Tis the Season to be Thankful!
Most of you who visit our blog are looking for insightful articles on State Tax matters. And I hope you agree that we generally deliver in that regard. But today, as this Thanksgiving week begins, I’m taking a moment to reflect on the many things I’m thankful for in my life and I wanted to share them in this space. We can probably agree that there’s currently not enough gratitude and true thankfulness in the world, and I think we need to get back to some of the basics – saying please and thank you (and meaning it), opening doors for each other (actual doors as well as those related to opportunities for others), treasuring our families (even when they don’t agree with our every belief), and opening our hearts and homes to those who are less fortunate – including our four legged friends!
FOCUS ON NORTH CAROLINA
The Tar Heel State is a southeastern U.S. state with a landscape ranging from Atlantic Ocean beaches to the Appalachian Mountains. Charlotte, the state’s largest city, is home to the NFL’s Carolina Panthers and museums, such as the NASCAR Hall of Fame. The state motto (“First in Flight”) honors the Wright Brothers, who flew their first plane in Kitty Hawk on the Outer Banks.
North Carolina provides a large range of recreational activities, from swimming at the beach to skiing in the mountains. North Carolina also offers everything from theme parks to lighthouses.
Business Climate
North Carolina is the leading U.S. state in the production of flue-cured tobacco and sweet potatoes, and second in the farming of pigs and hogs, trout and turkeys. In the three most recent USDA surveys, North Carolina also ranked second in the production of Christmas trees.
Important State Tax Measures to Watch on Election Day
Happy Election Day! I hope everyone was able to make it out to the polls or mail in their ballots for today’s midterm elections.
While we wait to see the results later today, I wanted to take a look at a few noteworthy state tax measures, initiatives, amendments and proposals across the country.
Carbon State Tax Initiative: Washington
Washington’s Initiative 1631 would impose a tax on carbon emissions from companies that either sell or use fossil fuels; it would be the first of its kind across the country.
What would this new state tax cost companies? The Tax Policy Center explains, “The proposed rate is $15 per metric ton of carbon emissions beginning in 2020 with $2 annual increases until the state meets its emissions target.” The Tax Foundation specifies the target as, “Reducing overall emissions to 25 percent below 1990 levels by 2035, and by 50 percent below 1990 levels (or 70 percent below the state’s expected emissions for that year) by 2050.”Read more
Update to Texas Jumping on the Economic Nexus Bandwagon!
Earlier this year, the Supreme Court handed down its landmark decision in South Dakota v. Wayfair Inc., which made it easier for companies to create nexus in states. In turn, this made it easier for states to collect revenue from companies doing business in these states.
In a previous blog, we reported that Texas is making plans to join many other states by jumping on board the economic nexus bandwagon. The Texas comptroller recently unveiled plans to move this legislation forward.
The New Legislation in Texas
Even though Texas has been moving cautiously in the move toward economic nexus, it is moving a little bit closer. Texas, one of the largest states and popular states for companies to do business in, has finally made plans to enact economic nexus legislation.
States' Reactions to Online Sales Tax: What You Need to Know
If you’ve been following the Wayfair case, you know the Supreme Court upheld South Dakota’s online sales tax legislation (related to economic nexus), creating precedent for other states to create and implement similar measures. But, as we explained in our last blog post, this doesn’t automatically mean all 50 states are charging taxes on internet purchases.
Which states are now collecting online sales tax, and how does this new ruling affect residents in states without sales tax? Keep reading to find out how some states are reacting to the Supreme Court’s ruling.
More States Begin Collecting Online Sales Tax
It’s not surprising that states are scrambling to create internet sales tax legislation to increase revenue as quickly as possible. As of October 1st, ten states joined the ranks of those requiring collection of sales tax if certain economic nexus thresholds are met:
- Alabama
- Illinois
- Indiana
- Kentucky
- Michigan
- Minnesota
- New Jersey
- North Dakota
- Washington
- Wisconsin
North Carolina, Connecticut, Georgia, Iola, Louisiana, Nebraska and Utah have legislation in place to require sellers to begin collecting taxes in the coming months, too.Read more
THE WAYFAIR CASE CONTINUES TO MAKE HEADLINES
It’s been over three months since the Supreme Court handed down its landmark decision in South Dakota v. Wayfair Inc., which made it easier for companies to create nexus in states. In turn, this made it easier for states to collect sales tax revenue from companies doing business in the state.
The Supreme Court’s ruling did not automatically make this the law of the land for all 50 states. The high court’s decision was that South Dakota’s economic nexus law was constitutional. Since this ruling, states have been jumping on the economic nexus bandwagon by enacting similar legislation. As we describe in a recent blog, economic nexus is based upon the amount of sales or number of transactions in the state. If a certain threshold is met, nexus is deemed to be created.
FOCUS ON KANSAS
This month brings us to the center of the country, the Great Plains state of Kansas. Kansas is a Midwestern state that epitomizes the U.S. Heartland with its Great Plains setting of rolling wheat fields. The Museum of World Treasures in Wichita, the state’s largest city, covers world history from dinosaurs to Elvis, while the open-air Old Cowtown Museum highlights the city’s pioneer past. In nearby Hutchinson, the Cosmosphere displays the Russian Vostok and Apollo 13 spacecrafts.
For thousands of years, what is now Kansas was home to numerous and diverse Native American tribes. Tribes in the eastern part of the state generally lived in villages along the river valleys. Tribes in the western part of the state were semi-nomadic and hunted large herds of bison.
Congress' New Online Sales Tax Bill: What You Need to Know
As we wrote a couple of weeks ago, the online sales tax debate is far from over. Although the Supreme Court ruled that states can impose an internet sales tax, Congress can still legislate on the issue. And it looks like it will. Representatives introduced a bill designed to guide sales tax collection requirements for businesses selling across state lines.
About the Online Sales Tax Bill
Introduced by a bipartisan group of House Representatives, the Online Sales Simplicity and Small Business Relief Act was created to provide clarity amidst the confusing aftermath of the Wayfair decision.
As U.S. Representative Sensenbrenner explained in a statement, “This bipartisan legislation reins in the taxation free-for-all created by the Supreme Court’s ruling…online sellers need clarity and stability in the sales tax arena. Our bill will protect small businesses and internet entrepreneurs from excessive regulatory burdens.”Read more
The Crazy Tax Laws Regarding Food!
We write a lot of blogs! We’ve been writing a lot of blogs about the recent U.S. Supreme Court decision in South Dakota v. Wayfair and how companies selling goods online will be subject to much more compliance in upcoming months and years. But today, we decided to change it up and talk about something near and dear to everyone- food!
In most states throughout the country, consumers shopping at a supermarket don’t pay state sales tax on their bread and butter, but would pay sales taxes on a hot prepared turkey dinner. If they pick up a Hershey’s bar in the checkout line, is likely to be taxed, but if they pick up a Twix bar instead, it might be be exempt.
What Are The Next Steps Regarding Internet Sales Tax?
It's been a few months since the Supreme Court's Wayfair v. South Dakota decision made it possible for states to begin imposing an internet sales tax, but there are still a lot of questions swirling around - especially for small businesses owners.
U.S. House Judiciary Committee Hearing: Internet Sales Tax
Digital Commerce 360 reports that following the Court's decision the U.S. House Judiciary Committee heard testimony, "Spanning the spectrum of opinion on the potential fallout of the U.S. Supreme Court’s decision regarding online sales tax." Eight citizens from a range of backgrounds provided expert insight on how the Wayfair decision would impact states and businesses across the country.
Ultimately, the testimony encouraged Congress to develop internet sales tax legislation to provide clarity as retailers attempt to figure out how to comply with each states' various tax laws.
While Congress struggles to come to a consensus on what this type of law would look like, states are enacting their own online sales tax laws. This leaves business owners scrambling as they try to figure out what to do.Read more
