STATE AND LOCAL
California bill significantly expands sales and use tax nexus
On June 29, 2011, California Governor Jerry Brown signed Assembly Bill 28X that effectively changes its definition of “retailer engaged in business” in California. California is among certain states that are imposing sales and use tax collection obligations on more companies making sales into California, that were not previously doing so, such as Amazon. Businesses that meet certain criteria and are not registered with the Board of Equalization will need to submit an application for a California Certificate of Registration – Use Tax.
Matt Bursell, Director, Seattle, WA
Potential impact of Florida property tax reassessment
August marks the short window of notification for Florida property owners to make their tax reassessment appeals. Simply accepting the assessors’ valuations based upon standard assumptions could cost you thousands of dollars. Florida statutes allow condominium, cooperative and homeowners’ associations to file a single joint-petition reducing costs to individual owners.
Bob Weigel, Director, St. Louis, MO
Limitation on certain NOL carryfowards under Massachusetts combined reporting regime
Massachusetts introduced mandatory combined reporting for corporations engaged in a unitary business, effective for tax years beginning on or after Jan. 1, 2009. There are a number of fairly complex provisions under the Massachusetts combined reporting regime, and one of these areas involves the determination of net operating loss (NOL) carryforwards that were generated prior to Jan. 1, 2009. The provisions for determining pre-2009 NOL carryforwards involve a number of limitations, the practical effects of which can result in certain taxpayers never being able to utilize their pre-2009 NOL carryforwards. Our extended article addresses the limitations on the use of NOL carryforwards in the combined group context, and some of the potential long-term consequences which can result from these limitations.
Jerry Brisbois, Managing Director, Boston, MA
Lu Awdeh, Director, Boston, MA
Rich Gowen, Sr. Associate, Boston, MA
Texas bill clarifies sales and use tax nexus on internet hosting
Texas Governor Perry signed legislation (H.B. 1841) clarifying the state’s nexus position on the sales and use of certain software and services. The legislation states that a person whose only activity in the state is as a user of internet hosting will not be considered “engaged in business” in Texas for purposes of the sales, excise and use taxes. The legislation defines “internet hosting” as “providing to an unrelated user access over the internet to computer services using property that is owned or leased and managed by the provider, and on which the user may store or process the user's own data or use software that is owned, licensed, or leased by the user or provider.” The bill does, however, exclude telecommunications services from the term “internet hosting.” Please note that absent any additional guidance, this provision applies only to internet hosting and services described in the bill. This bill was enacted and took effect on June 17, 2011.
Matt Bursell, Director, Seattle, WA
Vermont enacts click through nexus and remote seller notification requirements
“Click-through nexus” and “remote seller notification requirements” provisions were among additions in Vermont’s recently signed legislation, H.436. The click-through nexus provision will go into effect only when 15 or more states have adopted a similar rule. In addition, noncollecting out-of-state sellers now have to provide the purchaser notice that Vermont use tax is due for non-exempt purchases. The remote seller notification went into effect on July 1; however, it will be repealed if the click-through nexus provision takes effect.
Jerry Brisbois, Managing Director, Boston, MA
Leanne Oneschuk, Manager, Boston, MA
