Tax Changes for November 2016

Sales November 2016

Sales November 2016

Sales and/or use tax rates have changed in Zip2Tax products since the October updates.

In Alabama, tax rates changed for the cities of Coffeeville and York.  

  • The Coffeeville official notice can be found here.
  • The York official notice can be found here.

In Arizona, tax rates changed for the City of Globe.

  • The Mayor and Council of the City of Globe passed Ordinance No. 834. which amended the City Tax Code to increase the tax rate on retail sales from two percent (2%) to two and three-tenths percent (2.3%).  More details here AZ DOR.

zip-codes-picture

 

There were 16 states with ZIP code changes…

……in Arizona, California, Connecticut, DC, Florida, Georgia, Indiana, Minnesota, North Carolina, Nebraska, New Mexico, New York, Oregon, Puerto Rico, Texas, and Wisconsin.

 

Until next month, best regards!

For October’s changes click here.

B.D. French, Researcher

B.D. French, Tax Researcher

Sales tax change frequency by state

Zip2Tax compares the sales tax change frequency of the states. Ever wonder how your state measures up?

It’s generally accepted that there are around 11,000 sales tax jurisdictions across this great and diverse country of ours. This fact alone would seem to be a fairly reasonable argument for the outsourcing of sales and use tax rates from a company such as Zip2Tax. As the head of marketing for Zip2Tax I am always trying to understand our customer’s needs better. I found myself wondering about the sales tax change frequency for all these jurisdictions. I mean, 11,000 rows in a document might be manageable if they only changed their rates every few years or so, right?

So I sat down and with my trusty Excel spread sheet and a large cup of strong coffee and started going back through our research documentation counting the number of months that there had been any sales tax changes in each state. I wanted to determine which states had the highest sales tax change frequency. I sampled a three-year period from December 2015 going back through January 2013.

… fully one-third of the time that these states CAN make sales or use tax rate changes, they DO.

When the numbers were crunched I had some surprises in store, to be sure. For one, the states that provide Zip2Tax with the most new customers have no obvious correlation with which states had the highest sales tax change frequency. In fact, California and New York were only slightly above average.

The standout in this sample was Alabama which turned out to be far and away the leader with changes in 30 out of the 36 months – that’s 83% of the time. This also helped to dash my hopes of discovering a hotbed of customer need for our product since Alabama has so far not proven to be a great source of new business.
sales tax change frequency

Arizona came in second with 14 changes over that same period. Georgia, Louisiana, Oklahoma and Texas all tie for third place with 13 sales tax rate changes over 36 months. That translates to mean that fully one-third of the time that these states CAN make sales or use tax rate changes, they DO. Not to overstate the obvious, but that is more frequently than quarterly updates.

… more than two-thirds, updated that tax a minimum of once a year, and by the end of 3 years, 86% of the states had made changes…

In fact, 68% of the states that collect a sales tax, that’s more than two-thirds, updated that tax a minimum of once a year, and by the end of 3 years, 86% of the states had made changes.

So as I drained the last of my cold coffee I felt some gratification in that even though sales tax will remain an extremely complex moving target in nearly all 50 states, at least it should mean a steady supply of customers for sales tax rate providers like Zip2Tax for the foreseeable future.

Fill in the sign up form below this blog to receive our monthly newsletter and get alerted when one of these states makes a sales or use tax change or other important tax-related information.

 

Exemption certificates need to be reviewed for validity

Exemption certificates

Do you know the validity period of your exemption certificates? Did you know that each state treats them differently and that you should review them periodically to make sure they are still good?

It is a good business practice to periodically review exemption certificates because quite a few states claim their exemption certificates are good until the business has a change, the business closes, or the certificate is revoked. You won’t know if these conditions are met unless you check with your customers and vendors regularly and request updated exemption certificates from them.

Some states have no stated expiration for their exemption certificates but they recommend regular or periodic updates. In these cases we listed the least amount of time between recommended updates. In cases where the state listed “good until the exemption no longer applies” we stated that there was no expiration date. Other states note that exemption certificates are good forever however “exempt status must be renewed”, or they “recommend” updates. In these cases we noted the recommended update or renewal timeframe.

Exemption Certificate Validity

StateAbbrev.Validity Period
AlabamaALTill Changed Or Revoked
AlaskaAKNA – No Certificates
ArizonaAZDate On Certificate
ArkansasARNA – No Certificates
CaliforniaCATill Changed Or Revoked
ColoradoCONo Expiration
ConnecticutCT3 Years
DelawareDENA – No Certificates
District Of ColumbiaDCTill Changed Or Revoked
>FloridaFL5 Years
GeorgiaGATill Changed Or Revoked
HawaiiHITill Changed Or Revoked
IdahoIDNo Expiration
IllinoisIL5 Years
IndianaINNo Expiration
IowaIA5 Years
KansasKSTill Changed Or Revoked
KentuckyKYTill Changed Or Revoked
LouisianaLA3 Years
MaineMETill Changed Or Revoked
MarylandMD5 Years
MassachusettsMANo Expiration
MichiganMI4 Years
MinnesotaMN3 Years
MississippiMSNA – No Certificates
MissouriMO5 Years
MontanaMTNA – No Certificates
NebraskaNENo Expiration
NevadaNV5 Years
New HampshireNHNA – No Certificates
New JerseyNJ5 Years
New MexicoNMNo Expiration
New YorkNYTill Changed Or Revoked
North CarolinaNCNo Expiration
North DakotaNDNo Expiration
OhioOHNo Expiration
OklahomaOK3 Years
OregonORNA – No Certificates
PennsylvaniaPA3 Years
Rhode IslandRINo Expiration
South CarolinaSCTill Changed Or Revoked
South DakotaSD1 Year
TennesseeTNTill Changed Or Revoked
TexasTXNo Expiration
UtahUT1 Year
VermontVTNo Expiration
VirginiaVATill Changed Or Revoked
WashingtonWA1 Year
West VirginiaWV1 Year
WisconsinWI5 Years
WyomingWYNo Expiration

Back To School sales tax holiday list for 2015

Back To School sales tax holiday

Back To School Sales tax holidayThe most complete list of all 17 states holding a Back To School sales tax holiday for 2015, updated July 14, 2015.  This list is complete with items sales tax will be suspended on, the upper price limit, the sales date ranges, when the sales were first initiated, and a link to where you can get more information.

The 2015 Back To School sales tax holiday will be held in Alabama, Arkansas, Connecticut, Florida, Georgia, Iowa, Louisiana, Maryland, Mississippi, Missouri, New Mexico, Ohio, Oklahoma, South Carolina, Tennessee, Texas and Virginia.

Keep in mind that while some states suspend the state portion of the sales tax during these Back To School specials, but county, city, or other local sales taxes might still apply if those municipalities are not participating the sales tax holiday.

Also consider that not all items are viewed equally in the eyes of the tax adjuster. Shoes may be considered an item of clothing in one instance, but “track shoes” may be considered sporting goods and not included along with the tax-free items during this Back To School sales tax holiday.

StateItems IncludedMax Price1st Year2015 DatesInformation Links
Alabamaclothing$1002006August 7-9http://www.revenue.alabama.gov/
computers$750
school supplies$50
books$30
Arkansasclothing$1002011August 1-2http://www.dfa.arkansas.gov/
school supplies
Connecticutclothing and footwear$3002001August 16-22http://www.ct.gov/drs/
Floridaschool suppies2007+August 7-16http://dor.myflorida.com/
clothing$100
supplies$15
computers$750
Georgiaschool supplies2012+July 31 – August 1http://dor.georgia.gov/
clothing$100
supplies$20
computers$1,000
Iowaclothing$1002000August 7-8https://tax.iowa.gov/
Louisianaall taxable personal property$2,5002007August 7-8http://www.revenue.louisiana.gov/
Marylandclothing & footwear$1002010August 9-15http://www.marylandtaxes.com/
Mississippiclothing & footwear$1002009July 31-Aug. 1http://www.dor.ms.gov/
Missouriclothing$1002004August 7-9http://dor.mo.gov/
computers$3,500
school supplies$50
New Mexicoclothing$1002005August 7-9http://www.tax.newmexico.gov
computers$1,000
computer equip.$500
school supplies$30
Ohioclothing$752015August 7-9http://www.tax.ohio.gov/
school supplies$20
instructional material$20
>Oklahomaclothing$1002007August 7-9http://www.tax.ok.gov/
>South Carolinaclothing2000August 7-9http://www.sctax.org/
school supplies
computers
other
Tennesseeclothing$1002006August 7-9http://tn.gov/revenue/
school supplies$100
computers$1,500
Texaclothing, backpacks and school supplies$1001999August 7-9http://comptroller.texas.gov/
Virginiaclothing$1002006August 7-9http://www.tax.virginia.gov/
school supplies$20
energy star products$2,500
hurricane preparedness items$60
generators$1,000

Source: Federation of Tax Administrators

Connecticut

Sales tax audit leads to litigation between state and town

tax audit

tax audit

The Connecticut Supreme Court recently decided an unusual sales tax case. The allegedly delinquent taxpayer was actually a town that challenged the state’s decision to collect sales tax on fees charged for municipal waste removal services. Connecticut imposes a 6.35% sales tax on the “rendering of any services constituting a sale.” The town argued its “services” were not taxable in this context since it did not actually profit from providing waste removal services.

Groton v. Commissioner of Revenue Services

Groton is a town of about 40,000 people. In 1985, Groton joined a regional authority which operates a waste facility. Groton is contractually obligated to provide a certain amount of waste to the regional waste facility for a per-ton fee. Three years later, in 1988, Groton created a town authority which provides waste removal services to “end users,” including industrial, commercial and rental properties in the town.sales tax audit in Groton, CT

The town authority uses a private contractor to serve as an intermediary, picking up waste from end users and delivering it to the regional facility. The regional authority and the private contractor each charge the town authority, which pays the bills and then invoices the end users for the total cost. The town authority adds a small per-ton charge to cover its overhead and administrative costs, so the entire program is “break even” for Groton.

In 2011, Connecticut’s Commissioner of Revenue Services performed a sales tax audit on the town of Groton and declared it owed over $240,000 for unpaid sales taxes dating back to 2007. The commissioner said Groton failed to charge sales tax on the “services” it provided, namely its invoices for waste removal. Groton argued since end users merely reimbursed the town authority for its costs in administering the waste removal program, there was no “sale of services” as required by the sales tax law.

A trial court rejected the town’s argument and upheld the state’s sales tax assessment. On appeal, the Connecticut Supreme Court reversed and entered judgment for the town. Writing for a unanimous court, Justice Richard A. Robinson said while Connecticut law subjects private waste removal contracts to state sales tax, the same is not true for municipal agreements. Robinson said the “true object” of Groton’s town authority was promoting “safe and efficient waste disposal,” as opposed to making a profit by competing with private waste removal companies. In other words, Groton carried out a purely governmental function when it billed end users for waste removal.

S.M. Oliva is a writer living in Charlottesville, Virginia. He edits the international legal blog PrivyCouncil.info

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