The DMA Way

Completely Compliance- Across the Country

by DMA Staff | Oct 17, 2017
Completely Compliance- Across America
Looking Back
Arkansas: The Governor signed Act 465 which reduced the percent threshold for refund allowed for capital replacement and repair projects. Note the breakdown below:

Current   4.875%   July 1, 2020   1.875% 
July 1, 2018  3.875%   July 1, 2021  0.875%
July 1, 2019  2.875%  July 1, 2022  Exempt

Colorado: After the simplification in Arizona, the state of Colorado is now reviewing the possibilities of a similar path. HB 1216 established a Sales and Use Tax Simplification Task Force. The Task Force will be conducting studies on various simplification tactics
between state and local jurisdictions, in particular home-ruled jurisdictions. UPDATE: This bill passed June 5th. The Committee must bring recommendations and reports to council every November 1.

Connecticut: SB 787 introduced a tax amnesty program, or Fresh Start Agreement, for qualified taxpayers. The program would have fallen between July 1, 2017 and October 31, 2018. Penalty would have been waived and interest would be waived at 50%. The Connecticut session ended June 7, but this could come up again.

Hawaii: In an effort to decrease the instances of taxpayers not abiding by proper filing frequencies, the state has announced a change in how filing frequencies are determined. Currently, the filing frequencies are established at $2,000 or less liability in a calendar or fiscal year as an annual filer and $4,000 or less as a quarterly filer. Any returns filed on non-quarter or non-annual months will automatically convert the filing frequency to monthly regardless of liability totals. Effective July 1, 2017 for returns due August 20, monthly filing frequencies are the default. For quarterly or annual filers, you will continue to be so unless returns are filed on off months.

Illinois: The state changed the license renewal process. HB 819 established that any certificate renewed on or after July 1 is due one year from the date of issuance. Previously, the renewal rate was for five years.

Also in Illinois, HB 821 had a significant impact on compliance practices. Effective January 1, 2018, returns will be required to be filed electronically if gross receipts average $20,000 or more. As of August 24, 2017, both bills were passed.

Kansas: The state (Marion County) could have expanded the service types which are subject to sales and use tax in HB 2380. The following NAICS codes would have been subject to tax: 488410, 5311310, 561440, 561611, 561612, 561621, 561720, and 812910. The taxable services would have been effective July 1, 2017. Also included in this bill is the 5.5% rate on the gross receipts derived from the sale of food items and ingredients. Special food descriptions apply. The rate applies July 1, 2020. Update: Session has adjourned with no further action on the bill.

New Mexico: HB 408 provides updated details on refund request requirements. These requirements include a written statement of facts for the basis of refund and all documentation to substantiate the claim and the necessary amended returns . The bill was signed by Governor Martinez on April 6, 2017.

Oklahoma: There are several bills to note in Oklahoma. The first is HB 2367 which was approved by the Governor on May 24, 2017. The bill eliminates the ability for the vendor to collect 1% of tax remittance by way of a vendor discount. This was effective July 1, 2017.

Also HB 2380 allows for a Voluntary Disclosure Initiative. The program functions as a tax amnesty program and will run from September 1, 2017 to November 30, 2017. Penalty, interest and other fees will be waived.

Finally, HB 2131 creates the Oklahoma Tourism Development Act. The act allows an approved company a sales tax credit of 10% if the company expends approved costs of $500,000 to $1,000,000 on tourism improvements on an approved tourist attraction. Costs in excess of $1,000,000 can be entitled to a 25% sales tax credit of the approved costs. The link to the bill verbiage provides definitions on approved companies and approved tourist attractions as well as other limitations which may apply.

Puerto Rico: Per Circular Letter 17-01, the Territory is offering a back-to-school sales tax holiday. The holiday commenced on July 12 and ends at midnight on July 13. An additional holiday will begin January 10 and end on January 11. During the holiday, school uniforms and supplies will be exempt. Descriptions and listings of materials are available at the link. NOTE: the link is in Spanish, but if opened in Google Chrome, can be easily translated into English.

Looking Forward
Arizona: Throughout the next few years, Arizona will move to mandatory eFile/ePay. Effective January 1, 2018, all businesses with TPT liability of $20,000 or more in the prior year will be required to eFile and ePay. This reduces to $10,000 on 1/1/19, $5,000 in 1/1/20 and $500 in 1/1/21. The bill also in includes changes in the audit process and penalty assigned.

Colorado: Originally considered back in 2010, the Centennial State has joined other noted states in requiring use tax notification from retailers with at least $100,000 in sales to Colorado customers annually and do not collect sales tax. Specifications on the notifications can be found on Rule 39-21-112 (3.5).

Georgia: Effective June 30, 2017, companies may now request tax clearance letters online through the Georgia Tax Center (GTC). If you are unsure of your login, your DMA compliance team may be able to assist.

Cook County, Illinois: With the lawsuits over the Cook County Sweetened Beverage Tax being dismissed (Regulation 2017-3), the County now assesses a $0.01 per ounce tax on all sweetened beverages sold within the County. Liability for the tax is on the purchaser, while distributors collect the tax and remit it to the state. Tax should be collected effective August 2, 2017. In addition, retailers of these drinks will also need to submit a Floor Tax return by September 20, 2017 reflecting inventory owned as of August 1, 2017, but tax was not paid.

Filing frequency thresholds are increasing now thanks to HB 2212. The new amounts are effective January 1, 2018.

Kansas  Old   New
 Annual $80  $400 
 Quarterly $3,200  $4,000 
 Monthly $32,000  $40,000 

Louisiana: On June 14, Governor Edwards signed bill 307, becoming Act 211. The bill will require a tax clearance issued by the Department of Revenue before the Department will issue or renew a resale certificate. It is effective October 1, 2017.

New Jersey: In addition to the MTC disclosure program, the state of New Jersey will also conduct their own VDA program. The Division of Taxation will waive late filing and payment penalties, but they will impose a 5% penalty for not taking advantage of the amnesty program offered back in 2009.

North Carolina: SB 81 would create an economic nexus for remote sales in the state. The thresholds are $100,000 in North Carolina sales in the previous year or 200 or more separate transactions. The bill passed the Senate on June 13, and there was a first reading in the House two days later. However, there has been no movement on the bill since.

Rhode Island: Per HB 5175, the state will implement economic nexus for remote sellers and marketplace providers whose gross revenue equals or exceeds $100,000 for electronically delivered products and services or 200 separate transactions from the preceding calendar year. If the seller does not register for a permit, then use tax notification requirements apply. The new requirements are effective January 1, 2018.

Also in Rhode Island, effective July 1, 2017, the state is issuing new account numbers for account holders. The new numbers are an effort to increase security and efficiency within the department and process payments quicker, particularly for multiple location businesses.

Tennessee: In order to maintain compliance with the SSUTA, the state established several changes that were to take effect July 1, 2017. However, it was announced that these changes will be postponed until July 1, 2019. Some of the significant changes include sourcing to shipping destination, multiple location filing and changes to the single article tax.

Hartford, Vermont: Among a list of other local jurisdictions, the city of Harford, Vermontwill also enact a Local Option Meals and Rooms Tax of 1%. The new tax will be effective October 1, 2017 and is administered by the state. Tax collected should be reported on the Form MRT-441.

Seattle, Washington: On a steady increase, the rates and fees for the City’s Business and Occupation Tax (B&O) and Business License Tax Certificate Fee are making their final change in a three-year process. Effective January 1, 2018, the B&O rate for all classifications except service and freight increases to 0.00222%. Service and freight raise to 0.00427%. Tax Certificate Fees follow the amounts at right and the same effective date applies.

Annual Seattle Taxable Revenue Fee 
 $0 and $19,999  $55/$27.50 (after July 1)
 $20,000 - $499,999 $110 
 $500,000 - $1,999,999 $480 
 $2,000,000 - $4,999,999 $1,000 
 $500,000 or more $2,000 
 Branch locations  $10 per location