Articles Posted in Gross Receipts Tax

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TEI-Silicon-ValleyPillsbury SALT was proud to present TEI/IPT Silicon Valley’s State and Local Tax Day & IPT Joint Meeting on December 5! The team presented a 3/4-day seminar that focused on topics related to the State and Local Tax implications of the Tax Cuts and Jobs Act, the U.S. Supreme Court’s decision in Wayfair, and other hot topics in state and local taxation.

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New York State increased the sales tax economic factor presence nexus threshold from $300,000 to $500,000. The change is retroactive to June 1, 2019. Accordingly, marketplace providers with no physical presence in the state are required to register and collect New York sales tax if the provider’s gross receipts from sales of tangible personal property in New York is equal to or exceeds $500,000 and facilitated more than 100 sales of tangible personal property delivered in the state. The sales are computed over the past four sales tax quarters. It’s not clear what prompted the state to increase the gross receipts threshold of the economic nexus standard—there are no other changes to the definition of marketplace provider, marketplace sellers or to any of the liability relief provisions. (For more information, access the recently issued marketplace provider guidance here, and the prior guidance here.)

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(This article originally was published by Law360 on August 21, 2019.)

The repercussions of the California Supreme Court’s August 2017 opinion in California Cannabis Coalition, et al. v. City of Upland, et al.1 continue to reverberate, leading San Francisco’s business taxpayers to wonder what practical precautions to consider.

In a February article, we analyzed the Upland opinion, the over 40-year history of California’s two-thirds supermajority voting requirement for passing local special taxes, and an introduction to the first five post-Upland litigation challenges, including San Francisco actions involving the validity of two separate Proposition C voter initiatives that passed in 2018 with a majority but not a supermajority vote. In a follow-up article last month, we provided an update on the status of these five supermajority tax challenges pending around the state, including trial court decisions made in the two San Francisco Proposition C actions.

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(This article originally was published by Law360 on July 22, 2019.)

On July 5, the San Francisco Superior Court issued a pair of rulings in favor of the city and county of San Francisco, finding that two local special taxes introduced by voter initiatives were valid even though they passed with a simple majority vote and not a two-thirds supermajority vote.

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gross-receipt-taxes-portlandAs of January 1, 2019, large retailers doing business in Portland, Ore., are subject to a new 1% gross receipts tax dubbed the “Clean Energy Surcharge.” This new tax is imposed on all businesses subject to the Portland business license tax that have annual retail receipts of over $1 billion and at least $500,000 annual retail receipts attributable to Portland. This tax has complications that qualifying large retailers should keep in mind. For instance, the tax is unconventionally broad and applies to, among other things, services (generally, without enumeration), interest income from lending, and sales of houses by builders. The tax uses current-year receipts, as opposed to prior-year receipts, to determine whether the thresholds are met, so businesses that may not be sure in advance if they will meet the thresholds should take caution accordingly. Finally, as is often the case with localities, Portland intends to apply its business license tax apportionment rule (income-producing activity approach), which differs from that of the State (market-based sourcing).

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The majority of states impose a form of a corporate income tax. However, currently five states—Delaware, Ohio, Nevada, Texas and Washington—impose a broad-based, statewide corporate gross receipts tax. The most recent addition to that list is Nevada, which in its 2015 Legislative Session enacted a new Commerce Tax that is imposed on gross revenue. More recently, there have been and are, at the time of writing, ongoing efforts in Oregon to enact a corporate gross receipts tax, either as a separate tax or as an alternative tax to the existing Oregon corporate income/excise tax. Even more recently, both West Virginia and Louisiana have considered a gross receipts tax.

(The remainder of this article can be access in the July 2017 edition of the Journal of Multistate Taxation and Incentives.)