Too few nonprofits keep healthy operating reserves. A study of charities in the Washington, D.C. area, for example, found that 57 percent of the organizations had insufficient operating reserves to cover three months of expenses - the minimum level many experts consider necessary to maintain financial stability. Read more.

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Arizona Adjusts Qualifications for Charitable Contribution Credit: Effective for tax years beginning Dec. 31, 2011, contributions can only qualify for a tax credit if the organization to whom the contribution is made provides a written certification stating that it does not provide, pay for, or provide coverage of abortions and does not financially support any other entity that provides, pays for, or provides coverage for abortions. Language specifying that the organization will not promote or provide referrals for abortions is removed. See HB 2627 for details.

Maine Bill Eliminates Information Return Filing Requirement: Maine Governor Paul LePage recently signed a supplemental budget bill including a provision that eliminates certain information return filing requirements. For tax years beginning on or after January 1, 2012, the legislation repeals the information return filing requirement for partnerships and S corporations that have a resident partner or shareholder or income derived from sources in Maine. Related provisions are also repealed and certain other technical changes are made. See LD 1903 for details.

New Mexico Sales Tax Nexus Created for Online Bookseller: The New Mexico Court of Appeals has determined that the in-state use of the Barnes & Noble trademark was sufficient to meet the constitutional substantial nexus standard for Barnesandnoble.com LLC. Although the online bookseller (a separate legal entity) had no owned or leased property in NM, had no retail stores in NM, and no sales agents or employees in NM, the Court determined that nexus had been created through a relationship with the brick-and-mortar Barnes & Noble stores via utilization of common intangible property. (In the Matter of the Protest of Barnes and Noble Co, LLC v. New Mexico Taxation and Revenue Department, N.M. Ct. App., Dkt. No. 31,231, 04/18/2012.)

Kentucky to Offer Amnesty Program: Kentucky Governor Steve Beshear has signed legislation authorizing a tax amnesty program to be conducted during the fiscal year ending June 30, 2013. The tax amnesty program will apply to tax liabilities for taxable periods ending or transactions occurring after Dec. 1, 2001, and prior to Oct. 1, 2011. The program will be available to all taxpayers owing taxes, penalties, fees or interest subject to the administrative jurisdiction of the Department of Revenue, with the exception of property taxes or penalties related to cigarettes or fuel licenses. Stay tuned for more information.

Kentucky to Streamline Local Tax Information: Recently passed HB 277 seeks to streamline and facilitate the efficient collection of local net profits, gross receipts, and occupational license taxes by requiring all local tax districts that levy such taxes to submit their tax forms, instructions and ordinances in either electronic or hard copy to the Kentucky Secretary of State for inclusion on the one-stop business portal or similar website before Nov. 1, 2012, and to accept tax returns using a new standard form that is to be developed by the Secretary.

Michigan Issues Guidance on Flow-Through Withholding Rules: The Michigan Department of Treasury has issued a release on the new withholding rules effective Jan. 1, 2012. The release addresses rules for the three categories of flow-through withholding (nonresident individuals, corporate members and flow-through members), returns and due dates.

Nebraska to Move to Market Approach for Income Tax: Beginning Jan. 1, 2014, Nebraska has modified its sourcing method for sales other than sales of tangible personal property. Sales of services, intangibles, lender fees and communications are affected be the new law. See LB872 for details of the changes.

Colorado: Federal judge grants permanent injunction blocking Colorado notice and reporting requirements for out-of-state retailers: Effective March 30, 2012, Federal District Court Judge Robert E. Blackburn issued a permanent injunction requested by the Direct Marketing Association that blocks the Colorado Department of Revenue's imposition of notice and reporting requirements on out-of-state retailers because the provisions are unconstitutional under the U.S. Commerce Clause. Colo. Rev. Stat. § 39-21-112(3.5) and Colo. Code Regs. § 39-21-112.3.5 impose an improper and burdensome regulation of interstate commerce. See Direct Marketing Association v. Colorado Department of Revenue, Civil Case No. 10-cv-01546-REB-CBS, 03/30/2012.

Virginia Governor Signs "Amazon" Law: Virginia Governor Bob McDonnell signed "Amazon legislation" that creates a presumption of sales and use tax nexus for an out-of-state seller if a commonly controlled person maintains a distribution center, warehouse, fulfillment center, office or similar location within Virginia that facilitates the delivery of tangible personal property sold by the seller to its customers. The legislation will become effective on the earlier of Sept. 1, 2013, or the effective date of federal legislation authorizing the states to require a seller to collect taxes on sales of goods to in-state purchasers without regard to the location of the seller. See S597 for details.

Katz, Sapper & Miller’s State & Local Tax Practice has released its 2012 Legislative Update, which provides a summary of the various tax and economic development legislative changes that occurred during the 2012 session of the Indiana General Assembly.

The update covers changes in areas such as sales tax, income tax, property tax, economic development and tax credits, and others. For more information on how a specific law change may affect your business, please contact the members of our State & Local Tax Practice listed in this publication.