SALT Blog - SALT Blawg

by Jennifer Karpchuk

CALIFORNIA

California Shifts Burden of Proof in Vacation or Secondary Home Assessment Appeals from County to Taxpayer

The California Legislature adopted Bill 711, effective January 1, 2012, which clarifies that an owner-occupied single-family dwelling means one that is the owner’s principal place of residence.  Thus, only single-family dwellings that are the principal place of residence of the taxpayer qualify for a homeowner’s property tax exemption.  With regard to such properties, the assessor has the burden of proof in any assessment appeals hearing.  Conversely, when the property involves a taxpayer’s vacation or secondary home in California, the Bill shifts the burden of proof from the assessor to the taxpayer.

FLORIDA

Amazon.com Offers Thousands of Jobs in Florida in Return for Legislation Allowing Company to Bypass Sales Tax

According to the Associated Press, Amazon.com has offered to bring thousands of jobs to Florida in exchange for legislation allowing Amazon.com to bypass sales tax collections for two (2) years.  Amazon.com would bring approximately 2,500 to 3,000 jobs to the state if legislation is adopted giving the company the two (2) year tax break it is seeking.  As we previously reported,during 2011, Amazon.com sought a similar deal from South Carolina, resulting in the passage of a Bill granting the company a five-year state sales tax safe harbor.

MARYLAND

Maryland Schedules February 18, 2012 “Shop Maryland Energy Weekend”

Maryland has scheduled a sales tax holiday for energy efficient equipment for the weekend of February 18^th.  During the so-called “Shop Maryland Energy Weekend,” taxpayers may purchase the following products, free from sales and use tax: air conditioners, washers and dryers, furnaces, heat pumps, boilers, solar water heaters, dehumidifiers, programmable thermostats, standard size refrigerators, and compact fluorescent light bulbs.

MICHIGAN

Michigan Tax Tribunal Grants Motion for Summary Disposition for Corporate Officer Held Personally Liable whose Company Did Not Protest Underlying Assessment

In Bass v. Michigan Department of Treasury, the Michigan Tax Tribunal granted a Motion for Summary Disposition.  Tax assessments were originally issued to Michigan Air Control Distributing, Inc., the company for which the Petitioner was a responsible officer.  When Michigan Air Control Distributing, Inc. did not appeal the assessments, they were rendered final.  The Petitioner agreed that he was a responsible officer, but contested the underlying assessments against the company.  However, since the assessments were not appealed by the company and were therefore final, the court found that Petitioner was unable to challenge the assessments.

Writ of Certiorari Denied in Michigan Retroactivity Case

On January 23, 2012, the U.S. Supreme Court denied the petition for writ of certiorari filed in General Motors Corp. v. Dep’t of Treasury. As previously reported, General Motors Co. filed a petition for writ of certiorari with the United States Supreme Court to address the issue of whether Michigan’s attempt to retroactively deny the taxpayer’s refund claim through the application of an eleven (11) year retroactive use tax amendment was unconstitutional.  The Michigan Court of Appeals held that the retroactive amendment was constitutional.  Thereafter, the Michigan Supreme Court denied GM’s application for leave to appeal the Court of Appeals’ decision.   Since the U.S. Supreme Court denied cert, the Michigan Court of Appeals’ decision will stand.

MONTANA

Montana Issues List of FAQs Related to Individual Income Taxes

The Montana Department of Revenue issued a list of frequently asked questions on individual income taxes, applicable for the 2011 tax year.  The frequently asked questions provide guidance on a number of topics, including, but not limited to: amended returns; electronic filing; credits; estimated payments; extensions; filing deadlines and requirements; penalties and interest; military personnel; and part-year and non-residents.

Montana Explains No Deduction Available for Medical Marijuana

Montana clarified that medical expense deductions are not available for medical marijuana.  Pursuant to Montana’s Medical Marijuana Act, physicians do not prescribe medical marijuana because pursuant to Federal law they are prohibited from doing so.  Instead, the physicians merely certify the qualifying patient.  Since only drugs that a physician prescribes are allowed as an itemized deduction for medical expenses, medical marijuana does not qualify.

TEXAS

Writ of Certiorari Denied in Texas Entertainment Association

On January 23, 2012, the U.S. Supreme Court denied the writ of certiorari in the case of Texas Entertainment Association, et al. v. Combs et al., which addressed the issue of the constitutionality of a $5 per customer fee on businesses that provide adult entertainment and allow the consumption of alcohol on its premises.  The Texas Supreme Court upheld the constitutionality of the fee.  Since the U.S. Supreme Court denied cert, the Texas Supreme Court’s decision will stand.

UTAH

Sales of Online Human Resources Services Not Subject to Utah Sales Tax

The Utah State Tax Commission released a private letter ruling holding that sales of online human resources services, sold for a fee to clients which create their own software, are not subject to Utah sales tax.  The private letter ruling reasoned that because the taxpayer’s services were not one of the enumerated services subject to Utah sales tax pursuant to the Utah Code, and because the taxpayer’s custom software is not prewritten computer software, the online human resources services are not subject to Utah sales tax.  Moreover, the private letter ruling found that although some of the reports were considered computer-generated output taxable under the law, they fell within an exception since the primary object of the sale was the taxpayer’s research and analysis services and not the software code.

Utah State Tax Commission Revises Weighted Sales Factor Apportionment

The Utah State Tax Commission revised Utah Administrative Rule R865-6F-8, effective December 22, 2011.  The revision affects apportionment under the three-factor and double-weighted sales factor elections.  If the taxpayer elects the equal three-factor calculation and one or more of the factors is missing, the factors present must be added and the sum divided by the number of factors present.  Conversely, if the taxpayer makes an election to double weight the sales factor and one or more of the factors is missing, the fraction is determined by adding the factors present and dividing the sum by the denominator, then reducing by one if the property factor is missing, one if the payroll factor is missing, and two if the sales factor is missing.

VIRGINIA

Virginia Introduces “Amazon” Legislation

Virginia introduced legislation, SB 597, which would require Amazon.com to collect sales tax if it builds distribution centers in the state.The legislation comes after Amazon.com’s December announcement that it plans to open two (2) distribution centers in Richmond, Virginia.

WEST VIRGINIA

West Virginia Passes Bill Providing Tax Break to Ethane Cracker Plant

The West Virginia Legislature passed – and the Governor signed – Bill 4086, which provides a twenty-five year property tax break to any business that invests at least $2 billion to build an ethane cracker plant in the state.  The Bill levies property taxes on both real estate and equipment at 5% of assessed value.  The Bill is an attempt by West Virginia, currently in competition with neighboring states, to attract a cracker plant to build in the state.