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.

 

Sales taxes changed in four states for December 2015

Sales taxes changed in Zip2Tax products for four states since November

In Alabama, tax rates changed for Randolph County.

In Colorado, tax rates changed for Winter Park.

In Louisiana, tax rates changed for Lafayette Parish.

In New York, tax rates changed for Chautauqua County and Jefferson County.

There were 10 states with ZIP code changes effective after November 2015 including the District of Columbia, Florida, Georgia, Indiana, Massachusetts, Minnesota, Mississippi, New Jersey, Ohio and Texas. A PDF document enumerating ZIP code additions and deletions can be made available upon request.

For November’s changes click here.

Angel Downs, Zip2Tax's ead tax researcher

Angel Downs, Zip2Tax’s lead tax researcher

NY v Sprint lawsuit for false sales tax returns progresses

sales tax returns

sales tax returns

sales tax returns

A whistle blower initially sued Sprint Nextel on the state’s behalf in what is known as a “qui tam” action. These lawsuits claim the defendant has defrauded the government and if a monetary judgement ensues, a portion is usually awarded to the whistle blower.

The New York Attorney General’s office recently won a major procedural victory in a four-year-old lawsuit accusing Sprint Nextel of filing false sales tax returns. New York’s highest court ruled state law “unambiguously” requires collection of sales tax on the full price flat-rate wireless telephone plans, even when charges for interstate calls are “unbundled” and stated as a separate item. The court’s decision may ultimately cost Sprint Nextel several hundred million dollars.

This is an unusual sales tax lawsuit. Normally a state’s revenue department assesses a delinquent taxpayer who must then seek a refund through the courts. But in this case New York’s attorney general, rather than the state’s tax department, sued Sprint Nextel. And in fact, a third party company initially sued Sprint Nextel on the state’s behalf before the attorney general later intervened. This is known as a “qui tam” action. These are basically lawsuits brought by whistleblowers who claim the defendant has defrauded the government in some way. If the government takes over the lawsuit and wins, the whistleblower usually receives a share of any monetary judgment.

Here, the attorney general alleges Sprint Nextel filed false sales tax returns. Specifically, Sprint Nextel did not collect (or report) sales tax for its flat-rate wireless plans “on the portion that it attributed to interstate and international calls.” The attorney general said this attribution was “arbitrary” and Sprint Nextel should have collected sales tax – which is 4% on mobile telecommunications services – on the full price of its plans. This is consistent with the New York Tax Department’s rules and the practice followed by Sprint Nextel’s competitors. Sprint Nextel argued the sales tax law was ambiguous on this issue and it relied on its own “reasonable interpretation” of the statute, so it should not be penalized.

A trial court denied Sprint Nextel’s motion to dismiss the case. An intermediate appeals court upheld that decision but asked the New York Court of Appeals, the state’s highest court, to review the case. On October 20, the Court of Appeals, by a 4-1 vote, agreed with the two lower courts.

Chief Judge Jonathan Lippman, writing for the majority, said New York law imposes tax on “voice services” sold for a monthly charge. The law makes no distinction between in-state and interstate (or international) calls. The statute is not ambiguous, Lippman said, nor is it preempted by federal law governing state-level taxation of mobile services. To the contrary, federal law provides “the only state that may impose [such] a tax is the state of the customer’s ‘place of primary use’.”

Lippman also said the attorney general pleaded sufficient facts to charge Sprint Nextel under New York’s False Claims Act. That said, the attorney general “has a high burden to surmount in this case,” as he must prove Sprint Nextel “knew the AG’s interpretation of the statute was proper, and that Sprint did not actually rely on a reasonable interpretation of the statute in good faith.” These will be issues for the trial court to resolve.

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

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

State Abbrev. Validity Period
Alabama AL Till Changed Or Revoked
Alaska AK NA – No Certificates
Arizona AZ Date On Certificate
Arkansas AR NA – No Certificates
California CA Till Changed Or Revoked
Colorado CO No Expiration
Connecticut CT 3 Years
Delaware DE NA – No Certificates
District Of Columbia DC Till Changed Or Revoked
>Florida FL 5 Years
Georgia GA Till Changed Or Revoked
Hawaii HI Till Changed Or Revoked
Idaho ID No Expiration
Illinois IL 5 Years
Indiana IN No Expiration
Iowa IA 5 Years
Kansas KS Till Changed Or Revoked
Kentucky KY Till Changed Or Revoked
Louisiana LA 3 Years
Maine ME Till Changed Or Revoked
Maryland MD 5 Years
Massachusetts MA No Expiration
Michigan MI 4 Years
Minnesota MN 3 Years
Mississippi MS NA – No Certificates
Missouri MO 5 Years
Montana MT NA – No Certificates
Nebraska NE No Expiration
Nevada NV 5 Years
New Hampshire NH NA – No Certificates
New Jersey NJ 5 Years
New Mexico NM No Expiration
New York NY Till Changed Or Revoked
North Carolina NC No Expiration
North Dakota ND No Expiration
Ohio OH No Expiration
Oklahoma OK 3 Years
Oregon OR NA – No Certificates
Pennsylvania PA 3 Years
Rhode Island RI No Expiration
South Carolina SC Till Changed Or Revoked
South Dakota SD 1 Year
Tennessee TN Till Changed Or Revoked
Texas TX No Expiration
Utah UT 1 Year
Vermont VT No Expiration
Virginia VA Till Changed Or Revoked
Washington WA 1 Year
West Virginia WV 1 Year
Wisconsin WI 5 Years
Wyoming WY No Expiration
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