In a recent Arkansas Admin ruling, a taxpayers was held responsible for sales tax on a vehicle that they no longer own. The seller repossessed the taxpayer’s car and it was later found that the car was never registered in Arkansas. The taxpayer insisted that the car was not in their possession for more than 30 days. Unfortunately the State of Arkansas stated that based on the governing statutes the fact that possession of the vehicle was taken creates a tax liability.
In late March 2018, Idaho Governor, Butch Otter officially signed into law a house bill that will require all out of state or remote retailers to collect and remit sales and use tax. This is only applicable to out of state retails that generate over $10,000 dollars through their Idaho affiliates. Idaho is one of the few states that has enacted legislation related to the establishment of nexus through a parent entity or affiliates.
Do you or any of your affiliates do business in Idaho? If yes, you might have a filing requirement. Contact our state and local tax team for more information.
Amazon recently notified sellers that it would begin collecting and remitting sales tax on behalf of third party sellers starting April 1. This is the result of the newly enacted “Marketplace Facilitator Law” which Washington has also enacted. Amazon is also collecting tax on all sales in Washington. Normally, Amazon does not collect sales tax on third party sales that are not “fulfilled by Amazon.” Guidance on whether market place sellers have other compliance or filing requirements is still evolving.
For more information on how this new law may impact your business, contact your state and local tax professional.
Eide Bailly is teaming up with the North Dakota Implement Dealers Association and the Northland Independent Automobile Dealers Association to bring you a series of webinars discussing important topics that impact the dealership industry.
There are a lot of things that need to be considered when transitioning a dealership, such as management, ownership, and entity structure. The first session in our Dealership Insights series will outline the top considerations for succession planning as well as review the inherent risks of unclaimed property. Click here to learn more and to register.
California has contacted more than 2,500 out-of-state retailers to notify them that they may owe sales tax due to the presence of products in California warehouses. A remote seller owning products in a California warehouse creates a physical presence in California and therefore sales tax nexus. The most common example is holding inventory in an Amazon warehouse. If contacted by the State of California the remote seller will be required to remit sales tax on all sales into California from the time this nexus was created. Any seller who believe they are in this situation should contact Eide Bailly’s State and Local Tax Team to discuss options to minimize the tax, penalties and interest. Once the state contacts the retailer the options to mitigate the exposure are limited.
A taxpayer that performed solid waste removal was recently assessed for sales tax not collected on that taxable service. The assessment was upheld by an Arkansas Administrative Judge who opined that lack of constructive knowledge of the tax levy or that other similar entities were not collecting the tax was not an adequate defense. Additionally, the Department of Finance and Administration was not estopped from enforcing the tax law because there was no evidence that its employee’s had made statements that the service was not subject to sales tax.
Sales tax can be tricky to navigate, but we’re here to help. Contact an Eide Bailly SALT professional today.
The Colorado Department of Revenue is revising its sales tax rules for documenting wholesale transactions. The revised rules seeks to change the amount of due diligence required for accepting resale certificates in lieu of collecting sales tax. Under the old rule, the wholesale vendor was relieved of the liability to collect sales tax when the vendor accepted in “good faith” a resale exemption certificate. Under the proposed rule the vendor is required to either verify the sales tax license number of the purchaser with the Department or collect a physical copy of the license.
The Department has until June to adopt the new rule or terminate the proceeding. This gives Colorado vendors time to review the documentation they have on file for their retail customers and if needed start collecting the proper documentation.