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

Indiana questions sales verses use tax on home improvement contracts

sales verses use tax

sales verses use tax

sales verses use taxBusinesses must often decide whether they are liable for sales or use tax on certain property. Sales tax applies to goods purchased for resale to the final consumer, while use tax is assessed when the business uses the property to provide another service. An Indiana court recently questioned sales verses use tax on home improvement contracts with respect to the well-known chain Lowes.

Lowes sells building supplies to retail customers. It also performs home improvement services as a general contractor. Lowes paid use taxes on the wholesale price of the building supplies used in its contractor jobs. The Indiana Department of State Revenue claimed Lowes should have paid sales tax on the higher retail price of those supplies.

The Indiana Department of State Revenue argued Lowes’ Home Improvement contracts only covered “time and installation” of materials; customers were therefore still liable for sales tax on the retail price of the materials themselves. Lowes replied its contracts charged a “lump sum” for all materials and labor, and under Indiana law, it was therefore only liable for use tax on the former.

A judge agreed with Lowes. In a Dec. 19 decision, Judge Martha Wentworth of the Indiana Tax Court said the department was attempting to manufacture “an artificial distinction between time and material contracts and lump sum contracts in its regulations to convert a contractor’s use tax liability … into a sales tax liability on the materials’ higher retail price.” Wentworth said Lowes’ construction contracts were clearly understood by it and its customers to be “lump sum” agreements. Customers paid a “singularly stated price” upon signing a contract. More to the point, customers were not separately billed for materials, and in fact, any “surplus” materials leftover following construction were returned to Lowes, not retained by the customer.

The department may appeal Wentworth’s decision to the Indiana Court of Appeals.

S.M. Oliva is a writer living in Charlottesville, Virginia. He edits the international legal blog Bonham’s Cases.

Amazon now collecting online sales taxes in three more states

online sales taxes

online sales taxes

Amazon collects online sales tax from 3 more statesMore states across the country have passed laws requiring Amazon to collect its online sales taxes. As of January 1st, 2014 shoppers in Indiana, Nevada, and Tennessee will now need to pay online sales taxes when they shop with the online retailer.

At this point, 19 states now have laws that require Amazon to collect sales taxes. North Carolina is set to join this group as well starting February 1st. South Carolina legislators have also passed a law that will require Amazon to start collecting sales taxes starting in 2016.

Amazon continues to battle against these laws. Company representatives stand by their reasoning that as an online retailer, Amazon shouldn’t be held to the same tax laws as a company with a physical presence in a state.

As of November 2012, the following states tax shipping:

states tax shipping

states tax shipping

The following states tax shipping:

Arkansas
Connecticut
Georgia
Hawaii
Indiana
Kansas
Kentucky
Michigan
Minnesota
Mississippi
North Carolina
North Dakota
Nebraska
New Jersey
New Mexico
New York
Ohio
Pennsylvania
Rhode Island
South Carolina
South Dakota
Tennessee
Texas
Vermont
Washington
West Virginia
Wisconsin