In case you missed it: Last week in Allyn Tax News
Illinois Sales and Use Revisions to Leveling Rules of the Game Act Flowchart
The Leveling the Playing Field Retail Act flowchart was updated by the Illinois Department of Revenue. This table helps retailers transact inside or outside a market. When a Marketplace Facilitator makes sales for a Marketplace Seller, state and local Retailer Occupancy Taxes (ROT) are incurred at different rates depending on the location of the inventory, l buyer and sales activities. For sales made from inventory located in Illinois and the selling activities occur out of state, ROT is incurred at the tax rate in effect at the location of the Illinois inventory. When sales activities occur in Illinois, ROT is incurred at the tax rate in effect at the location of the sales activities. Additionally, where a sale is made with inventory sourced out of state and sales activity also occurs out of state, ROT is incurred at the prevailing tax rate. at the buyer. When an out-of-state retailer sells out of a marketplace, but is physically located in Illinois, the retailer is responsible for collecting and remitting ROT at the original rate on sales activities or use tax on sales activities.
The level playing field flowchart for the Illinois Retail Act can be found here: https://www2.illinois.gov/rev/research/taxinformation/sales/Documents/LevelingthePl ayingFieldRetailerFlowchart.pdf
Purchase of out-of-state vehicle determined to be subject to use tax in Washington
The Washington Administrative Reviews and Hearings Division (ARHD) found that an out-of-state taxpayer’s purchase of a travel trailer, which was driven to Washington and then sold to a nonresident corporation , was subject to the use tax. The taxpayer argued that because the vehicle was purchased out of state and then sold to a nonresidential buyer two months later, his purchase should not have been subject to Washington’s use tax. However, the taxpayer took control of the vehicle the first time he drove it to Washington, which made it subject to the use tax.
Wisconsin’s 6-digit Certificate of Exempt Status (CES) is no longer valid
As of July 1, 2022, retailers are no longer able to accept 6-digit CES numbers from exempt organizations claiming sales and use the tax exemption on purchases made. Retailers are therefore not required to update the documentation containing the 6-digit CES, but rather must obtain the following information for sales made on or after July 1, 2022:
– The 15-digit CES number of an eligible organization starting with 008 and write it on the bill of sale, or
– A fully validated exemption certificate (Form S-211) from the organization containing the 15-digit CES number
Wisconsin Sales and Use – Nonprofit Exemption
The exemption threshold amount for sales by non-profit organizations has been significantly increased for the state of Wisconsin. Effective 06/01/2022, the total exempt amount for occasional sales of tangible personal property and services, including sales of entertainment admissions, increased from $10,000 to $50,000.
Arkansas Rules Insufficient Sod Sales Records
In a case that reminds us all of the importance of detailed record keeping and careful posting, an administrative judge in Arkansas ruled in favor of an assessment method used by the Department of Finance and Administration. A departmental auditor sent several notices to the taxpayer to provide documents or face an assessment based on available information. Having received no response, the auditor assessed the gross receipts tax from 2015 to 2019 based on the taxpayer’s corporate income tax return. The taxpayer rebutted this method of valuation, saying the sales were primarily exempt under Arkansas law. Unfortunately, the taxpayer was unable to provide any documentation other than a personal testimony. As the taxpayer was unable to substantiate his rebuttal of the assessment, the method of assessment and subsequent penalties were upheld.
Utah Tangible Personal Property Filing Statement
Effective January 1, 2023, Utah taxpayers will no longer be required to file a signed annual return after the first calendar year in which a taxpayer qualifies for a tangible personal property tax exemption. If the taxpayer continues to benefit from the exemption, he is not required to submit a signed declaration each year. The exemption will be deferred.
Indiana – Nonprofit Sale and Use Exempt Entities
The list of Indiana nonprofit entities exempt from sales and use taxes has been clarified. A Voluntary Employee Benefit Association (VEBA) is not an exempt entity in Indiana. VEBAs are not directly listed or reasonably construed from Indiana’s Statutory List of Potentially Nonprofit Entities. Therefore, it should not appear on the Application for Sales Tax Exemption, Form NP-20A.
Sales and Use in Indiana – Glucose Strips and COVID Tests Deemed Taxable
In a two-for-one decision, the Indiana Department of Revenue ruled that glucose test strips and home COVID tests were not exempt from state gross sales tax. Glucose test strips have been found to be exempt in previous cases, but only when the strips themselves were provided free of charge. When sold separately, bands still generate gross sales tax. At-home COVID tests have been ruled taxable due to their lack of durability and non-compliance with Indiana’s definition of a medical supply or device. COVID tests are diagnostic tools, not treatment tools, making them subject to gross sales tax in Indiana.