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.

 

Wyoming Approves Tax Collection Fees

Senate Bill 50 was signed into law amending Wyo. Stat. §39-15-107 to allow collection agencies to charge delinquent taxpayers additional fees for their collection efforts. They may now charge the taxpayer up to 20 percent of the value of the tax. This fee will be charged on top of the tax, interest, and other penalties. Those debt collection fees were previously paid for with funds from the Department of Revenue prior to the passage of this new law.

Contact a member of our state and local tax team for more information on similar laws that may be in the works for other states.

Dealership Insights Series – Succession Planning

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.

Summary Judgment Granted to a Limited Partnership in New Jersey

A New Jersey Tax Court recently granted summary judgment to a nonresident limited partnership. One of the partners had originally consented to being taxed in New Jersey, and later amended the returns and requested a refund of taxes paid. This was based on an assertion of no nexus. The Division responded by denying the request and assessing additional tax for the partner that had not consented to be taxed in New Jersey. Contrary to the Division’s assertion, the court held that the refund claim does not constructively revoke the nonresident partner’s election to be exempt. The denial of the refund claim is still being litigated.

For more information on nexus and other similar matters, contact our State and Local Tax team.

 

Colorado Private Letter Ruling Apportions Gain on Sale of Business to Another State

Normally, the sale of a business interest commercially domiciled in Colorado is considered business income, and statutory apportionment rules apply. This would include the gain in the numerator of the apportionment ratio.  In a recent case, however, the business that was sold was a distinct operation with its own administration, manufacturing, and distribution departments outside the state. As such, the Dept. of Rev. determined that the gain on this sale should not be sourced to Colorado.

If you are looking to sell your business, contact an Eide Bailly SALT professional to make sure you remain in compliance throughout the transaction process.

Ignorance of the Law is Not a Defense Against a Sales Tax Assessment

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.