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Entries by donna-niesen

How Wayfair v. South Dakota Changed M&A Due Diligence

Posted 5:50 PM by
The U.S. Supreme Court recently shifted one of the foundational principles that determine how a state can tax business transactions within its boundaries. This change will have a cascading effect in the deal space. In South Dakota v. Wayfair (Wayfair), the court held that an out-of-state company could establish nexus by exceeding certain thresholds of dollar volume or number of sales into the state, a standard known as “economic nexus.” Moving forward, potential buyers and sellers need to understand the new complexities the Wayfair decision has added to the due diligence process. It is more important than ever to have deep knowledge of what the target business sells, where it has established nexus, and whether or not it has complied with obligations in those states.
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Dispelling Myths About Sales Tax Obligations After the Wayfair Decision

Posted 7:30 PM by
It’s rare for a Supreme Court tax case to make headlines in the mainstream media, but that’s just what happened last year when the court announced its decision in the case of South Dakota v. Wayfair (Wayfair). What most folks “learned” from the coverage was actually full of half-truths and myths, the biggest one being that Internet retailers like Amazon would have to start “charging customers” state sales tax on their purchases. As with most news reports about taxes, reporters did their best to summarize a complex issue, but many taxpayers were left confused about how the change affects them. This confusion is now playing out in the day-to-day operations of businesses across the country, leaving many out of compliance when they otherwise thought they were.
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Indiana Changes Policy on Taxability of Documentation Fees

Posted 3:00 PM by
Indiana has recently issued an updated version of Sales Tax Information Bulletin #28S, changing its policy on the taxability of documentation fees, effective April 2, 2019. Historically, the Indiana Department of Revenue (IDOR) has treated these fees as if they were separate from the sale of the vehicle. It treated them as fees for helping a customer title and register a vehicle with the Indiana Bureau of Motor Vehicles (BMV). This is a nontaxable service in Indiana, so the documentation fees were not subject to sales tax. However, effective April 2, 2019, the IDOR will assume documentation fees are subject to sales tax if they are not “convenience fees,” a specific term that is defined in statute.
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Living in a Post-Wayfair World: How Failure to Comply Can Hurt Your Business

Posted 6:30 PM by
The Supreme Court’s recent South Dakota v. Wayfair decision allows states to require sellers to collect and remit sales tax based on the establishment of economic nexus. Though many businesses have taken note, they’re still asking, “Does this really affect me?” For many businesses, doing the same things this year that you did last year could mean new state tax obligations. Beyond upholding many states’ existing laws, Wayfair has inspired others to propose similar statutes or enforce existing ones more vigorously. In fact, more than 30 states have enacted or proposed economic nexus standards.
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New York State & Local Tax Update: October 2018

Posted 2:30 PM by
New York lawmakers enacted a program to potentially circumvent the Tax Cuts and Jobs Act (TCJA), which imposes a $10,000 cap on the state and local tax (“SALT”) deduction for individuals who itemize their deductions. This Employer Compensation Expense Program (“ECEP”)created an elective Employer Compensation Expense Tax (“ECET”) that employers can elect to pay if they have employees that earn over $40,000 annually in wages and compensation in New York state.
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What the Wayfair Decision Means for Out-of-State Sellers

Posted 4:30 PM by
The Supreme Court of the United States made headlines this summer when it announced a decision that would dramatically affect how states impose sales tax collection responsibilities. The court’s ruling in South Dakota v. Wayfair allowed states to require that sellers collect and remit sales tax based on the establishment of an “economic nexus,” doing away with the previous “physical presence” test. The ruling has significantly expanded the states’ authority in the sales tax arena, and businesses in every state will likely be impacted.
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New York State & Local Tax Update: July 2018

Posted 6:00 PM by
Businesses subject to New York City’s Commercial Rent Tax (CRT) will now be able to claim the new CRT credit on their June 1, 2018–May 31, 2019 tax return.
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State & Local Tax Update: Connecticut’s Response to Tax Reform

Posted 5:40 PM by
The Connecticut General Assembly recently passed legislation which made changes to the state’s taxing system effective for tax years beginning on or after Jan. 1, 2018. Most significant is the imposition of tax on pass-through entities that are doing business in Connecticut.
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Supreme Court Rules States Can Collect Online Sales Tax

Posted 6:01 PM by
In a 5-4 decision today, the Supreme Court turned the sales tax world on its head by overturning South Dakota v. Wayfair. The decision reverses decades of history related to sales tax nexus and a retailer’s obligation to collect and remit tax when it sold its products across state lines. Disavowing the old physical presence standard established by Quill, the high court’s ruling now opens the door for states to impose an economic nexus standard when it comes to sales tax collection responsibilities.
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State & Local Tax Update: New York’s Response to Tax Reform

Posted 5:29 PM by
The 2018 New York State legislative session is well underway. The New York State Assembly’s biggest accomplishment thus far is the March 30 passage of the state’s 2018-19 budget bill (S07509C), which was then signed into law April 12, 2018, by Gov. Cuomo. While this budget bill provides some guidance on New York’s stance relating to the changes made by the Tax Cuts and Jobs Act (TCJA) (Public Law 115-97, 12/22/2017), the assembly’s budget bill ultimately came short in responding to several TCJA issues.
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