Tax Headlines

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Senate Takes Aim Again at Big Oil

Senate Majority Leader Harry Reid, D-Nev., plans to take up another bill aimed at taxing big oil in order to pay for renewable energy tax credits that are set to expire. The Senate on March 19 began the legislative process for the Repeal Big Oil Tax Subsidies Bill (Sen 2204), offered by Sen. Robert Menendez, D-N.J., which would repeal five tax subsidies for the five largest integrated oil and gas companies and use the revenue to extend expired and expiring renewable energy tax incentives.

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House GOP Unveils Fiscal Year 2013 Budget Blueprint

House Budget Committee Chairman Paul Ryan, R-Wis., released the GOP budget for fiscal year 2013, largely a political document intended to show Republican priorities during the current election year. Called “The Path to Prosperity. A Blueprint for American Renewal,” the GOP budget is intended to be in contrast to Democratic spending and tax proposals that were outlined in President Obama’s budget proposal in February (TAXDAY, 2012/02/14, W.1). The GOP budget would reform the tax code and eliminate special interest loopholes, while simultaneously lowering tax rates and extending the Bush-era tax cuts. According to Ryan, his budget would promote job creation and end tax breaks that mainly benefit the politically well-connected.

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Indiana ~ Sales and Use Tax: Online Service Providers’ Promotional Materials Were Taxable

An out-of-state online service provider was liable for Indiana use tax on promotional materials sent to Indiana residents from out-of-state producers because the service provider purchased the production and mailing of the promotional materials in retail transactions. Relying on statutory law, the Indiana Supreme Court reasoned that a sale is a taxable retail sale whether or not the property transferred was in the same form as it was when acquired.

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Connecticut ~ Sales and Use Tax: School Teachers Were Representatives of Corporation For Purposes of Nexus

School teachers were in-state representatives of a bookseller corporation for purposes of establishing nexus to justify the imposition of Connecticut sales and use taxes. Connecticut law provides that “engaged in business in the state” is defined to mean and include but not be limited to a number of activities that subject an out-of-state retailer to sales and use taxation, one of which is having any representative, agent, salesman, canvasser, or solicitor who operates in Connecticut to sell, deliver or take orders.

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California ~ Personal Income, Sales and Use Taxes: Agreement Reached Between Governor, Legislative Leaders, and Unions on Fall Tax Initiative

California Gov. Jerry Brown, legislative leaders, and the Restoring California Coalition (comprised of the California Federation of Teachers, California Calls, the Courage Campaign and ACCE) announced that they have joined together to place a single revenue initiative on the November 2012 ballot that, if passed, would provide a temporary increase in the personal income tax rate for taxpayers with incomes exceeding $500,000 as well as a temporary increase in the sales and use tax rate. If passed, the initiative would increase the sales tax rate by 0.25 cent, which would sunset after 2016. The governor had previously proposed a 0.5-cent increase. Personal income tax rates would increase by:

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Tax Court Had Jurisdiction over U.S.-U.S. Virgin Island Income Tax Matter; IRS Notice of Deficiency Valid (Huff, TC)

A notice of deficiency issued by the IRS to a U.S. citizen who claimed to be a bona fide resident of the U.S. Virgin Islands for the tax years at issue was valid; therefore, the court had jurisdiction. The notice of deficiency had been issued after it was determined that the individual did not qualify for the income exclusion under Code Sec. 932(c)(4) and that he should have filed returns and paid taxes to the IRS.

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Filing, Payment Deadlines Extended for Tornado, Storm, Flooding and Landslide Victims in West Virginia (WVA-2012-01)

The IRS has extended return-filing and payment deadlines for victims of severe storms, tornadoes, flooding, mudslides and landslides that started on February 29, 2012, in parts of West Virginia and resulting in the counties of Lincoln, Marion and Wayne being declared a federal disaster area. Certain deadlines falling on or after February 29, 2012, and on or before May 31, 2012, have been postponed to May 31, 2012. This includes the April 17 deadline for filing individual income tax returns, for making income tax payments and for making 2011 contributions to IRA plans.

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Filing, Payment Deadlines Extended for Tornado, Storm and Flooding Victims in Tennessee (TN-2012-14)

The IRS has extended return-filing and payment deadlines for victims of severe storms, tornadoes, straight-line winds, and flooding that started on February 29, 2012, in parts of Tennessee and resulting in the counties of Bradley, Claiborne, Cumberland, DeKalb, Hamilton, Jackson, McMinn, Monroe, Overton and Polk being declared a federal disaster area. Certain deadlines falling on or after February 29, 2012, and on or before May 31, 2012, have been postponed to May 31, 2012. This includes the April 17 deadline for filing individual income tax returns, for making income tax payments and for making 2011 contributions to IRA plans.

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New Jersey ~ Sales and Use Tax: Assembly Passes Bill Enumerating Certain Persons as Sellers, Including Affiliate Nexus Provisions

The New Jersey Assembly has passed a bill that would enumerate certain persons who are deemed to be sellers responsible for the collection of sales and use tax and to clarify the tax collection responsibilities of certain other persons and agents. Specifically, the bill would revise the current definition of a “seller” to specify that each of the following persons would be deemed to be a seller and would be required to register as a seller and collect and remit the tax determined to be due:

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