Tax: Constitutional Challenge Dismissed for Lack of Jurisdiction

The Texas Supreme Court dismissed, for lack of jurisdiction, an original proceeding brought by a group of corporations (taxpayers) which claimed that the Texas franchise tax is unconstitutional. The taxpayers had argued that the tax violates the Equal and Uniform Clause of the Texas Constitution and the Equal Protection, Due Process, and Commerce Clauses of the United States Constitution.

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Pennsylvania ~ Corporate Income Tax: Bill Would Create Intangible Expense Addback, Implement Single Sales Factor

Legislation introduced in the Pennsylvania House of Representatives would create a corporate income tax addback for intangible expenses and would implement a single sales factor beginning in 2013. If enacted, the bill would also increase the net loss deduction, while decreasing the corporate net income tax rate, yearly beginning in 2014.

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West Virginia ~ Property Tax: Attorney Representation Required for Appeals by Corporations

The West Virginia Supreme Court of Appeals held that the portion of a statute allowing a non-lawyer agent to appeal a property tax ruling of a county board of equalization and review to the circuit court and to engage in activities that constitute the practice of law is unconstitutional because it is a legislative encroachment on the court’s exclusive authority to define, regulate, and control the practice of law. The taxpayer, a corporation disputing the county assessor’s valuation of real estate owned by the corporation, was represented in its appeals to the circuit court by its vice-president rather than a licensed attorney. After the circuit court dismissed the corporation’s appeals because it failed to retain a lawyer, the taxpayer appealed.

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Utah ~ Sales and Use Tax: Nexus Bill Requiring Buyer Notice Introduced

A sales and use tax nexus bill that would impose buyer notice and other requirements on out-of-state sellers has been introduced in the Utah Senate. The bill would (1) require certain out-of-state sellers to give Utah customers notice of their potential Utah use tax liability on their purchases, and (2) prohibit such sellers from representing that no sales tax is due unless certain conditions are met, including the seller knowing that tax is not due.

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New Mexico ~ Corporate Income Tax: Combined Reporting, Rate Reduction Bill Passed by Senate

The New Mexico Senate has passed a bill that would reduce the highest corporate income tax rate and require combined reporting for certain unitary businesses. If the bill is enacted, the corporate income tax rate for taxpayers with net income over $1 million would decrease from 7.6% to 7.5%. In addition, unitary corporations that provide retail sales of goods in a facility of more than 30,000 square feet under one roof in New Mexico (i.e., “big box” retailers) would be required to file a combined return (combined reporting is currently optional for all unitary corporations). If enacted, the changes would apply to taxable years beginning in 2013 and thereafter.

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Missouri ~ Personal Income Tax: Credit Allowed for Texas Margin Tax, Not Allowed for Washington B&O Tax

The individual partners of a Missouri limited liability partnership that derives substantially all of its income through its ownership interest in a Missouri limited partnership will be allowed to claim a credit on their Missouri individual income tax returns for their proportionate shares of the Texas margin tax paid directly by the limited partnership. However, they will not be allowed to claim a credit on their returns for their proportionate shares of the Washington business and occupation (B&O) tax paid directly by the limited partnership. Missouri law allows individuals to take a credit for the amount of income taxes paid to other states. The Missouri Supreme Court has applied two tests, the “based on” test and the “object” test, to determine whether another state’s tax is an income tax for which Missouri residents can take a credit.

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Pennsylvania ~ Multiple Taxes: Budget Proposal Would Not Raise Any Taxes

Pennsylvania Gov. Tom Corbett’s 2012-2013 budget proposal would not raise taxes for residents and business, would continue the phaseout of the capital stock and franchise tax, and would maintain tax credit programs. Specific credits noted were the research and development tax credit, the job creation tax credit, the film production tax credit, and the neighborhood assistance tax credit.

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