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State & Local Tax Update: 11/3/15

Posted 12:00 PM by

State & Local Tax Update

Indiana Tax Amnesty 2015

Indiana’s “Tax Amnesty 2015” is underway and will run through Nov. 16, 2015. Similar to the amnesty program offered by Indiana in 2005, the program provides an opportunity for individuals and businesses to disclose and pay unreported taxes that were due and payable for a tax period ending before Jan. 1, 2013, in exchange for abatement of penalties, interest, and collection fees or costs that would have otherwise been imposed.

Taxpayers who are eligible to participate in the amnesty program and choose not to participate will be subject to an additional penalty, effectively doubling the penalty that would ordinarily be imposed on a delinquent liability. Taxpayers who participated in the 2005 amnesty program are not eligible to participate.

For more information, visit


Alabama Enacts Factor-Based Presence Nexus Standard

Effective for tax years beginning after Dec. 31, 2014, Alabama has enacted a factor-based nexus standard for income tax, business privilege tax and the financial institution excise tax. A taxpayer will now have substantial nexus in Alabama when exceeding $50,000 of property, $50,000 of payroll, $500,000 of sales, or 25% of any of the three factors in Alabama. See HB 49 for details.

Alabama Adopts Economic Nexus Sales Tax Standard

Effective Jan. 1, 2016, Rule 810-6-2-.90.03 requires out-of-state sellers who lack Alabama physical presence, but make retail sales of tangible personal property into the state and have a substantial economic presence in Alabama, to register for a license with the Alabama Department of Revenue and to collect and remit tax. 

Registration is required when:

  1. The seller's retail sales of tangible personal property sold into the state exceed $250,000 per year based on the previous calendar year's sales
  2. The seller conducts one or more of the activities described in Ala. Code § 40-23- 68

Georgia Tribunal Finds Successor Liable for Unpaid Tax

Assessments were affirmed against the successor entity of a hotel operator for unpaid sales taxes, penalties and interest. The successor entity was personally liable for unpaid taxes because it did not require the previous owner to produce either a receipt from the commissioner showing that the taxes, interest and penalties have been paid – or a certificate stating that no sales and use taxes interest, or penalties were due. Further, the assessment was not barred. 

See Douglasville Hospitality Inc. v. Riley, Ga. Tax Tribunal, Dkt. No. TAX-SUT-1526300 for additional information.

Indiana Updates Sales Tax Guidance to Medical Profession

Information Bulletin 48 has been updated to reflect clarifying changes applicable to the medical profession, per recently passed HB 1472. 

Michigan Issues Bulletin Discussing Sales Tax Treatment of Delivery and Installation Services

RAB 2015-17 replaces RAB 2002-11 and outlines the Michigan Department of Treasury’s position on when delivery and installation services are taxable within the state.

Ohio Introduces FAGI Billing Program

Beginning Oct. 14, 2015, the Ohio Department of Taxation will mail out Federal Adjusted Gross Income (FAGI) billing notices to taxpayers if there is a discrepancy between tax return information that was reported to the Internal Revenue Service on the U.S. Individual Income Tax Return Form 1040 and what was reported on the Ohio Individual Income Tax Return Form IT-1040.

See FAGI Billing for more information about the program.

Ohio Introduces Unreported Income Billing Program

The Ohio Department of Taxation announced that it began mailing out CP2000 billing notices to taxpayers that failed to file an amended Ohio Individual Income Tax Return Form IT-1040X, which is required to be filed after resolving a CP2000 audit with the Internal Revenue Service.

See CP2000 Billing for more information about the program. 

Washington Enacts New Nexus Standards for B&O Tax

Effective Sept. 1, 2015, out-of-state businesses making wholesale sales into Washington will be subject to business and occupation tax under the wholesaling classification if they meet any of the Washington economic nexus thresholds during the preceding calendar year.

The economic nexus thresholds include:

  • More than $267,000 of gross income in Washington
  • More than $53,000 of payroll in Washington
  • More than $53,000 of property in Washington
  • At least 25% of total property, payroll or income in Washington

The gross income threshold is calculated using both apportionable income attributable to Washington and wholesale sales delivered into the state. See Tax Topics for more information.

About the Author
Donna Niesen is a partner in Katz, Sapper & Miller’s State and Local Tax Group. Donna helps keep clients up-to-date on the multitude of tax rules and requirements in all 50 states. She guides them in the right direction as they address the complex issues that emerge on both the state and local levels. Connect with her on LinkedIn.

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