Multistate Tax & Nexus

Multistate Sales/Use Tax – Benefits of Voluntary Disclosure for Construction Contractors

Construction contractors that discover a delinquent sales/use tax liability from failing to collect tax on taxable sales can typically minimize their liability by participating in a state voluntary disclosure program (or amnesty program). In Ohio, and in the majority of states, construction contractors are deemed to be consumers of their materials incorporated into the constructed... Read More

Employer State Income Tax Withholding with Today’s Mobile Workforce

Even in the day of teleconferences and electronic interaction, face-to-face communication with business contacts is inevitable. This in-person touch often requires employees to venture outside their home state, thereby earning a portion of their salary/wages in the state where they are present. For example, sending a sales rep to visit an out-of-state customer, or a... Read More

MTC Proposes Measures to Simplify State Income Tax Withholding for Mobile Employees

The Multistate Tax Commission’s (MTC) Executive Committee has approved a Model Mobile Workforce Statute which would limit an employer’s obligation to withhold state income taxes when it sends employees into a state for a limited time. Under current law, many businesses face the burden of withholding another state’s income tax from an employee’s compensation when... Read More

Multistate Exemption Certificate Used to Support the Resale Exemption

All businesses engaging in interstate commerce should be familiar with the Multistate Exemption Certificate, which can be used to support the resale exemption from sales and use tax in a substantial majority of states. Although each state has its rules with respect to whether a particular sale is exempt, the Multistate Tax Commission has created... Read More

District Court of Colorado Delivers Injunction To Online Retailers

The U.S. District Court of Colorado entered an injunction against the Colorado Department of Revenue yesterday in favor of the Direct Marketing Association which is a global trade organization that includes Amazon, Inc.  Essentially, the ruling bars the State of Colorado from enforcing a recent statute requiring out-of-state vendors to notify in-state customers of their... Read More

Iowa Supreme Court Fries the Colonel for $250M

The Iowa Supreme Court recently handed down a decision in the case of Kentucky Fried Chicken v. The Iowa Department of Revenue and Finance, affirming the imposition of Iowa’s corporate income tax on KFC, despite lacking a physical presence in the state. The price tag for KFC was nearly a quarter billion dollars.  KFC, which... Read More

Disclosure of Customer Names Protected by Free Speech

In a decision last week, the U.S. District Court for the Western District of Washington ruled that internet retail giant was protected from disclosing its customer names and certain other information to the North Carolina Department of Revenue. The Court ruled that the First Amendment protected the “disclosure of an individual’s reading, listening and... Read More

Sales and Use Tax Nexus – Renting an Out-Of-State Warehouse

Much attention is given to the presence of an employee or agent in a state when analyzing whether a business has nexus for sales and use tax collection purposes on its sales. This generally causes other nexus creating activities to be overlooked. One such activity is renting a warehouse or other storage space in a... Read More

State Tax Administrators Teaming Up

Clearly, state tax enforcement is becoming more aggressive and complex.  Not only are state revenue agencies utilizing the Internet more and more to search for and identify businesses directing sales activities towards their respective states, but these agencies are also entering into agreements to share information with each other.  Ohio is a member of at... Read More

Voluntary Disclosure, a Procedure to Minimize Delinquent State Tax Obligations

As state tax attorneys, we commonly encounter situations where a company has a state tax obligation with a foreign state without even being aware that such an obligation exists – for instance, through the presence of an agent or representative performing installation or repair services on the company’s behalf,  attendance at a trade show or... Read More