Internet Does Not Equal No Tax

An online subscription services provider requested the South Carolina Department of Revenue to rule on the taxability of internet-based platforms on which their customers stream videos, listen to music, and play online games. The taxpayer offers subscription services at a standard monthly fee depending on usage amounts and type of package. South Carolina rules that because the subscriptions or services were online activities they are still subject to tax under the communication business class.

Sales tax rules for online transactions and internet-based companies can be confusing. Contact our state and local tax team to make sure you remain in compliance.

“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.

 

July 1st Sales & Use Tax Law Changes

Law Changes Overview
July 1st marks the effective date for recently enacted legislation in many states; this means that July 1st is an important date for law changes, including sales and use tax-relevant changes. As a courtesy to their subscribers, TTR has compiled the list below of upcoming sales and use tax law changes that are relevant to items covered on the TTR website. This list is not intended to encompass each and every sales and use tax law change (some changes are technical corrections, while other changes do not impact items in any TTR library). As July 1st approaches, they will update, as needed, the taxability of any impacted TTR items on their website (as these items are updated, you will receive regular notifications in your TTR daily or weekly digest). If you have any questions, please feel free to contact your TTR sales professional.

Arkansas
Arkansas Act 1401: Arkansas will exempt certain separately metered utilities used for commercial grain and storage operations.

Arkansas Act 1402: Arkansas will exempt eligible purchases of timber harvesting equipment.

Arkansas Act 1404: Arkansas will allow a partial refund for sales or use tax paid on the purchase of machinery and equipment used to modify, replace, or repair existing manufacturing equipment.

Arkansas Act 1411: Arkansas will reduce the tax rate for sales of natural gas and electricity purchased by qualifying manufacturers and cotton gin operations.

Arkansas Act 1414: Arkansas will exempt the sale of dental appliances to qualifying dental professionals

California
California Act 93 and SB 90: Effective until July 1, 2022, California will provide a partial exemption for purchases of qualifying tangible personal property for use primarily in manufacturing, processing, refining, fabricating, and recycling tangible personal property.

Georgia
Georgia HB 900:
Georgia will exempt sales of consumable supplies that are used in manufacturing but do not become a component of the property being manufactured.

Georgia HB 816: Georgia will exclude direct mail postage and delivery charges from its definition of “sales price” so long as the charges are passed on to the purchaser and are separately stated.

Idaho
Idaho HB 595: Idaho will no longer tax sales of software delivered electronically or by a load and leave method.

Kansas
Kansas HB 2378: Kansas will expand its manufacturing exemption to include certain types of machinery and equipment used in surface mining activities.

Mississippi
Mississippi SB 2921: Mississippi will have a sales tax holiday for sales of firearms, ammunition, and hunting supplies. The holiday will occur for one weekend each September.

Mississippi HB 0260: Mississippi will remove separately stated finance and carrying charges from the definition of “sales price.” It will also remove charges for engineering services from the taxable contract price for the construction tax.

Mississippi SB 2934: Retail sales of truck-tractors and semitrailers are exempt when they are purchased for use in interstate commerce and will be registered under the International Registration Plan or a similar agreement.

New Mexico
New Mexico SB 88: New Mexico will provide a gross receipts and governmental gross receipts exemption for certain sales and rentals of durable medical equipment and medical supplies.

South Carolina
South Carolina HB 3561: South Carolina will narrow the scope of services that are subject to the 5% tax on “additional guest charges.”

South Dakota
South Dakota HB 1056: South Dakota will change the method used to calculate sales tax on used motor vehicles.

Wisconsin
Wisconsin SB 348: Wisconsin will exempt maintenance and repair services performed on aircrafts and aircraft parts.

Wisconsin AB 5: Wisconsin has enacted an exemption for radio and television broadcasters.