Mississippi now offers a Sales and Use Tax Direct Pay Permit for purchases of Computer Software and Software Services.
Vendors who sell, rent, or lease computer software or computer software services do not need to collect sales tax on purchases when a permit is presented. Instead, purchasers utilizing the permit will be required to pay the tax directly to the Mississippi Department of Revenue.
Please note: If you already have a Direct Pay permit, you will not need to apply for a separate Computer Software Direct Pay Permit.
Effective January 1, 2024, Georgia will apply sales and use tax on the retail purchase of digital products, digital codes, and other digital goods that are transferred electronically to end-users in Georgia. The new digital sales and use tax will apply to the goods and products outlined below, provided that the end-user uses the digital products for personal consumption and not commercial use and is authorized to use the product, good, or code permanently after purchase with no obligation to continue paying for the product, good, or code after the initial sale.
Taxable Goods Under S.B. 56
- Specified Digital Products
- Such as digital audio video works, audio works, digital books, etc.
- Other Digital Goods
- Such as artwork, audio greeting cards, video games, newspapers, etc.
- Digital codes
- Such as key or activation codes that convey a right to obtain digital goods.
*For a complete list of taxable items, please contact us directly.
Resellers must retain proper records and documentation to be tax-exempt from the new digital tax.
Pre-Written Computer Software Exemption
When recorded properly, the sale of prewritten computer software delivered by means of ‘load and leave’ remains exempt; however, the exemption expressly does not include the taxable sales of digital products, digital codes, or other digital goods as listed above,
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We understand that changes surrounding tax law can be challenging to understand. That is why we aim to clarify the facts for you. Please reach out to us directly for further information.
The Fair Tax Act of 2023 was recently introduced to Congress. If passed, the Act would allow a federal consumption tax of 23% on all goods and services that would replace most other federal taxes nationwide.
If the Fair Tax Act becomes a law, it would effectively abolish federal corporate taxes, payroll taxes (which include self-employment tax), estate taxes, death taxes, and other federal taxes, such as capital gains. The legislation also looks to abolish the IRS since the Act aims for individual states to impose the levy beginning on January 1, 2025.
Multiple provisions are included in the bill. One such provision, the “prebate” provision, would send every household in America a check worth 23% of the poverty line for a household their size to offset some of the burden. Another provision addresses the collection of Social Security and Medicare funding through the new tax.
Although this bill is in its earliest stage, there are many intricacies that are already stemming marked discussion amongst Parties. What are your thoughts about this one size fits all tax proposal and the ever-changing sales tax landscape?
The Commissioner of Revenue argued that cookies, downloadable apps, and CDNs created the physical presence in Massachusetts necessary to enforce taxation laws under the Quill v. North Dakota standard. By using this standard, the audit division of the Department of Revenue sought to require US Auto Parts to register for, collect, and remit sales tax in Massachusetts. As additional evidence of the commissioner’s claim, they argued that the standard established by Wayfair v. South Dakota could be applied retroactively to require enforcement of 830 Mass Regs § 64H.1.7 when applied to out-of-state vendors.
After deferring to the Appellate Tax Board and then the U.S. Supreme Court, the Massachusetts High Court ruled in favor of the taxpayer.
Please let us know if you have any questions about this case or how it may affect your business.
Regulation 1684.5, an emergency regulation that was put into place by the California Department of Tax and Fee Administration (CDTFA) after the South Dakota v. Wayfair, Inc. decision was made in 2018 (138 S. Ct. 2080), is now undergoing the formal regulatory process to propose potential amendments. The regulation was initially put in place to govern the collection of use tax from out-of-state taxpayers that sell tangible personal property using the internet. The proposed amendments could impose extra requirements on “marketplace facilitators” and may impact additional taxpayers as well. Written comments from interested parties will be accepted until January 3, 2023 and a public hearing will be held if requested in writing prior to December 19, 2022.
On October 17, 2022, Circuit Court Judge Alison Asti ruled that Maryland’s Digital Advertising Services Tax (DAT) which went into effect on January 1, 2022, violates the Internet Tax Freedom Act (ITFA) which prohibits discrimination against electronic commerce, the Commerce Clause which prohibits state interference with interstate commerce, and the First Amendment of the U.S. Constitution. The Maryland Comptroller is expected to appeal the decision, but for now, although taxpayers are subject to estimated tax provisions, they are no longer required to file a return or pay the DAT. Taxpayers who have already paid the DAT during 2022 should plan to file refund requests if the decision is not overturned by a higher court.
The Maryland DAT, which is the nation’s first tax on digital advertising, is being addressed in federal courts as well.
Beginning July 1, 2022, Colorado will begin assessing a .27 retail delivery fee on purchases of tangible personal property that will be delivered by motor vehicle (USPS, Fed Ex, UPS, etc.) within the state. If a motor vehicle is involved in shipping, in any way from the time the order is accepted until final delivery, the delivery fee will be assessed. The purchaser is responsible for paying the fee; however, retailers and marketplace facilitators are responsible for collection and remittance. Regardless of how many shipments are required to complete the delivery only one fee will be assessed per purchase. Remittance of the fee follows the same filing frequency and due date as the Colorado state sales tax return, but the fee itself is not subject to Colorado sales tax. *Wholesale sales are excluded unless ordered in combination with purchases subject to sales and use tax.
Both in-state and out-of-state retailers with an active sales tax account, a retailer license, and any sales tax liabilities reported after January 1, 2021, will be automatically registered for a Colorado Retail Delivery Fee account. Retailers who are not automatically registered can create an account through the CO DOR website, by filing form DR 1786, or via the CO DOR’s Sales and Use tax System (which will be available by the end of 2022).
Make sure to check out the current list of remaining State Tax Holidays for 2022. If you have questions regarding any specifics, we are just a phone call away. Happy shopping!
The upcoming Kentucky tax amnesty program will run from October 1, 2022, through November 29, 2022, and will apply to qualified tax liabilities for taxable periods from October 1, 2011 through the end of November, 2021.
Every amnesty-eligible taxpayer will be contacted and notified about the tax amnesty program.
Any unpaid taxes that are eligible for the amnesty program, and which remain unpaid, will accrue interest at a rate 2% higher than the set interest rate, and any taxpayer failing to file for a period that amnesty was available will be charged collection fees ranging from 25-50%. Failure to timely file any return or pay any tax and interest due after amnesty is granted, for any period ending on or after October 1, 2011, and ending 3 years from the date that the amnesty was granted, will invalidate the amnesty.
Exclusions apply such as:
- ad valorem taxes on real property;
- ad valorem taxes on motor vehicles and motorboats collected by county clerks;
- ad valorem taxes on personal property payable to local officials; and
- any penalties imposed under the Tobacco Master Settlement Agreement Complementary Act or penalties for prohibited acts by cigarette licensees or manufacturers.
The first estimated payment for the Maryland Digital Advertising Tax is due tomorrow, April 15, 2022. Taxpayers generating more than $100M in global revenue annually, and who are expecting to make more than $1M in Maryland gross revenues from digital advertising services are required to submit an estimated payment utilizing Form 600D.
Taxpayers using a fiscal calendar for income tax purposes (and whose calendar year began during 2021) are required to file a 2021 short year return no later than April 15th, 2022. Return calculations will need to be prorated accordingly. Going forward, fiscal filers must submit their CAT returns no later than the 15th day of the fourth month after the fiscal year ends. Taxpayers using a calendar year for federal income tax purposes will not be affected.
Under Sales and Use Tax Rule 96, Tennessee suppliers were required to collect sales tax on products sold to out-of-state dealers and shipped to the out-of-state dealer’s Tennessee customers unless the dealer provided a Tennessee resale certificate or Streamlined Sales Tax Exemption Certificate which included a Tennessee sales tax ID number. As of January 10, 2022, Rule 96 was appealed, and Tennessee suppliers are now able to sell tangible personal property and taxable services to an out-of-state dealer and drop ship the products to an out-of-state dealer’s Tennessee customer without collecting sales and use tax by accepting a resale certificate from the out-of-state dealer’s state or a Streamlined Sales and Use Tax Exemption Certificate that includes the sales tax ID number issued by the out-of-state dealer’s state.
H.B. 45 which was passed by the Ohio House of Representatives on December 8, 2021, allows a tax amnesty period to run from July 1, 2022 through August 31, 2022. During this time, taxpayers will be able to pay qualifying delinquent taxes (due as of the effective date of the legislation) and receive a waiver for interest and penalties. Taxes included are sales and use tax, corporate income tax, and more!
Alaska, one of only five states without a state-level sales and use tax, has introduced H.B. 4005. If passed, the new law will create a state-level sales and use tax collection requirement that will become effective July 1, 2022.
Upon passage, the following will apply:
- Alaska will join the Streamlined Sales and Use Tax Agreement.
- The sale or lease of tangible personal property or services within Alaska will be assessed a 2% state sales tax based on the sales price of the transaction.
- Persons using tangible personal property or services acquired outside of the state, in a transaction that would have been subject to tax if it was purchased within Alaska, will be assessed a 2% state use tax based on the sales price of the transaction.
- Tangible personal property that was acquired by a purchaser for a use that was exempt under AS 43.44.060, but later converted to a use that is subject to sales tax, will be assessed a 2% state use tax.
Stay tuned for further updates!