States Are Responding To Revenue Loss
States Are Responding To Revenue Loss

By: Ellie Moffat

At an ever-increasing rate, we are seeing states respond to what is quickly becoming an expanding economic crisis. The pandemic has created a huge revenue shortfall in many states due to the lower amounts of sales and income already collected and/or projected to be collected. Many experts have speculated that because of the loss of revenue, states are likely to take action designed to expand tax revenues and decrease costs. We believe it likely states will tax more services and more digital products. We believe we will see the states who have not yet introduced economic nexus or marketplace collection statutes to do so. Perhaps we may even see revisions to some of the existing statutes. We also believe states will begin to reduce or eliminate exemptions and many states will increase their discovery, auditing, and collection efforts.

Read More
Ellie Moffateconomic crisis, Wayfair, nexus footprint, recession
NOMAD - No More Alaska Introduces Economic Nexus for Sales Tax
NOMAD - No More Alaska Introduces Economic Nexus for Sales Tax

By: Michael J. Fleming, CMI

Many of us in the state and local tax world are taught very early in our careers an acronym to help remember the five states that do not have a state-level general sales tax. The acronym is NOMAD and the states are New Hampshire, Oregon, Montana, Alaska, and Delaware. It is important to use the precise term “state-level general sales tax” because each of these states does have sales and use tax and/or similar taxes imposed on either specific business types or in local jurisdictions. For example, while Alaska has no sales and use tax at the state level, local jurisdictions are allowed to impose sales and use tax. There are currently 106 municipalities and boroughs that impose a tax.

Read More
Michael FlemingNOMAD, alaska, state level, local jurisdictions, physical presence, economic nexus
Texas Nexus for Franchise Tax No Longer Requires Physical Presence
Texas Nexus for Franchise Tax No Longer Requires Physical Presence

By: Michael J. Fleming, CMI

Up until the beginning of this year, only Texas and Pennsylvania required a physical presence for their “income” taxes. Most states have allowed some form of economic nexus for their income tax for years. This stems from the language the U.S. Supreme Court used when they issued their opinion in Quill Corp. v. North Dakota, 504 U.S. 298 (1992).

Read More
Michael Flemingfranchise tax, physical presence, texas, economic nexus, gross receipts tax, exposure
Alaska - The New Sales Tax Frontier
Alaska - The New Sales Tax Frontier

By: Krista Sleeper

“To the lover of wilderness, Alaska is one of most wonderful countries in the world” - John Muir

To those of us in the lower 48 states, Alaska is a state shrouded in a lot of mystery. Their sales tax situation is no different. Alaska is one of those states we can all rattle off as being one of the NOMAD states which have no state-level sales tax.

Read More
Michael Flemingalaska, local jurisdictions, Wayfair, interstate, AML, alaska municipal league
Happy Holidays - Thank You For A Great Year!
Happy Holidays - Thank You For A Great Year!

By: Michael J. Fleming, CMI

As the year winds down and we enjoy the holiday season I like to reflect and give thanks. One of the constants we see every year is change, and this year is no different. The landscape continues to change as states move forward implementing economic nexus and companies evaluate how best to comply. There have been some big winners like eCommerce sellers who only sell on marketplaces. In many instances, these sellers no longer have to worry about sales tax going forward and we are helping many of our clients deregister. The future looks very bright for these sellers.

Read More
Michael Flemingthank you
Coupons Can Create Sales Tax Confusion
Coupons Can Create Sales Tax Confusion

By: Ellie Moffat

Coupons can create sales tax confusion. In general, sales tax is based upon the total amount of value received by a seller. A manufacturer’s coupon generally provides for reimbursement and is therefore generally included in the amount taxed. Store coupons and discounts generally do not provide reimbursement for a store. They just reduce the amount of money a store receives so they are generally not included in the amount taxed.

Read More
Ellie Moffatcoupons
Illinois Is Rolling Out Amnesty
Illinois Is Rolling Out Amnesty

By: Ellie Moffat

Illinois is rolling out an amnesty program with their Illinois Tax Delinquency Amnesty Act. If you have existing tax liability after June 30, 2011, and prior to July 1, 2018, this program could be a great option for you! You can only make payments between October 1, 2019, and November 15, 2019, and time is moving quickly. How do you know if this amnesty program is a good option for you?

Read More
Ellie Moffatamnesty, amnesty program
The Top Five Reasons Why Sales Tax Should be a Priority Right Now!
The Top Five Reasons Why Sales Tax Should be a Priority Right Now!

By: Michael J. Fleming, CMI

The world changed on June 21, 2018. This is the day the US Supreme Court said they made a mistake back in 1967. They said that they never should have introduced physical presence as a requirement for states to require sales tax collection from out of state companies. They said this in the Wayfair case and then went on to overturn the two landmark cases regarding physical presence: Quill and National Bellas Hess. (South Dakota v. Wayfair, Inc., 585 U.S. ___ (2018); National Bellas Hess v. Department of Revenue, 386 U.S. 753 (1967; Quill Corp. v. North Dakota (91-0194), 504 U.S. 298 (1992))

Read More
Michael Flemingeconomic nexus, sales tax exposure, taxability, personal responsibility
Foreign Formed Entities Don’t Need ITIN to Get EIN/FEIN
Foreign Formed Entities Don’t Need ITIN to Get EIN/FEIN

By: Michael J. Fleming, CMI

We have been receiving quite a number of calls recently from owners of foreign formed entities or their advisors. These owners and their advisors are being told they have to get an individual tax identification number or ITIN in order to apply for an employer identification number (EIN) or as it is sometimes called a federal employer identification number (FEIN). We have even seen a few articles suggesting the same. This information is incorrect.

Read More
Michael FlemingITIN, EIN, FEIN
A Growing Trend? No Transaction Thresholds for Sales Tax?
A Growing Trend? No Transaction Thresholds for Sales Tax?

By: Michael J. Fleming, CMI

When the Wayfair case was decided by the U.S. Supreme Court, the physical presence requirement for sales tax nexus was eliminated, paving the way for an economic nexus for sales tax. South Dakota, the state involved in the Wayfair case, believed that a substantial nexus could be created simply by having sales into South Dakota that exceeded $100,000 or 200 transactions. Many states saw the Supreme Court’s decision as an approval of the thresholds and rushed to implement and enforce their own thresholds identical to South Dakota. Minnesota even went live with a 100 transaction threshold. However, are states beginning to rethink transaction thresholds?

Read More
Michael Flemingtransaction threshold, wayfair, physical presence, economic nexus threshold, economic nexus
Has California Treasurer Fiona Ma Gone Far Enough in Her Latest Letter to Governor Newsom
Has California Treasurer Fiona Ma Gone Far Enough in Her Latest Letter to Governor Newsom

By: Michael J. Fleming, CMI

While we agree with the current position taken by California Treasurer Fiona Ma in her letter to California Governor Gavin Newsom dated March 8, 2019, concerning relief to third-party Amazon sellers, we do not believe that she has gone far enough or accurately described how long California has been pursuing FBA sellers.

Read More
Michael FlemingCDFTA, FBA, online marketplace