May 1st Deadline to Apply for Discontinued SD Tax Credits

On February 12, 2014, the South Dakota legislature enacted House Bill 1070, which, among other things, set a date of July 1, 2015 to repeal key tax credits for the building of agricultural processing facilities, as well as large new business facilities (S.D. Codified Laws Ann. § 10-45b).

These refunds apply to the contractors excise tax and are allowed for:
• Sales and use tax paid for purchases or use of agricultural processing equipment
• Project costs incurred and paid within 36 months of a permit application for an agricultural processing facility project
• Large new business facility project costs that exceed $10 Million

Provisions included in the repeal set a May 1, 2014 deadline to submit refund claims associated with permits for construction. If a business does not file by the May 1st deadline then they are barred from any future refund eligibility.

Connecticut is Requiring E-File for Seven Taxes Beginning 2014

The following Connecticut taxes will have to be filed electronically for periods on or after January 1, 2014:

  • Corporation business tax
  • Sales and use tax
  • Withholding taxes
  • Admissions and dues tax
  • Business use tax
  • Room occupancy tax
  • Composite income tax.

For more information you can read the following:

Checkpoint_News

State and Local Tax Deduction Targeted

This article from Reuters explains why the chairman of the Ways and Means Committee, Dave Camp, is targeting the state and local tax deduction in his attempts to re-write the federal tax code:

http://www.reuters.com/article/2013/09/20/us-usa-tax-state-idUSBRE98J0HT20130920

Colorado Poised for Passage of Marketplace Fairness Act

Colorado has approved a bill that sets parameters and guidelines if the Federal marketplace fairness act were to pass.

Read the bill here:

http://www.leg.state.co.us/clics/clics2013a/csl.nsf/fsbillcont3/5C6B90638BBED01887257AEE0057C8B0?Open&file=1295_01.pdf

Michigan Corporate Income Tax

On May 25, 2011, the Michigan Corporate Income Tax (CIT) was signed into law, imposing a 6% corporate income tax on C corporations and taxpayers taxed as corporations for federal income tax purposes.  The CIT allows only one credit, the small business alternative credit, offering an alternative tax rate of 1.8% of adjusted business income.

The CIT replaces the Michigan Business Tax (MBT) for most taxpayers and is effective January 1, 2012.  Taxpayers with less than $350,000 in allocated or apportioned gross receipts and/or less than or equal to $100 in annual liability are not required to file or pay the CIT.  The gross receipts threshold does not apply to financial institutions or insurance companies.

A CIT taxpayer’s tax year is the calendar year, or the fiscal year ending during the calendar year.  Fiscal year taxpayers must file a final MBT return for the year ending on December 31, 2011.  A taxpayer that is subject to the MBT and the CIT for fractional parts of the same fiscal year must use the same method to compute the MBT as used to compute the CIT for the other portion of the tax year.

Fiscal year taxpayers will be granted an automatic extension for their 2012 fiscal year annual CIT return.  Fiscal year returns ending in 2012 will be due the same date as 2012 calendar year returns, April 30, 2013.  An extension request form is not needed unless the taxpayer is required to transmit payment of any tax that would be due with the annual return.

Calendar year taxpayers must file a Michigan Application for Extension of Time to File by the due date of the CIT annual return, together with payment of estimated tax.  CIT annual returns for calendar year taxpayers is April 30th.

Annual returns will be finalized and posted to the Michigan website by the time the legislature adjourns for the year in December 2012.  It is anticipated that paper forms and instructions will be available for distribution in January 2013.

Individuals and flow-through entities, including partnerships, S corporations, and trusts are not subject to the CIT.

Flow-through entities may be subject to withholding.  A flow-through entity with business activity in Michigan that has more than $200,000 of business income after allocation or apportionment is required to withhold a tax on the distributive share of business income of each corporation or flow-through member of the flow-through entity in an amount computed pursuant to MCL 200.623.

Insurance companies are subject to tax equal to 1.25% of gross direct premiums written on property or risk located or residing in Michigan.

Financial institutions are subject to tax equal to 0.29% of their apportioned net capital.

Additional information may be obtained on the Michigan Department of Treasury website at:  http://www.michigan.gov/taxes/0,4676,7-238-59553—,00.html