Tax Headlines

1827

Rhode Island ~ Sales and Use Tax: Retailer Not Liable to Consumers for Improper Tax Collection

A Rhode Island trial court granted summary judgment in favor of a computer retailer in a case in which a consumer, individually and on behalf of an uncertified class, alleged that the retailer was negligent and violated the Deceptive Trade Practices Act (DTPA) by improperly collecting Rhode Island sales tax on optional service contracts sold in conjunction with computer hardware. The court concluded that the retailer did improperly charge tax on service contracts that were not taxable, but the retailer’s actions did not constitute negligence or violate the DTPA. The retailer could not be liable to the consumer in negligence for improperly collecting tax because the retailer’s duty with regard to the collection of sales tax is to the state and not to consumers. In addition, the retailer’s conduct did not rise to the level of unfair or deceptive practices under the DTPA.

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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.

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IRS Should Continue to Push for Excellence, Shulman Says (IR-2012-42)

nnovative ideas and improvement should be the IRS’s constant goal, stated IRS Commissioner Douglas H. Shulman at the April 5 National Press Club luncheon in Washington, D.C. Shulman outlined the IRS’s accomplishments from his four-and-half years as commissioner. He stated that the IRS had overcome obstacles and issues related to negative press coverage from the 1990s. Still, he emphasized the need for continuing progress in the years following his expected departure as commissioner in the fall of 2012. Quoting IBM founder Thomas Watson, Shulman said, “Whenever an individual or a business decides that success has been attained, progress stops.” He implied that future IRS progress will require increased federal funding.

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Treasury Security Rate Set for Computing Current Plan Liability for April 2012 (Notice 2012-28)

For pension plan years beginning in April 2012, the IRS has released the corporate bond weighted average interest rate, the permissible range of interest rates used to calculate current plan liability and to determine the required contribution under Code Sec. 412(l) for plan years through 2012, and the current corporate bond yield curve and related segment rates for the purpose of establishing a plan’s funding target under Code Sec. 430(h)(2).

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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.

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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.

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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.

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