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.

Assessment Upheld Against Contractor Who Wrongfully Collected Sales Tax

An Arkansas Administrative Law Court recently upheld an assessment for sales tax that was collected and not remitted. The taxpayer collected the tax for a service that he later learned was exempt from tax. After accounting errors resulted in the under-billing of his customer, the taxpayer used the tax proceeds to offset his accounting error. In addition to the assessment, the penalty for failure-to-file was upheld.

If you run into sales tax confusion in any state, or if you are facing penalties, contact your Eide Bailly state and local tax professional. We’re here to help!

Arkansas Denies Credit for Taxes Paid to Another State

The Arkansas Department of Finance and Administration recently assessed additional income tax on an individual as a result of a denied credit of taxes paid to another state. The taxpayer paid property taxes to another state and claimed them on Form AR1000TC which is used to report income tax paid to another state. The purpose of the form is to avoid double taxing the same income. An administrative court determined that property tax is not an income based tax, so the credit was properly disallowed.

For more information on income tax credits, contact your state and local tax professional.

Sales Tax Compliance: Remote/Online Seller Resource

The emergence of ecommerce has compelled states to invent new ways to find their lost sales tax revenue. One novel solution states are implementing is identifying individual purchasers of goods who have not paid sales or use tax. This strategy forces remote sellers, who are not registered to collect sales tax, to turn over customer lists or face stiff penalties. Learn more in our recent article.

New Tax Laws Enacted in CT & MS

As more businesses enter the online marketplace to sell goods across borders, states are creating laws to capture sales tax for online transactions. Recently, both Connecticut and Mississippi have enacted new tax laws targeting out-of-state e-commerce sellers. Check out the following articles to learn more:

Connecticut to Tax Web Cookies
Mississippi to Tax Out-of-State Sellers

California Tax Update

Do you do business in the state of California, or are you considering expanding into the state? Join our State and Local Tax team for a webinar on December 7 and learn the ins and outs of California tax filing. This session will discuss registration and forms, various taxes, starting and closing a business, and more! Learn more and register here.

OH School District Income Tax: Failure to File Notices

The Ohio Department of Taxation began sending Failure to File notices by regular mail on June 5, 2017 to taxpayers who:

  • Have not filed an Ohio School District Income Tax Return Form SD 100 for 2013, 2014 and/or 2015; and
  • Appear to have lived in a taxing school district based on the school district number and/or mailing address reported on the taxpayer’s Ohio Individual Income Tax Return (Ohio Form IT-1040) filed for 2013, 2014, and/or 2015.

To learn more about the Ohio School District Income Tax, read their Guide.

If you receive(d) a notice and need assistance, please contact a member of our State and Local Tax Team.