States Struggle to Reach Budget Finish Line

As stated in previous posts on this blog, states are struggling to pass balanced budgets prior to the new fiscal year (July 1st), due to the issues they are having to address (i.e., cutting services or raising taxes).

The Wall Street Journal reported today that ten states are racing to finish budgets by the end of today.

Click on the following link to access the article:

http://online.wsj.com/article/SB124631641224470651.html

If you have any questions regarding the budget in your state (i.e., tax law changes that may impact you or your company), please contact me at leveragesalt@earthlink.net.

Amazon.com Severs Ties with Rhode Island and Hawaii Affiliates: Why?

Boston.com reported today that Amazon.com has discontinued its relationships or "Associates program" with its Rhode Island business affiliates after the state’s assembly passed legislation requiring the company to collect taxes.

Click on the following link to read the Boston.com article:

http://www.boston.com/business/articles/2009/06/30/amazon_cuts_ri_affiliate_ties_over_taxes/
Foxbusiness.com reported today that Amazon.com ended its relationship with online associates in Rhode Island and Hawaii to avoid paying potential new sales taxes in the states.

Click on the following link to read the FoxBusiness.com article:

http://www.foxbusiness.com/story/markets/amazoncom-pulls-rhode-island-hawaii/

Amazon did something similar last week in response to legislation in North Carolina.

So What?

You might be asking yourself, what is going on? Why is Amazon doing this? Why are the states doing this? Why do I care?

What is the Problem?

First of all, let's discuss what issue or problem Amazon is attempting to work around.

The problem is often called “Amazon nexus” because Amazon appears to believe this type of legislation is solely focused on them, or atleast originated with a focus on them. It is actually NOT a tax on Amazon. It is however, a tax on the consumer or purchaser of items from Amazon.

To clarify, any retail store (physical building) in your state currently has a legal obligation to collect from you (the purchaser) sales tax on any taxable items that you purchase. Online retailers like Amazon, who do not have a physical building or other physical presence in your state, have not had a legal obligation to collect sales tax from purchasers (until now in some states).

What “Amazon nexus” simply does is require online retailers to collect sales tax from purchasers if the online retailer has an affiliate or an independent contractor soliciting sales on behalf of the online retailer. In general, “solicitation” is presumed when the affiliate has a ‘web-link’ for the online retailer on the affiliate’s website. There are some other details and criteria (and each state's rules are slightly different), but in simple terms, that is what “Amazon nexus” is.

Therefore, under “Amazon nexus,” it doesn’t take much for the states to presume the online retailer has nexus, resulting in the online retailer being required to charge and collect sales tax from its online customers. It is up to the online retailer to ‘rebut’ or dispute the nexus presumption by the state.

New York enacted the first “Amazon nexus” statutes in 2008, and many other states are following suit this year.

Why Are States Doing This?

As stated earlier, the tax has always been due, but collection was dependent on customers (like you and me) reporting "use tax" to our respective state on taxable purchases for which we did not pay sales tax to the seller. This (as you might expect) does not happen like it should. Therefore, the states are attempting to work around this "loophole" or revenue loss, and collect the tax it is owed by making the seller (like Amazon) collect the tax from customers.

What Does This Mean for You?

If you are an online retailer who has affiliates, independent contractors or others with web-links to your site on their site, you may want to consult a state and local tax professional who can help you walk through the analysis and determine if you are now subject to “Amazon nexus” in certain states, or if any changes can be made to the way you do business.

As always, please contact me at leveragesalt@earthlink if you have any questions or would like assistance.

Pennsylvania: Proposing Combined Reporting and Market-Based Sourcing

Last week, the Pennsylvania House introduced a bill (HB 1775) that would make some changes to the corporate net income tax.

Unitary Groups

The bill mandates combined reporting for unitary groups of corporations when filing and paying corporate net income taxes. If enacted, the bill as it is written, would apply to tax periods beginning on or after January 1, 2011.

Service Businesses

The bill also proposes to change the way Pennsylvania apportions service income, changing from the income-producing activity test and cost of performance method, to the "new fad" of "market-based sourcing." Meaning (in simple terms), sales from services would be allocated to Pennsylvania if the customer is in Pennsylvania.

If part of the sales related to a specific contract or agreement to perform services is derived from customers in Pennsylvania, sales are allocated to Pennsylvania based on the ratio of the sales derived from customers within Pennsylvania to total sales.

Summary

At this point, this bill has only been proposed, it has not been enacted.

If you have any questions, please contact me at leveragesalt@earthlink.net or leave a comment.

Click on the following link to access the bill:

http://www.legis.state.pa.us/CFDOCS/Legis/PN/Public/btCheck.cfm?txtType=PDF&sessYr=2009&sessInd=0&billBody=H&billTyp=B&billNbr=1775&pn=2287

Texas: June 2009 Issue of Tax Policy News Now Available!

The June 2009 issue of Texas Tax Policy News is now available on Texas' Window on State Government website.

Click on the following link to access the issue:

http://www.window.state.tx.us/taxinfo/taxpnw/tpn2009/tpn906.html

If you have any questions on the topics discussed, please contact me at leveragesalt@earthlink.net.

Reminder: Minnesota Sales Tax Rate Increases July 1st!

Beginning July 1, 2009, the sales and use tax rate increases from 6.5% to 6.875% for all taxable sales, including leases of motor vehicles. However, the new rate does not apply to sales or purchases of motor vehicles subject to the state excise tax.

Click on the following link to access Minnesota's website and release regarding the sales tax rate change:

http://www.taxes.state.mn.us/taxes/sales/tax_information/content/general_rate_increase.shtml

Specific Guidance or Exceptions

There are special transition rules regarding when the prior rate of 6.5%, or the new rate of 6.875% applies for the following:

1. Construction Contracts
2. Leases of Tangible Personal Property
3. Motor Vehicles
4. Taxable items ordered before July 1 and delivered on or after July 1
5. Utilities and other Taxable Services
6. Memberships
7. Admissions
8. Meals and Catering Services

For more details on any of the above, please contact me at leveragesalt@earthlink.net.

NOTE: One of the keys regarding invoices which include pre- and post July 1st items, is to separately state the items sold or services provided prior to July 1st, versus those sold or provided after July 1st. This will allow the old rate to apply to pre-July 1st items. If the items are not separately stated, then the new rate will apply to all items on the invoice.

LeverageSALT is "State and Local Tax 360°" on AccountingWeb.com

This is a personal post, as I wanted to share that I have been asked to become a member of Accountingweb.com’s “Bloggers Crew.” My blog is entitled, "State and Local Tax 360°."

Click on the following link to check it out:

http://www.accountingweb.com/blogs/strahle_blog.html

Also, check out the other bloggers for practical insights on the accounting profession and other topics of interest.

Background on AccountingWeb.com

Not sure if you are familiar with Accountingweb.com, but Accountingweb.com provides accounting news, information, tips, tools, resources and insight regarding the accounting profession.

The “Bloggers Crew” is a small group of only 22 bloggers from around the country who blog on different topics related to the accounting profession on Accountingweb.com.

Accountingweb.com has been in business for approximately 10 years, and has had the “Bloggers Crew” for about the last 2 years. During that time, Accountingweb.com has denied requests from approximately 200 bloggers to join the crew. Therefore, I am very fortunate and honored to join this group and have this opportunity.

Accountingweb.com has approximately 50,000 e-mail subscribers. In addition, Accountingweb.com has strong working relationships with CPA societies across the country, and partners with many accounting and software vendors, etc.

Please check out accountingweb.com and the other bloggers on "Bloggers Crew."

Thank you.

Brian Strahle

Texas Raises Threshold For Paying Franchise Tax (Margin Tax)

HB 4765 was signed by the Texas Governor on June 16, 2009 raising the revenue threshold for paying Texas Franchise Tax (Margin Tax).

The bill raises the revenue threshold from $300,000 to $1,000,000. In other words, if the amount of the taxable entity's total revenue from its entire business is less than or equal to $1 million for the 12-month period on which margin is based, a taxable entity will NOT be required to pay any franchise tax for that period. The change applies to Franchise Tax Reports due in 2010 and 2011.

The bill also makes another change, starting January 1, 2012. For Franchise Tax Reports due in 2012 and beyond (for now), the revenue threshold will decrease from $1,000,000 to $600,000. Meaning, if the amount of the taxable entity's total revenue from its entire business is less than or equal to $600,000 for the 12-month period on which margin is based, a taxable entity will NOT be required to pay any franchise tax for that period.

Click on the following link to access a copy of the bill, HB 4765:

http://www.capitol.state.tx.us/BillLookup/Text.aspx?LegSess=81R&Bill=HB4765

If you have any questions, please contact me at leveragesalt@earthlink.net

California: IOUs Again?

If you recall, California delayed payments for 30 days back in February. Unfortunately, the fund shortage has raised its "ugly head" once again.

State Controller John Chiang said in a News Release:

“The State’s $2.8 billion cash shortage in July grows to $6.5 billion in September, and after that we see a double-digit freefall. Unfortunately, the State’s inability to balance its checkbook will now mean short-changing taxpayers, local governments and small businesses.”

The State Controller met with the Governor and Legislative leaders this week to warn them of the consequences of further budget delays. In addition to the burden on those who receive the notes, resorting to IOUs sends a signal that California has exhausted all other options to manage its cash flow.

Payment categories protected by the State Constitution, federal law and court decisions will receive regular payments in July. All other general fund payments will be paid with IOUs. These include payments to local governments for social services, private contractors, state vendors, income and corporate tax refunds, and payments for State operations including legislative per diem.

If IOUs are issued next month, the State Controller will launch a customer call-center to answer questions. The Controller’s Web site, www.sco.ca.gov, will be updated regularly with the latest information on the State’s cash position and related developments. The Controller's Web site also has several new Web pages with information about registered warrants.

Summary

California is in financial trouble and needs to act fast to stop the "bleeding."

Taxpayers who have California filing obligations may want to analyze their California tax liabilities more closely before making payments to California. Why? Because if you overpay your liability, you may not get it back (soon). On the flip-side, if you underpay your liability, you may be subject to penalties and interest.

Therefore, I am not suggesting taxpayers do anything differently when determining their tax liability, or estimating their tax liability for estimated payment purposes. I am only stating that taxpayers may want to attempt to be even more accurate when preparing estimated payments.

If you have any questions, please contact me at leveragesalt@earthlink.net.

Click on the following link to access the Controller's News Release:

http://www.sco.ca.gov/eo_pressrel_5940.html

Vermont: Amnesty Period SET!

Back on June 5, 2009, I posted that Vermont had authorized an Amnesty program to occur prior to October 2, 2009 (authorized by H.B. 441). Well, Vermont has released the dates of the Amnesty program.

According to Vermont, there will be a six week amnesty beginning July 20, 2009 and ending August 31, 2009 during which certain tax penalties will be forgiven upon payment of tax and interest.

Rules pertaining to the amnesty are available on the Department’s website.

TAXPAYER WARNING:

Similar to other states that have enacted amnesty programs, Vermont has clearly stated the amnesty will be followed by increased compliance efforts by the Department. In other words, it may be in a taxpayer's best interest to take advantage of the amnesty program if eligible.

If you have any questions, please contact me at leveragesalt@earthlink.net.

Click on the following link to access Vermont's release regarding the Amnesty:

http://www.state.vt.us/tax/pdf.word.excel/legal/legislation/Highlights%20of%202009%20Legislation.pdf

July 1st is Coming! Is Your State Ready?

This post is a general update to make you aware of what "time it is."

July 1st is approaching fast and several states will be working until the very end to determine their budgets for their new fiscal year. Those budget changes, as stated in earlier posts, could include cuts in services, tax law changes (increases) and/or both.

Several states at this point have called special sessions, or have "tax panels" or committees discussing a wide-range of possibilities. For example, as stated before, California is in "dire straits" and has been considering drastic measures (or just about anything and everything).

If you have any questions or concerns about a particular state, please contact me at leveragsalt@earthlink.net.

California: Considering Net Receipts Tax (NRT)??

Last week, the California Commission on the 21st Century Economy discussed a proposal to impose a business net receipts tax (NRT) replacing existing business taxes, in part or in whole. The proposed NRT appears to be similar to gross receipts taxes imposed by other states such as Michigan's Business Tax and Texas' Margin Tax (Franchise Tax).

On March 27, 2009, Governor Schwarzenegger issued an Executive Order to establish the Commission and examine California's tax system, searching for ways to modernize its tax system and eliminate the "ups and downs" of its tax revenues.

The likelihood that the proposal would actually be considered and passed is unknown at the moment; however, with the state's budget crisis only getting worse, I wouldn't rule anything out.

To read an analysis of the Commission's proposal, please click on the following link:

http://www.cotce.ca.gov/

In addition, the California Manufacturers and Technology Association (CMTA) is following this proposal and has a nice write-up on their site as well. Click on the following link to access their write-up:

http://www.cmta.net/legupdate.php?legupdate_id=1535

If you have any questions, please contact me at leveragesalt@earthlink.net.

New York City: Proposes to be Like New York State

New York City (NYC) wants to be like New York state (NYS), apparently. Two proposed bills (A. 8867 and A. 8866) would make several changes to NYC's tax laws. The proposed changes are similar to changes NYS recently adopted.

The bills have been approved by the Assembly. It is up to the Senate and Governor to approve and sign the bills before they are enacted.

The following is a list of SOME of the proposed changes:

1. Combined Reporting (affecting REITs and captive RICs as well)
2. Economic Nexus for banking corporations
3. Single-Sales Factor (phase-in)
4. Increase in Capital-Tax Ceiling
5. Replace fixed dollar minimum tax with a scaled rate based on NYC receipts
6. Allow a NOL deduction for banking corporations similar to the federal NOL
7. Amend definition of banking corporation to include investment company subsidiaries
8. Establish a voluntary disclosure program and compliance program

I will keep you posted on what NYC decides to do. Action on the bills is expected prior to July 1, 2009 (the start of NYC's new fiscal year).

As always, if you have any questions, please contact me at leveragesalt@earthlink.net

Purchasing Agent of Exempt Entity? Maybe.

Some states allow contractors to buy materials tax free when performing work for exempt entities. Generally, the exemption from tax is based on the state considering the contractor to be a "purchasing agent" of the exempt entity. In other words, the contractor is considered to be buying the materials on behalf of the exempt entity. However, please note that certain criteria and procedures are required to be followed to obtain such exemption.

On the flip side, several states do not allow contractors to buy materials tax free when performing work for an exempt entity. Therefore, it is very important for contractors to know the tax laws of the particular state in which the project or materials purchase takes place.

If you have any questions, please contact me.

LeverageMotivation: Vision and Hope (My Drugs of Choice)

I don't know about you, but when I get a vision, a goal I want to achieve, and there are steps I can take today to achieve it, I get really excited. I get this burst of energy, motivation and urgency.

Now, along with the vision, there has to be hope that the vision or goal can actually be achieved. Without hope, the vision dies. Without a vision, people die.

A vision and hope give people purpose; something to work for; something to live for.

What is your vision? What is your hope?

LEED / Sustainability Tax Incentives

According to the National Association of Industrial and Office Properties (NAIOP), Leadership in Energy and Environmental Design (LEED) adoptions are advancing in the U.S. and worldwide:

• 12 Countries
• 12 U.S. Federal Agencies
• 28 U.S. States
• 120 U.S. Cities, Towns and Counties
• 48 U.S. schools and institutions of higher learning

In addition, several cities across the U.S. impose LEED requirements for private buildings.

Tax Incentives Related to LEED

As you may know, not only has LEED requirements produced energy and operating cost savings, but also numerous federal and state tax incentives.

According to NAIOP, there are 37 tax incentives available in 18 U.S. States for energy efficient buildings, in addition to several federal incentives. There are also 132 state incentives and one federal incentive available for renewable energy. Almost all states have tax incentives for "Green" construction resulting in either a tax credit or tax deduction related to a state’s income tax, property tax or sales tax.
The amount of the tax incentive often depends upon the level of LEED certification achieved.

Real Estate Developers Can Benefit from LEED Tax Incentives

State tax incentives generally apply to the owner or lessee of the property. Hence, real estate developers may or may not be able to benefit from the tax incentive. If a real estate developer is able to benefit from the incentive for developing the property; upon sale, some incentives are transferable to the buyer.

In cases where the real estate developer cannot benefit from the incentive, the buyer of the developer's properties should be able to benefit.

Knowing the full range of available incentives can help developers, investors, and buyers of buildings adequately assess the total cost of sustainability. It may also provide real estate developers with an edge when marketing its buildings against competitor’s buildings.

Therefore, when building sustainable speculative or build-to-suit properties, it is important to know the tax incentives associated with the level of LEED certification.

Please consult a knowledgeable state and local tax professional (ME) to help you identify LEED tax incentives during the design/planning stages, and in the marketing/selling stages.

Questions or issues? Contact me.

Sales Tax and Subcontract Agreements: Language Please?

Subcontract agreements may state that "subcontractors are liable for all applicable sales taxes" or that "sales tax is included;" however, that does not mean the subcontractor actually charged you tax or paid tax on the materials they purchased (if applicable). Therefore, the contract language may not relieve you from liability under audit. So what do you do?

Generally for sales tax purposes, the invoices and billings take precedent over the contract language. Meaning, if the invoice or billing does not charge or separately state tax, then no tax was collected or remitted. Hence, invoices and billings should be reviewed to determine if you were actually charged tax instead of relying solely on the subcontract agreement.

Remember, all states and cities do not tax developers, general contractors and subcontractors the same. Therefore, sales tax may or may not be required to be separately stated on invoices.

To combat this complexity or ambiguity, it is obviously important to know the state and city tax rules regarding your project to verify that your tax obligations are accurately being addressed.

Therefore, it is important to consult a knowledgeable state and local tax professional (me) to address these concerns.

Questions or issues? Contact me.

Amazon Threatening Cuts if "Vendor Presumption" Nexus Bills Continue to Pile Up

In a Wall Street Journal article today, the writer states Amazon is threatening to stop its 'affiliate program' in North Carolina, if North Carolina enacts an "amazon nexus" or 'vendor presumption bill' similar to New York's.

Click on the following link to access the Wall Street Journal article:

http://online.wsj.com/article/SB124536499760129079.html#mod=rss_economy

Other States Following New York

As you may or may not know, New York enacted a new affiliate nexus standard for sales tax vendors last year. However, as soon as it was enacted, Amazon filed a lawsuit claiming it was unconstitutional. The New York Supreme Court ruled against Amazon.

For more, see my post on April 3, 2008:

(http://leveragesalt.blogspot.com/2009/04/amazon-nexus-next-epidemic.html)

The April 3, 2008 post discusses the "Amazon" nexus epidemic and how the New York Supreme Court's ruling has spurred other states to join the 'bandwagon.' North Carolina was one of them.

Additional Modifications to New York's Law

New York recently added additional clarifications and qualifications to its "vendor presumption statute" affecting sales or uses occurring on or after June 1, 2009.

Click on the following link to access New York's Tax Policy guidance (TSB-M-09(3)S, May 6, 2009)

http://www.tax.state.ny.us/pdf/memos/sales/m09_3s.pdf

Why Should You Care?

I won't get into the technical details here, but if you are an out-of-state remote seller (without a physical presence in the state), and you are using or working with in-state companies (related or unrelated) to direct traffic to your website ('clicking through' or 'affiliate program,' etc.) you may have sales and use tax exposure.

If you have any questions, please contact me at leveragsalt@earthlink.net.

Other State Tax Blogs????

Although I blog, and consult on Texas and Michigan state tax developments, I wanted to write a post highlighting two other blogs as resources for you:

The Texas State and Local Tax Law blog by Alan E. Sherman (http://www.txsaltlaw.com/).

The Michigan State and Local Tax blog by Ed Kisscorni (http://michiganstateandlocaltax.com/).

There are very few state and local tax blogs out there, so I want to highlight them when I find them.

Again, one of my missions is to make the state tax profession more interactive and accessible to companies and taxpayers. Its nice to see other firms attempting to accomplish the same thing.

If you are aware of any other state tax blogs, please post a comment or contact me at leveragesalt@earthlink.net.

California Limited Liability Companies (LLCs): Which Form do I File? Do I Owe $800?

The following is general guidance in response to a question I received.

Issue/Question:

If an LLC's only activity or California income is from owning an interest in a California (CA) Limited Partnership, is the LLC required to file California Form 565 or Form 568? Does the LLC owe the $800 minimum tax?

Considerations:

Is the LLC registered with the CA Secretary of State (SOS)?

Is the LLC a limited partner in the CA LP?

Summary:

Generally, if the LLC’s only connection with CA is being a limited partner in a CA LP, and the LLC is not registered with the CA SOS, then it shouldn't be considered to be doing business in CA; and thus, not subject to the $800. The LLC in this case would file form 565.

Generally, if the LLC is registered with the CA SOS, OR is a general partner, OR is otherwise doing business in California, it should file Form 568 and pay the $800 plus LLC Fee.

NOTE:

As with any tax advice, the conclusions reached are always based on the facts and circumstances of each case. Therefore, the above is provided as guidance, but should not be followed without consulting a knowledgeable state and local tax professional to confirm the application to your facts.

If you have any questions, please contact me at leveragesalt@earthlink.net.

Sales Tax and Disregarded Entities: Who is the Taxpayer?

Does your company's corporate or legal entity structure cause confusion when it comes to the sales tax area? Meaning, does your structure involve various "pass-through" or "disregarded" entities?

Using Multiple Entities in the Same State?

What does that mean? "Pass-through" or "disregarded entities" are generally considered divisions or a part of their owner for federal tax purposes. Hence, they are not taxed separately from their owner. However, for state and local sales tax purposes, most states treat each "pass-through" or "disregarded entity" as a separate taxable entity. Therefore, it is very important when making a purchase for a specific project or filing for a business license, that the correct entity’s name and other identification is used. This issue arises especially in states where your company has multiple entities conducting business.

"Resale Certificates" and "Direct Pay Permits" Confusion

Another situation in which the issue arises is when "resale certificates" or "direct pay permits" are utilized by multiple entities. Resale certificates and direct pay permits are generally issued to a specific legal entity and cannot be transferred or utilized by other entities. Hence, it is very important that vendors have the correct information in their records, and your invoices, contracts, etc. reflect the actual entity that is involved in the transaction.

If you have any questions, please contact me.

How to Lose Profit Margin Without Even Trying!

The state and local tax complexity and opportunities that apply to the construction industry are created by the numerous jurisdictions (states, counties and cities) that come into play, the different roles (retailer, consumer, repairer or installer) a contractor can play, the different types of contracts (lump-sum, time and material, cost-plus and fixed price) that can be entered into, determining if the contractor is installing real or tangible property, determining if any exemptions apply and can be utilized, and in some states, determining which entity actually owns the land and who is the “prime contractor” or “general contractor.”

Each state, county or city has their own rules, different definitions of a “contractor,” different treatment of labor and materials, and different requirements to utilize exemptions.

Due to the complexity, it is very important to contact a knowledgeable state and local tax professional (me) during the “pursuit” stage of a real estate development project. How the project is structured, meaning how the entities involved will contract with each other, can save tax and increase profit margin. In addition, different categories of costs may be able to be segregated to improve their potential for deductibility, etc.

If a state and local tax professional is contacted too late in the process, contracts could already be written and opportunities could be missed.

Sales tax and gross receipts taxes hit the bottom line of every company and are considered a cost of doing business. Hence, focusing on these types of taxes can not only reduce tax exposure, but increase profit margin of a project and of a company. Therefore, before signing those contracts for the next project, contact me or some other knowledgeable state tax professional.

Who knows, you could be losing profit margin without even trying.

Wall Street Journal Reports (and Confirms): State Income Tax Revenues Down 26%!

Erica Alina at the Wall Street Journal reported today that state income tax revenues were down 26% for the first four months of 2009, compared to the same period last year, according to a survey of states by the nonprofit Nelson A. Rockefeller Institute of Government.

The article confirms and reiterates the messages I've communicated on past blog posts. The states are in trouble financially. Therefore, they have two options: raise taxes or cut services.

Like the article says, most states' fiscal years begin July 1st; therefore, budget changes and proposals are in process. Some states are proposing tax increases, and like Minnesota, some states are proposing cuts in services.

What would you prefer?

Click on the following link to access the Wall Street Journal article:

http://online.wsj.com/article/SB124527624327024867.html

Minnesota: Governor "Unallots" $2.7 Billion

Governor Pawlenty of Minnesota is proposing to cut the state's budget by $2.7 billion under the "unallotment" process.

According to the Minneapolis / St. Paul Business Journal, the unallotments include:

1. $1.8 billion in K-12 education payment deferrals and adjustments,
2. $300 million in cuts to local government aid and credits to cities and townships,
3. $236 million in cuts to human-services spending,
4. $169 million in cuts to administrative offices,
5. $100 million reduction of higher-education appropriations,
6. $67 million reduction of refunds and other payments and
7. $33 million in cuts to most state agency operating budgets.

Like some states, the Governor is attempting to balance the state's budget without raising taxes. Once the plan is final, the cuts would begin July 1, 2009.

For more details, click on the following link to access the Minneapolis / St. Paul Business Journal Article:

http://twincities.bizjournals.com/twincities/stories/2009/06/15/daily22.html

MAINE: Sales Tax Changes Enacted!

If you operate in Maine, you will want to know that the Governor has signed the tax reform bill (L.D. 1495). The bill makes several changes to sales tax rates, the sales tax base, and the taxation of leases and rentals. All of the sales tax provisions generally take effect on January 1, 2010, with some exceptions. Here are a few of the highlights:

Rate Increases/Changes:

1. For certain transactions involving food and liquor the sales tax rate increases from 7% to 8.5% on January 1, 2010.
2. For short-term vehicle rentals, the rate increases from 10% to 12.5% on October 1, 2009.
3. Rental of living quarters in a trailer camp becomes subject to sales tax at 7% beginning January 1, 2010.

Sales Tax Base Changes:

The definition of "taxable service" is expanded beginning January 1, 2010 to include:

1. Amusement, entertainment, and recreation services
2. Installation, repair and maintenance services
3. Transportation and courier services
4. Personal property services
5. Rental or lease of tangible personal property entered into, extended, or renewed on or after April 1, 2010.

Other Miscellaneous Changes/Guidance:

The bill also provides additional information regarding the computation of sales tax, sales tax exemptions affected by the above sales tax base changes, registration of sellers, and service provider tax amendments.

In addition, the bill revises or creates definitions for the following: "administrative support functions," "retail sale," "retirement facility," "and "use."

Click on the following link to access the entire bill:

http://www.mainelegislature.org/legis/bills/display_ps.asp?ld=1495&PID=1456&snum=124

If you have any questions or need further details, please contact me at leveragesalt@earthlink.net.

Update on the "State of the States"

I know I have mentioned this before, but I thought I would do a little recap of what is going on in the state tax world:

1. The "NEXUS WAR" - Taxpayers seem to be losing all across the country and the U.S. Supreme Court doesn't seem anxious to take any cases. Therefore, perhaps the "BAT" (Business Activity Tax) federal legislation is the only answer. All companies may want to consider a "preemptive strike" instead of playing the "wait-and-see game" regarding nexus. With economic nexus, vendor presumption nexus, agency nexus, most states are requiring less and less activity in a state to be considered to have a taxable presence. A preliminary review can determine your exposure, and determine if any steps can be taken to mitigate your exposure or defend your position.
2. States seem to be playing "copycat" in regards to the nexus rules and statute language they are enacting or proposing (i.e., doing business thresholds, economic nexus, etc.).
3. Penalties are the "NEW TAX" - as I have stated in previous blog posts, penalties for non-compliance are not only getting steeper, but increasing in number. After the "amnesty parade" is over, states may impose harsher penalties and less favorable voluntary disclosure agreement rules. Penalties for non-compliance may be more politically acceptable than raising taxes or broadening the tax base.
4. Experienced employees are leaving the State Department of Revenue offices, generally, due to the states' financial budget crisis. This may leave younger and/or less qualified employees in their place.
5. Certain states are closing down their courts a few days a month. This may make the court dockets that much longer. On the "flip-side," it may also make states more willing to settle.
6. "Combined Reporting" is spreading like "wild-fire" among the states. Combined Reporting is generally viewed as a revenue raiser which closes corporate tax loopholes. In reality, this is not always the case. The economic environment in which states are operating has made combined reporting legislation pass; whereas, in previous years, it was just proposed or discussed.

Just a brief summary/update. If you have any questions, please contact me at leveragesalt@earthlink.net.

Question: How do You Choose a State and Local Tax Consultant? Answer: It Depends!

Who do you call when you have a state and local tax issue, question or problem? How do you select that person or consultant?

Is your decision based on relationships? Have you known the person very long? Is your selection based on past experience with the consultant where they did a good job at a reasonable price (or just the opposite)? How do you know you are getting the best professional (for your situation), and the best service at the best price for you? How do you know who is right for you?

With state and local tax laws changing rapidly, small firms can't keep up without in-house state and local tax resources. Large firms have more resources, but may not have the right resource for you at the moment.

State and local tax professionals move from firm to firm (change jobs) quite a bit. How do you know if you are getting the best professional when you choose based on the firm, and not the individual? Does the firm's reputation mean more than the talent of the individual?

Large firms may be focused on the "big fish;" therefore, you may not get the service and attention you deserve.

NOTE: Firms, whether big or small, know they don't have the best state and local tax person in every state. Did they tell you that?

Are you really hiring "the firm" or "the person?"

Personal Thoughts:

Whatever your answers are to the above questions, personally, I want to make the state and local tax profession stronger, technically and ethically. I want clients to have a sound, reliable, technical resource. I want the state and local tax profession to be more personal, and less ego. I want a firm to treat people (clients and employees) like they treat profits. Truly listen and seek to understand.

Ohio: Revised Voluntary Disclosure Program for CAT

Ohio recently published an information release to explain Ohio's policy regarding voluntary disclosure agreements for the Commercial Activity Tax (CAT). Ohio's policy was previously issued in July 2008, but is revised as explained in the information release.

Ohio Voluntary Disclosure Programs

As you may know, Ohio offers voluntary disclosure programs for various taxes to allow taxpayers to come forward anonymously to comply with Ohio’s tax laws. By voluntarily disclosing their liabilities, taxpayers may avoid penalties for failing to file returns and for failing to pay liabilities timely.

CAT Voluntary Disclosure Program

According to the information release, Ohio now offers a voluntary disclosure program for CAT. A taxpayer is eligible for the CAT voluntary disclosure program if the taxpayer enters into and executes the CAT voluntary disclosure agreement (“VDA”) prior to any contact from Ohio through any audit, compliance, or criminal investigation programs. If a taxpayer desires to establish an agreement, the taxpayer must take the following steps:

First, the taxpayer or its representative shall send in writing the following information:

1. The taxpayer’s activities in Ohio;
2. How long such activities have been performed by the taxpayer in Ohio;
3. A brief description of the source of the taxable gross receipts (i.e., services, tangible personal property, etc.) and whether such amounts will be greater than one million dollars;
4. The taxpayer’s type of organization (LLC, C Corporation, sole-proprietor, etc.);
5. The taxpayer’s organizational structure including ownership percentages; and
6. Any additional pertinent information.

The letter should be sent to:

Ohio Department of Taxation, Commercial Activity Tax Division, Voluntary Disclosure Program, 30 E. Broad Street, 19th Floor, Columbus, Ohio 43215.

Upon receipt of that letter, Ohio will prepare a VDA in duplicate and will send the VDA to the taxpayer’s representative. Generally, each VDA will contain the following terms:

1. The taxpayer must register for the tax and file all applicable returns and pay all corresponding liabilities and interest for all periods covered by the VDA.
2. The Tax Commissioner shall waive penalties that may be associated with the failure to timely register and failure to file and pay timely.
3. The Tax Commissioner may audit the CAT returns filed by the taxpayer for the years covered by the VDA.
4. The taxpayer must then sign the VDA and send it back to the address above.
5. In the final step, the taxpayer must register for the tax and file all applicable returns and pay all corresponding liabilities and interest from the agreed start date through the present date.

For more details, click on the following link to access Ohio's Information Release (CAT 2008-01):

http://tax.ohio.gov/divisions/communications/information_releases/CAT/cat200801.stm

If you have any questions, please contact me at leveragesalt@earthlink.net.

Michigan Amended Return (REFUND) Opportunity: Single Member LLCs, Revenue Administrative Bulletins and SBT

The Michigan Court of Appeals recently affirmed a Tax Tribunal decision holding that a single-member limited liability company (SMLLC) treated as a disregarded entity for federal tax purposes was not required to file a Single Business Tax (SBT) return as a division of its owner (Kmart Michigan Property Services, LLC v. Department of Treasury No. 282058 (May 12, 2009).

Brief Summary of Case

Now, you may or may not have heard about this decision. The issue was whether a SMLLC was required to file as a division of its owner (causing the owner to file a SBT return), or if it could file a SBT return on its own. The Court of Appeals held that the SMLLC was a "person" subject to the SBT and could file or was required to file a separate return.

SBT AMENDED RETURN (REFUND) OPPORTUNITY

As you may know, the SBT no longer exists. It was replaced with the MBT (Michigan Business Tax). However, as long as the statute of limitations are still open, you could amend your Michigan returns and file separate returns for your SMLLCs if it would be beneficial for you to do so (meaning, refunds).

Major Points From Case

Some of the major points in the case (I think) were:

1. Michigan Revenue Administrative Bulletins deserve due deference from the courts, but are not binding legal authority, particularly if they contravene the applicable statute.
2. The Tribunal stated that the taxpayer's federal tax status was not determinative of whether it satisfied the definition of "person" under the SBT, because the SBT filing requirements are independent of the federal tax code and existed "long before the federal 'check-the-box' regulations" permitting a taxpayer to choose its entity status.
3. Because the Department of Treasury (DOT) has legal responsibility to collect taxes and is responsible for specialized service for tax enforcement, through establishment and maintenance of uniformity in definition regulation, return, and payment, the Court respected the Department's position. However, "the agency's interpretation is not binding on the courts, and it cannot conflict with the Legislature's intent as expressed in the language of the statute at issue."
4. The DOT issued RAB 1999-9 requiring SMLLCs to file as a division of its owner (if the SMLLC chose that classification for federal tax purposes).
5. DOT Bulletins are considered "interpretative statements." Therefore, taxpayers are not legally required to follow them (in other words, the bulletins can or should be followed in cases where they are not in conflict with legislative intent).

CONCLUSION (AMENDED RETURN OPPORTUNITY / Advice for Future RABs)

1. Amended return opportunities exist for single member limited liability companies who did not file separate SBT returns.
2. Do not simply follow Michigan Revenue Administrative Bulletins (RABs) guidance without confirming they are in agreement with legislative intent.

If you have any questions regarding how this applies to your situation, please contact me at leveragesalt@earthlink.net.

New Jersey: Voluntary Disclosure Program Changes (Post 2009 Tax Amnesty Program)

According to the New Jersey Division of Taxation, Voluntary Disclosure Agreements (VDAs) that were negotiated prior to May 4, 2009 will be honored as long as they are fully executed by June 15, 2009 (NEXT MONDAY!). After June 15, 2009, the agreements will be considered null and void and subject to the following new terms and conditions:

Here Comes the Pain

If you didn't take advantage of the Amnesty program or fully execute your Voluntary Disclosure Agreement (VDA) prior to June 15, 2009, there are some major changes (or penalties) you will want to be aware of.

After June 15, 2009, by coming forward via a VDA prior to being contacted by New Jersey, taxpayers will still receive some benefits, with the following changes:

1. The general look-back period under a VDA will no longer be four (4) years (three prior years and the current year), but will be seven (7) years (6 prior years and the current year).
2. To be eligible for the VDA, there must have been no previous contact with New Jersey or any of its Agents, and the taxpayer must be willing to pay all outstanding tax liabilities that are included in the VDA, and file the prior year returns within a reasonable period of time (within 60 days).
3. No deferred payment plans will be permitted.
4. The Voluntary Disclosure Program is NOT available to: resident taxpayers for Gross Income Tax purposes, taxpayers who are registered for the taxes they wish to come forward on, any taxpayer currently under any criminal investigation, any taxpayer who has received a nexus survey or has otherwise been contacted regarding their activities in New Jersey.
5. The unabateable penalty of 5% will be imposed for failure to take advantage of the Amnesty Program ending on June 15, 2009.
6. In addition, the 5% late payment penalty will be imposed in all instances.
7. Statutory interest will be assessed and calculated at the prime rate plus three percent for the tax returns and periods under the agreement.

What Taxes Are Eligible for the Voluntary Disclosure Program (Post June 15, 2009)?

All taxes administered by the New Jersey DOT are eligible for the program, but the most common include Corporation, Sales/Use, Litter, Personal Income and Withholding taxes.

Benefit of Voluntary Disclosure Program?

In exchange for entering into a VDA, New Jersey agrees to waive late filing penalties and criminal penalties relating to the tax returns and periods under the agreement.

Click on the following to access the New Jersey Notice:

http://www.state.nj.us/treasury/taxation/voldisc.shtml

Questions?

If you have any questions, please contact me at leveragesalt@earthlink.net.

Wisconsin: Sales Tax Amnesty Begins July 1, 2009 (Buyer Beware)

According to Wisconsin's Sales and Use Tax Report 02-09, Wisconsin will be offering a sales tax amnesty program to all businesses that are not currently registered to collect Wisconsin sales tax, if certain eligibility requirements are met.

Amnesty Period

The Wisconsin amnesty period will begin July 1, 2009, the date Wisconsin becomes an associate member of the Streamlined Sales Tax Governing Board (SSTGB), and will end September 30, 2010.

Benefits of Amnesty

If you meet the eligibility requirements and register as described in the report, you will not be liable for any Wisconsin sales tax on sales you made prior to your registration.

Eligibility Requirements

You are eligible for the Wisconsin sales tax amnesty program, unless one or more of the following criteria apply to you:

1. You are currently registered to collect Wisconsin sales tax;
2. You were registered to collect Wisconsin sales tax at any time during the previous 12 months;
3. You have received a notice of the commencement of an audit, unless that audit is fully resolved, including any related administrative or judicial processes (i.e., appeals); or
4. You have committed or been involved in a fraudulent act or an intentional is representation of a material fact.

"BUYER BEWARE"

The sales tax amnesty program does not apply to (1) any Wisconsin taxes that you owe in your capacity as a purchaser (i.e., use tax due on purchases you made) or (2) any Wisconsin sales taxes that you have previously collected from your customers, regardless of whether or not you have remitted those taxes to Wisconsin.)

To participate in the Wisconsin sales tax amnesty program, a business must:

1. Register between July 1, 2009 and September 30, 2010 to collect sales tax for Wisconsin and all of the other SSUTA member states using the Streamlined Sales Tax Central Registration System which is available at: https://www.sstregister.org/sellers/Entry.aspx; and
2. Agree to collect and remit sales tax to Wisconsin and all of the other SSUTA member states (including those states that join the SSUTA after you register) for at least 36 months after the date of registration.

For more details, click on the following link to access Wisconsin's Sales and Use Tax Report 02-09:

http://www.revenue.wi.gov/ise/sales/09-2.pdf

If you have any questions, please contact me at leveragesalt@earthlink.net.

Massachusetts FAS 109 Deduction: Filing Due by July 1st!

Massachusetts recently released technical guidance on how publicly traded companies can claim a FAS 109 Deduction. Action is required before July 1, 2009.

Who is Eligible?

According to the technical guidance, only publicly traded companies, including affiliated corporations participating in the filing of a publicly traded company’s financial statements prepared in accordance with GAAP, as of July 3, 2008, are eligible for the FAS 109 deduction. The term “publicly traded company” means a company whose stock is publicly traded; a privately held company that issues publicly traded debt is not eligible for the FAS 109 deduction.

Electronic Filing Requirement Before July 1, 2009

To state the amount of the FAS 109 deduction to be claimed in future years, the principal reporting corporation must file electronically with the Department on or before July 1, 2009 using the web-based application at www.mass.gov/dor. It is anticipated that the Department’s web-based application will be ready to accept FAS 109 electronic filings on June 1, 2009 or soon thereafter.

How is the Deduction Amount Determined?

According to the technical guidance, the FAS 109 deduction amount is determined from the information furnished by the principal reporting corporation in its electronic filing, including the following aggregate amounts for the combined group:

1. Deferred Massachusetts tax liability of the combined group on July 3, 2008 without application of the provisions of the Act
2. Deferred Massachusetts tax liability on July 3, 2008 after application of combined reporting for Massachusetts
3. Deferred tax assets on July 3, 2008 without application of the provisions of the Act
4. Deferred tax assets on July 3, 2008 after application of combined reporting for Massachusetts
5. Deferred Massachusetts tax liability on July 3, 2008 after application of ALL provisions of the Act
6. Deferred tax assets on July 3, 2008 after application of ALL provisions of the Act
7. Amount of tentative deduction calculated to offset the increase in net deferred tax liability
8. Adjusted book basis of eligible assets of all non-taxable members on July 3, 2008
9. Tax basis of eligible assets of all non-taxable members on July 3, 2008

Amendment to Increase Deduction Amount Not Allowed

A taxpayer is not permitted to amend the electronic FAS 109 filing after July 1, 2009 in order to state a higher deduction amount. However, if a taxpayer obtains additional information that would lower the FAS 109 deduction amount, the taxpayer is required to amend its FAS 109 filing to state the lower deduction amount.

FOR ALL OF THE DETAILS

Click on the following link to access Massachusetts Technical Information Release on claiming the FAS 109 Deduction (TIR 09-8):

http://www.mass.gov/?pageID=dorterminal&L=7&L0=Home&L1=Businesses&L2=Help+%26+Resources&L3=Legal+Library&L4=Technical+Information+Releases&L5=TIRs+-+By+Year(s)&L6=2009+Releases&sid=Ador&b=terminalcontent&f=dor_rul_reg_tir_tir_09_8&csid=Ador

If you have any questions, please contact me at leveragesalt@earthlink.net.

Vermont: AMNESTY is Coming!

Vermont joins the AMNESTY party. What do I mean? I mean the Vermont legislature has passed the Fiscal Year 2010 Appropriations Act (H.B. 441, Laws 2009, effective June 2, 2009, unless otherwise noted).

The act makes several changes involving the cigarette and tobacco products tax, the education property tax, homestead declarations, property tax exemption, transferring abandoned property to satisfy tax liability, and the estate tax.

Amnesty Program (sometime prior to October 2, 2009)

However, the main change I want to mention is in regards to amnesty. Under the act, the state tax commissioner must hold a six-week amnesty program prior to October 2, 2009.

Benefits of Program?

All penalties will be waived without requiring the taxpayer to show reasonable cause or the absence of willful neglect as long as the taxpayer files all returns and pays all taxes and interest due.

What Tax Types Does the Program Apply to?

According to the act, the program will apply to any tax for any period for which the due date of the return was before January 26, 2009.

Despite the broad application, there are some exceptions regarding penalties, fuel taxes and local option portions of taxes.

Interpretation and Application

If you have back tax liabilities in Vermont and haven't taken care of them yet. Take the time to get that information in order so you are prepared when the amnesty is put into effect. Also, this may be a good time to determine if amnesty will be the correct avenue to utilize to resolve those back taxes.

If you have any questions, please contact me at leveragesalt@earthlink.net.

Kansas Enacts Several Changes Affecting Statute of Limitations and Refunds

Taxpayers operating in Kansas need to be aware of several major changes recently signed into law by the Governor on May 22, 2009 (H.B. 2365).

1. The sales and use tax statute of limitations were shortened to one year from three years. The change applies to claims filed after June 15, 2009.
2. The income tax refund period is now limited to three years from the extended return due date.
3. Taxpayers are no longer allowed to claim a refund of tax within two years from when the tax was paid in, when the taxpayer hasn't filed returns.
4. The statute of limitations are tolled where a taxpayer fails to file an amended return within 180 days to report changes in Kansas income as a result of a final federal or other state adjustment.
5. The secretary now has the authority to resolve certain assessments pending in the administrative appeals process, state court of tax appeals, or in judicial review before any state or federal district or appellate court in an equitable manner. The authority also includes the ability to resolve the amount of tax, penalty, or interest due in the settlement agreement.

If you have any questions regarding these changes, please contact me at leveragesalt@earthlink.net.

States Are Pursuing Revenue, Are they Pursuing You?

CFO.com recently published an article entitled, "The Tax Men Cometh." The article discussed how states are stepping up their pursuit of corporate taxes because they are experiencing deep financial budget shortfalls.

The article focused on how states are planning to raise additional revenue from tax audits, and contacting companies who they believe to have established "nexus" in their state. "Nexus" is basically being considered to have a taxable presence in a state.

As the article states, I agree, it is getting more difficult to side-step nexus, since more states are considering companies to have nexus without having a physical presence in the state. You may have heard the terms, "economic nexus" or "Amazon nexus." Those are two of the most recent tools or weapons the states are using to collect additional revenue from out-of-state companies.

As I stated many times on this blog, the article also confirms that states are utilizing combined reporting or "unitary" rules to pull more companies into the reporting group filing a return within their state. Obviously, this is done with the hope that it will increase the state's revenue.

Conclusion

It is no secret states are hurting financially. They are looking for revenue anywhere they can find it, but also trying not to raise taxes (at least obviously raising taxes). They are short on resources and looking for the easiest or best ways to increase their revenue (just like any business is doing). Therefore, look for increased audit activity, nexus questionnaires, notices for filing late, or notices charging additional penalties or interest. Also, look for states to be less negotiable when trying to get penalties waived.

With that said, most companies' tax departments are short staffed as well, trying to do too much with too little. Focused on compliance or the "necessary evils" that must get done, tax departments may have trouble keeping up with the daily changes in the state tax world.

Question: What are you or your clients struggling with?

1. Increased audit activity?
2. Notices?
3. Nexus issues (Amazon nexus, Economic nexus)?
4. Penalties?
5. Unitary or Combined reporting?
6. Apportionment issues?
7. Business versus Nonbusiness Income?
8. Something else?

Please post a comment to answer this question or e-mail me at leveragesalt@earthlink.net. I would love to get your feedback. Thanks.

Maine: 2009 Tax Receivables Reduction Initiative (AMNESTY)

Maine has enacted a version of tax amnesty entitled, the "2009 Tax Receivables Reduction Initiative." Now, just like all amnesty programs, this is one of those programs where you want to "look before you leap." Meaning, there are benefits to the program, but there is also a takeaway or "sacrifice" for participating.

Benefits of Participating in Program

Qualifying taxpayers will receive a waiver of 90% of penalties otherwise due on taxes assessed as of September 1, 2009.

SACRIFICE for Participating in Program

Participation in the program is conditioned upon agreeing to forgo or to withdraw any protest with regard to liabilities paid under the program.

In addition, the taxpayer may not claim a refund of money paid under the program.

How to Qualify for Program

1. Properly complete and file a 2009 tax initiative application
2. Pay all tax, interest and penalties

Time Frame for Filing

A 2009 tax initiative application may be filed from September 1, 2009 to November 30, 2009.

As always, it is wise to consider all of the facts of your particular situation before taking advantage of any state amnesty program. If you have any questions, please contact me at leveragesalt@earthlink.net.

To obtain a copy of HP 274, CLICK on the following link:

http://www.mainelegislature.org/legis/bills/display_ps.asp?ld=353&PID=1456&snum=124

Ch. 213, (H.P. 274), Laws 2009, effective May 28, 2009

Hawaii: "Tax Fresh Start Program" (AMNESTY)

Hawaii announced last week their own version of tax amnesty, the "Tax Fresh Start Program." The program runs from May 27, 2009 through June 26, 2009.

The program allows eligible taxpayers to pay 'back taxes' while avoiding penalties and potentially avoiding referral for criminal prosecution. In addition, the program offers a 50% reduction in interest (from 8% to 4%).

The program is available to all eligible taxpayers owing eligible Hawaii taxes for any taxable period ending on or before December 31, 2007, either because the taxpayer:

1. failed to file a return for the taxable period, or
2. previously filed a return for the taxable period, but underreported the amount of tax due

The program covers all taxes that are administered by the Hawaii Department of Taxation (DOT), including the general excise tax, income tax, and transient accommodations tax, among others.

Not Eligible for Program

The program may not be used for tax liabilities that are already know to the DOT. Taxpayers already in a payment plan with DOT or who have received a tax bill from DOT cannot participate in the program for the tax liability that is the subject of that bill. The taxpayer, may, however, report additional liability for that tax period as an under-reporter under the Tax Fresh Start Program.

A taxpayer is ineligible for participation in the program if any of following applies:

1. The taxpayer is currently under audit by DOT;
2. The taxpayer is currently under criminal investigation;
3. The taxpayer is a party to any civil or criminal litigation that is pending on May 27, 2009 with DOT;
4. The taxpayer is currently in DOT's collection program;
5. The taxpayer has been contacted by DOT concerning a return for any
   reason, including a return that has not been filed or an apparent
   understatement of income;
6. The taxpayer is under audit by the federal government or has been
   notified of such an examination; or
7. The taxpayer has been criminally prosecuted by the criminal
   investigations unit, or who is currently under court jurisdiction.

If a taxpayer is not eligible for the Tax Fresh Start Program for a particular Hawaii tax or for a particular taxable period, the taxpayer may still be eligible to apply for participation in the program for a different Hawaii tax or for a different taxable period.

If you have a question about eligible taxes, visit the website www.hawaii.gov/tax for a comprehensive list.

Specific Requirements When Filing

In addition to determining if you are eligible, there are specific requirements to follow when filing the required returns under the Tax Fresh Start Program.

Click on the following link to access the Hawaii News Release and learn about the Requirements:

http://hawaii.gov/tax/media/2009-05-27-freshstart.pdf

OTHER IMPORTANT FACTORS TO CONSIDER:

• Under the program, taxpayers relinquish any and all administrative and judicial rights of appeal.
• Hawaii is actively pursuing non-filers and underreporters.
• There is no civil statute of limitations on auditing or assessing non-filers.
• There is also no civil statute of limitations on auditing or assessing underreporters where tax fraud is involved.

If you have any questions regarding this program please contact me at leveragesalt@earthlink.net.