Nonprofit Spotlight: September – The Spark Program

The past year has really taught us that we have so much to be grateful for. Each month we will be highlighting a nonprofit or charity that we encourage you to look into for potential donor opportunities. Every little bit counts, and we are trying to do our part to make the world a better place. This month we chose the Spark Program.

Nonprofit Spotlight: July – Northern Illinois Food Bank

The past year has really taught us that we have so much to be grateful for. Each month we will be highlighting a nonprofit or charity that we encourage you to look into for potential donor opportunities. Every little bit counts, and we are trying to do our part to make the world a better place. This month we chose the Solve Hunger Today.

Missouri Passed New Economic Nexus Legislation

SB 153 and 97 were signed into law today by Governor Mike Parson making Missouri the final sales tax collecting state to implement an economic nexus law after the South Dakota v. Wayfair  Supreme Court decision in 2018.  The new economic nexus legislation will become effective on January 1, 2023 and will require vendors selling over $100,000 annually to Missouri customers to register and collect use tax.

Let Us Help You with Your Tax Technology Solutions!

Let Us Help You with Your Tax Technology Solutions!

Many companies are seeking ways to reduce compliance costs by automating sales and use tax processes. Whether you decide to implement a more robust tax decision module and rate engine, or prefer a simpler solution, we are here to help with over 10 years of experience in Avalara Implementations.

Indiana Executive Orders 20-03 through 21-13 will be rescinded as of June 30, 2021.

Executive Orders 20-03 through 21-13 (regarding personal income and sales and use taxes) that were enacted in Indiana during the COVID-19 pandemic will be rescinded as of June 30, 2021.

An employee working from home in Indiana due to the result of a federal, state, or local governmental work from home declaration will again create Nexus in the state beginning on July 1, 2021.  The only accommodation that will allow an employee to work in Indiana without creating nexus is a physician’s order stating that the employee is unable to work in an office environment.  The order must be put in place prior to June 30, 2021 and must not yet have expired.

Additionally, manufacturers making donations of medicine, medical supplies, or other eligible items to fight the COVID-19 pandemic in Indiana will no longer be granted waivers for use tax obligations.

Happy 19th Anniversary Thompson Tax!

We are so honored to have been serving our clients for nineteen years! To celebrate this milestone, we all took the day off to relax, refresh and reflect on the almost 2 decades of being in business. We are honored to continue to serve our amazing clients and thank you for your continued support. Also, a big thanks to our wonderful team! We couldn’t do this without you.

New Florida Law Requires Sales and Use Tax Collection on Remote Sales

Florida was one of last states which did not have a collection requirement for out-of-state sellers.  This has now changed. Effective July 1, 2021, businesses making at least $100,000 of remote sales into Florida during the previous calendar year must register and collect sales and use tax, including any applicable discretionary sales surtax.  Businesses are given a 90 day grace period and must register by September 30, 2021 to avoid penalties on previous remote sales and use taxes due.

Join us at IPT Sales Tax School in Atlanta June 6-11

Join Dan Thompson, CPA, CMI in Atlanta from June 6th to June 11th where he is presenting at Georgia Tech during the 2021 Institute of Professionals in Taxation (IPT) Sales Tax School II.  Many sales and use tax topics will be discussed and breakout sessions will be available.

  • Constitutional Law • Computer Software & Services • Telecommunications • Leasing • Audit Management • Taxpayer Remedies • Statistical and Block Sampling • Mergers & Acquisitions • Retail • Taxation of E-Commerce • Manufacturing • Construction Contracting • Tax Planning • Managing the Sales & Use Tax Function • Oil and Gas • Ethics in Taxation

Dan has been a proud member of the IPT since 1990.  For IPT Sales Tax II enrollment information, please click here.

Pennsylvania Voluntary Disclosure Program

The Pennsylvania Department of Revenue is currently administering a voluntary compliance program that is open until May 8, 2021.  Unlike the Department’s standard Voluntary Disclosure Program which has a lookback period of the current year plus the previous 3 years for sales and use taxes, the lookback period for this program will not extend earlier than January 1, 2019.  Any business that has inventory or stores property in Pennsylvania, and who is not already registered to collect and pay Pennsylvania taxes, may complete the online business activities questionnaire to determine eligibility.  Once submitted, the Pennsylvania Department of Revenue will complete a review of the business and will respond with details on how to proceed.

Key Notes:

  • Non-compliance penalties, past-due returns, and unpaid sales and use taxes owed prior to January 1, 2019 for eligible (or qualifying) businesses with be waived once in compliance
  • Any abatements received are conditional upon maintaining compliance

California Tax Returns

California Tax Returns due between December 15, 2020, and April 30, 2021, for taxpayers reporting less than $1 million in tax on a return, will be extended three months from the original due date.  If you have a return that was originally due during this time frame, relief will be provided automatically and you are not required to seek an extension from the CDTFA.

Chicago Nexus

The City of Chicago’s economic nexus threshold, includes a Safe Harbor provision for small businesses. The Safe Harbor Provision, as it relates to the economic threshold, protects entities from creating nexus provided that they have no significant contacts within the City such as:

  • Employees within the City of Chicago or any activities being performed by employees or agents within Chicago on the entity’s behalf
  • Agreements with other businesses in Chicago
  • A physical presence in Chicago
  • Advertising directed at Chicago customers

If an out-of-state entity has no contact with Chicago other than sales, which when combined over the last four quarters have not exceeded the City’s economic nexus threshold of at least $100,000 in sales or more than 200 sales transactions, it is protected by the Safe Harbor provision and will not be expected to collect Chicago’s Home Rule personal property lease transaction tax (as applied to nonpossessory computer leases) or the Chicago amusement tax (as applied to amusements that are delivered electronically) e.g. online gaming and streaming.

Effective July 1, 2021, Safe Harbor rules will be applied on a prospective basis. No refunds or credits will be granted for taxes paid or remitted before that date. Please note: The Safe Harbor Provision does not affect the issue of whether a customer must pay taxes, only whether an entity has the duty to collect.

If an out-of-state entity qualified in the past, but no longer qualifies under Safe Harbor provision, it must:

  • Register with the City’s Department of Finance within 60 days
  • Begin collecting taxes within 90 days
  • Continue collecting taxes for at least twelve months

 

Michigan Penalty and Interest Waiver

If your business was affected by the December 7, 2020 Health and Human Services order prohibiting gatherings, then the Michigan Department of Treasury is waiving penalty and interest for any sales, use, or withholding tax paid after the January 20th due date.  Eligible taxpayers must report and pay the tax due no later than February 2, 2021 to take advantage of the waiver.

Waiver applies to:

  • 2020 4th quarter returns
  • Returns and payments due on January 20, 2021

Leveling The Playing Field – Illinois Tax News

In an effort to “Level the Playing Field” between In-State and Remote Retailers, beginning January 1, 2021, Remote Retailers and Marketplace Facilitators will be subject to the collection of Illinois Retailers Occupation Tax (ROT) on sales of tangible personal property when meeting certain thresholds.

Under these new changes, remote sellers that make 100% of their sales into Illinois through a Marketplace Facilitator will not be considered the retailer for tax assessment purposes.  Instead, the Marketplace Facilitator will be considered the retailer and incur ROT at the purchaser’s location (destination rate).

Marketplace Facilitator sales will be assessed according to the three factors outlined below:

  • Sales made within Illinois will be assessed ROT according to the location of the sales activity
  • Sales made outside Illinois, but fulfilled from inventory located within Illinois, will be assessed ROT according to the location of the inventory
  • Sales that are both made and fulfilled outside of Illinois will be assessed ROT according to the purchaser’s location (destination rate)

Remote sellers will need to continue to monitor Illinois economic nexus thresholds when exceeding $100,000 gross receipts or 200 or more separate transactions to Illinois residents.

Please reach out to Thompson Tax for further assistance or questions regarding this sales tax change.

One year later… Germany brings a change to its tax regulations: The USt 1 TI VAT Certificate

As of March 1, 2019, the German tax authorities sanctioned the implementation of a new tax certificate, the “USt 1 TI”, to ensure that all sellers established outside of the European Union are in compliance with German VAT regulations.  As of October 1, 2019, this obligation become compulsory for all sellers established within the European Union as well.

To continue or commence online selling activities, sellers now need to hold a valid USt 1 TI VAT Certificate. Failing to meet this requirement may cause the launch of your online activities in Germany to be delayed, or your current online activities to cease.

The USt 1 TI VAT Certificate, which is valid for a 3-year period, is issued after registration for VAT in Germany and upon successful completion of the certificate application process.

With a branch office based in Germany, our Partner Firm can provide you with local tax representation services to assist you with the application process.  If you make sales to customers in Germany and would like assistance with obtaining the USt 1 TI VAT Certificate, please reach out to us for an introduction.

Businesses in Illinois get sales tax reprieve

Illinois’ Governor Pritzker is providing businesses that operate eating and drinking establishments some much needed relief during the COVID-19 pandemic.  After a strong push from merchants, the Governor’s new policy provides a two-month reprieve for businesses needing to remit collected sales taxes to the state for processing. This concession offered by the Governor will help preserve liquidity for companies that are suffering from decreased income during the ongoing crisis, but who are still facing operational expenses.

The deferral in sales tax will apply to bars and restaurants that paid $75,000 or less in sales tax in 2019; and will include approximately 24,000 establishments. These establishments will still have to file returns for March, April, and May, but will be allowed to withhold their payments for two months without being charged interest.  There will also be no penalties accrued providing that the merchants make payments in four timely installments beginning on the 20th of May, then again in June, July, and August. Officials estimate that four out of five bars and restaurants statewide will benefit from this deal.

COVID-19 Update

As concerns grow surrounding the seriousness of the COVID-19 virus, Thompson Tax would like to extend our sincerest hopes that you and your loved ones remain safe and healthy. We are continually monitoring the CDC and WHO prevention updates, and we are vigilantly following all recommended guidelines to ensure the ongoing health of our employees and communities.  Please rest assured that our dedicated national team is continuing to serve our current clients and we have the capacity to support more as needed. Thompson Tax can provide immediate assistance such as:
  • Filing Returns
  • Requesting Extensions
  • Requesting Payment Plans through the Taxing Authorities
  • Researching Tax Laws
  • Assisting with Penalty and Interest Waivers, and
  • Assisting with Ongoing and Managed Audits
In addition, we’re monitoring the latest updates regarding adjustments to State deadlines during this time of crisis. We’re available to ease the burden on your Finance and Tax Departments if you should need it. As always, Thompson Tax is just a phone call away.
Best practices for avoiding the Coronavirus include:
Encourage respiratory etiquette by providing education and reminders about covering coughs and sneezes with tissues, and easy access to tissues and trashcans.
Encourage hand hygiene by providing education and reminders about washing hands, and easy access to running water and soap or alcohol-based hand rubs.
It is also suggested that you practice social distancing in the presence of others by maintaining a distance of 6 feet. Also consider using a non-contact gesture of greeting, like salutes, placing your hand over your heart, or a bow/nod of head.
Avoid surfaces exposed to a high level or personal contact and if the situation is unavoidable, do not touch your eyes, nose, or mouth, until you are able to thoroughly wash your hands.
Please refer to the CDC for any additional information on COVID-19.
What can You do to help avoid the Coronavirus?