New York Revamps Tax Code

The first state to significantly revamp its tax code in response to federal tax reform is New York. To learn more about NY budget bill S. 7509 that was signed by Governor Cuomo on April 12, join the SALT team on April 27 for the New York state presentation. Other states like California may follow New York’s lead to counteract the federal cap on state and local tax deductions. NY established a new payroll tax and charitable funds as workarounds to federal tax reform.

Many other states are working on their tax code as well; contact our state and local tax team to learn more.

But that’s not my car!

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.

Contact our state and local tax team for more information on this and other similar SALT issues.

“Get it in Writing” Says Arkansas

A recent Arkansas Administrative Decision: A taxpayer relied on inaccurate verbal advice from the Arkansas Department of Finance and Admin. This taxpayer had called the Department in reference to the taxability of cleaning and labor services. Taxpayer was told this type of activity is not taxable. The taxpayer was audited and the verbal opinion became the basis of the taxpayer’s appeal. Arkansas stated that the taxpayer failed to obtain a letter of opinion regarding the taxability of said services. Therefore, the auditor’s initial determination stands.

Contact one of our state and local tax professionals for more information on taxability in Arkansas and beyond.

 

Minnesota Hospital Denied Exemption

The Lake View Memorial Hospital and Clinic in Minnesota was denied a property tax exemption in February 2018. The Minnesota Tax Court stated that the Memorial Hospital failed the auxiliary-property test. Minnesota’s statute says that in order to qualify for the exemption a taxpayer must provide evidence of its not-for-profit status. The hospital did not provide the physician compensation, article of incorporation, and documentation related to the interdependence of the hospital and clinic.

For more information on this and other property tax issues, contact your state and local tax professional.

The Pennsylvania Test

Pennsylvania is getting creative when it comes to determining a taxpayer’s domicile.

A Florida resident completed a questionnaire to the best of her knowledge. However, unbeknownst to the Florida resident, the document would implicate her as a Pennsylvania resident. Although the Florida resident had owned a rental property in Pennsylvania during the years in question, there were no other ties to the state. The taxpayer’s defense was that she had visited Pennsylvania part of that time she was caring for an ill family member. The Pennsylvania Department of Revenue up-held that the Florida taxpayer failed the residency “Days Test” and must therefore file and pay taxes for years 2004 through 2012.

Domicile laws can be tricky! Contact a member of our state and local tax team with any questions.