The Alabama Tax Tribunal held the taxpayers’ wholesale sales of fuel that entered and exited the state via the Colonial Pipeline were subject to the state’s wholesale oil license fee. The sales in question were made to Alabama license holders and involved fuel imported from out-of-state. The fuel would either enter Alabama from out-of-state through the Colonial Pipeline or be injected in the pipeline at a point in Alabama. In either instance, the fuel was bound for final movement out of Alabama with there being no subsequent point in Alabama where the fuel could exit the pipeline.
Articles Posted in Sales and Use Tax
New York & Tri-State Taxation Conference
Pillsbury SALT partner Marc Simonetti will present during the New York & Tri-State Taxation Conference on December 9, put on by the New York State Society of Certified Public Accountants. Continue Reading ›
California Governor Vetoes Sales Tax Bill Seeking to Require Large Online Retailers to File Informational Reports Detailing Sales by Destination
This week, Governor Newsom vetoed Senate Bill 792 (Glazer), which would have required large online retailers to include with their sales tax returns an additional schedule that reports gross receipts based on the “ship to” or destination location. The bill targeted online retailers with over $50 million in annual sales of tangible personal property. Qualifying online retailers that failed to report this information would have been subject to a penalty of $5,000.
California imposes a statewide sales tax on retailers for the privilege of selling tangible personal property at retail within the state, measured by the gross receipts from each sale. An additional sales tax of 1.25% (the Bradley-Burns Tax) is imposed on sales subject to the statewide sales tax, of which 1% is allocated to localities to use at their discretion and the remainder is distributed to county local transportation funds to support transportation programs. Continue Reading ›
West Virginia: Streaming Services Subject to Sales and Use Tax
The West Virginia State Tax Department released new guidance, TSD-445, that clarified that streaming services are subject to sales and use tax in the state. The Department’s guidance distinguishes streaming services from digital products, which are specifically exempted under the law. The Department explains that streaming services are subject to a 6% state sales and use tax, in addition to up to 1% in municipal sales and use tax if applicable, because West Virginia taxes all services unless a specific exception or exemption applies.
Only Simple Majority Required (Again!): California Court of Appeal Holds SF’s Proposition G Citizen Initiative Did Not Require Supermajority Voter Approval; Reconsideration Request Pending
California’s Court of Appeal again held that a special tax measure placed on the local ballot as a citizen initiative required only a simple majority, not a supermajority, vote to pass.
Proposition G is a school parcel tax initiative that passed on San Francisco’s June 2018 ballot with 60.76% of the vote. The Proposition G school parcel tax is a special tax—in other words, the expenditure of its revenues is dedicated to a specific project or projects—and not a general tax, which revenues roll into the locality’s general fund. Here, the Proposition G school parcel tax funds are earmarked for educators’ salaries, staffing, professional development, technology, charter schools, and oversight of funding.
California Court of Appeal Says Tax for “Public Safety Services” and “Other Essential Services” Not a Special Tax
California’s Court of Appeal held a local sales tax ordinance (Measure K) was a general tax, not a special tax, and therefore its adoption did not require a two-thirds vote (supermajority) under California’s Constitution. A tax is “special” and therefore would require a two-thirds vote, when the expenditure of its revenues is dedicated to a specific project or projects. The plaintiffs argued that Measure K was a special tax because the funds were earmarked for the funding of the county’s public safety services and essential services. The Court of Appeal disagreed, concluding tax proceeds that are deposited in a separate account for unspecified “other essential services” could be used for any and all government services that qualify as an “essential service” and are therefore not dedicated to a specific project or purpose, indicative of a general tax. Thus, the court held Measure K was valid.
Massachusetts High Court Approves of Apportionment of Sales Tax on Software Through General Abatement Process
The Massachusetts Supreme Judicial Court recently held that software vendors have a statutory right to apportion tax on the sale of prewritten computer software purchased for use in multiple states and that they may do so through the Commonwealth’s general tax abatement process. The court’s decision in Oracle USA, Inc. v. Commissioner of Revenue, 487 Mass. 518 (2021) confirms that the ability to apportion tax on software is not contingent on strict compliance with the administrative procedures set forth in the Massachusetts Commissioner of Revenue’s apportionment regulation. The tax abatement process is an acceptable mechanism for taxpayers to seek tax apportionment with respect to software purchased for use in multiple jurisdictions. Continue Reading ›
Maryland Court of Appeals Rejects First Amendment Challenge to Local Tax on Outdoor Advertising Services
On February 15, 2021, the Maryland Court of Appeals issued a decision in Clear Channel Outdoor, Inc. v. Director, Department of Finance of Baltimore City, Case No. 24-C-18-001778 (Md. 2021), upholding the constitutionality of a local ordinance that imposes an annual excise tax on businesses selling advertising space on off-site billboards. The tax in question applies only to businesses that own or control off-site billboards in the City of Baltimore i.e., billboards that are not located on the premises where the goods or services being advertised are offered for sale. Continue Reading ›
Maryland Becomes First U.S. State to Enact Controversial Digital Advertising Tax to Immediate Challenge
On February 12, 2021, Maryland legislators voted to override Gov. Larry Hogan’s (R) veto of H.B. 732, making Maryland the first state in the nation to impose a digital advertising tax. While Maryland’s enactment of the bill is a first, other states have impending digital advertising tax bills, such as New York, Connecticut, Indiana, Nebraska, Washington, Montana and Massachusetts. Maryland’s digital advertising tax, which becomes effective March 14, 2021 (30 days after the Governor’s veto), has been preemptively challenged in U.S. District Court. Continue Reading ›
COST’s 2021 Sales and Transaction Tax Webinar
Pillsbury SALT partner Craig Becker will present during COST’s 2021 Sales and Transaction Tax Webinar on February 25. Craig is partnering with Harley Duncan (KPMG), Jordan Goodman (HMB) and Mark Yopp (Baker & McKenzie) to present on the topic, “Wrangling in Local Transaction Taxes.”