Keep up with the latest state and local tax developments by reading our SALT Alerts. They are labeled by state so that you can easily find the ones that apply to you. The following are the most recent alerts:
Arkansas sunsets InvestArk Incentive Program; Provides exemption to manufacturers for repair and replacement parts
Arkansas has enacted legislation that is intended to simplify the taxation of in-state manufacturers by phasing out the InvestArk investment incentive program and enacting a sales and use tax exemption for the purchase of repair and partial replacement of manufacturing machinery and equipment. Effective July 1, 2017, Arkansas will no longer accept new InvestArk applications, but credits based on applications approved prior to this deadline will remain in effect.
District of Columbia Enacts New Payroll Tax to Fund Paid-Leave System
On February 17, 2017, the District of Columbia enacted the Universal Paid Leave Amendment Act of 2016 (UPLAA), which will impose a 0.62 % payroll tax on employers to fund a paid-leave system for individuals employed in the District. While the tax will not have to be paid by employers until July 1, 2019, the passage of the UPLAA is a significant development that will need to be considered by businesses that employ personnel in the District, both from a financial and administrative perspective.
Future of Illinois hospital property tax exemption remains uncertain
On March 23, 2017, in Carle Foundation v. Cunningham Township, the Illinois Supreme Court declined to consider the constitutionality of the Illinois property tax exemption for hospitals. The Illinois Fourth District Appellate Court previously held that the hospital property tax exemption was unconstitutional, but the Illinois Supreme Court vacated this decision on the grounds that the Appellate Court lacked jurisdiction and remanded the case to the trial court for further proceedings.
Indiana Enacts Bright-Line Sales Tax Nexus Law for Remote Sellers
On April 28, 2017, Indiana Gov. Eric Holcomb signed legislation that requires certain remote sellers that do not have a physical presence in Indiana to collect sales tax on sales made in the state. The collection and remittance duties are triggered if certain gross revenue or transaction thresholds are met. This legislation is similar to the legislation enacted by South Dakota last year and other states earlier this year.
Iowa Supreme Court rejects inclusion of parent company in consolidated report
On March 24, 2017, the Iowa Supreme Court affirmed a District Court decision that a group’s parent company could not be included with its subsidiaries in an Iowa consolidated income tax return because the parent did not receive taxable Iowa income. Rather, the parent’s activities in Iowa consisted of owning and controlling the subsidiaries, and this activity does not establish a taxable nexus with Iowa.
Minnesota Tax Court affirms financial institution’s apportionment planning by denying commissioner’s alternative method
On April 18, 2017, the Minnesota Tax Court overturned the Minnesota Commissioner of Revenue’s alternative apportionment order and affirmed a financial institution’s treatment of captive partnerships as non-financial institutions for apportionment purposes for the 2007 and 2008 tax years. The commissioner did not meet the burden of proof necessary to apply an alternative apportionment method because she failed to show that the standard apportionment formula did not fairly and correctly apportion the taxpayer’s income to Minnesota.
Pennsylvania Tax Amnesty Program Runs Through June 19, 2017
On April 21, 2017, the Pennsylvania Department of Revenue launched its Tax Amnesty Program, which will run through June 19, 2017. Legislation enacted last year authorized the department to establish the program to run for a 60-day period ending on or before June 30, 2017. The program applies to all Pennsylvania taxes administered by the department for which a known or unknown tax delinquency exists as of Dec. 31, 2015. The department will waive all penalties and 50 percent of the interest due for those taxpayers meeting all program requirements.
Tennessee Chancery Court Issues Order Suspending Rule Requiring Certain Remote Sellers to Collect Sales Tax
On April 10, 2017, a Tennessee chancery court granted an order arising from a joint motion by the Tennessee Department of Revenue and two parties representing impacted businesses, prohibiting enforcement of a rule that would require out-of-state dealers with annual Tennessee sales greater than $500,000 to register with the department and remit sales and use tax.
Texas Supreme Court holds property owners may protest select tax accounts instead of entire property
The Texas Supreme Court has held that a taxpayer’s complaint for unequal property assessment may be limited to select accounts, rather than the entire real estate tract, reversing a Court of Appeals ruling. This decision allows property owners to protest separate components of their property even if they are all part of the same facility (land and improvements).
Utah enacts changes to state tax incentive programs, including new credits
During March 2017, Utah enacted several laws amending the state tax incentive programs that are intended to encourage rural job creation, expansion of corporate charitable contributions and economic development of particular renewable energy industries. The legislation specifically targets job creation by enacting income tax credits for investment in eligible small businesses in rural areas.