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From the category archives: Boulay

State and Local Tax

Minnesota Local Sales Tax Nexus: Big Change for Some Taxpayers

The South Dakota vs. Wayfair U.S. Supreme Court ruling from June 2018 continues to spur new state laws and guidance. The newest change impacting Minnesota sales tax registrants has to do with requirements to collect local sales taxes. On September 7, 2018, the Minnesota Department of Revenue informed taxpayers they must collect local Minnesota sales taxes on certain sales even if their business does not have physical presence in those local jurisdictions. Businesses primarily impacted will be those delivering taxable products/services to their customers’ locations in Minnesota. Retailers only making point of sale transactions to customers who visit their retail business locations may not experience a change.

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Minnesota and Wisconsin Announce Sales Tax Collection Requirements for Remote Sellers

Since the U.S. Supreme Court’s decision in South Dakota v. Wayfair on June 21, which allowed states to require retailers to collect sales tax on purchases made by residents of states where the retailer has no physical presence, states have been providing a steady stream of guidance announcing their own intentions to begin sales tax collection by remote sellers. Minnesota and Wisconsin are two of the latest states to make such announcements, stating that remote sellers will be required to collect sales tax from residents beginning October 1.

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Quill is Gone: What Does that Mean for Physical Presence Requirements?

On June 21, 2018, the U.S. Supreme Court sided with the State of South Dakota to overcome the physical presence test required by the 1992 Quill Corp. v. North Dakota case. In Quill, the Court required retailers to have physical presence in a state before it could be held responsible for sales tax in that state.

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Remote Seller Notice and Reporting Requirements

States have problems enforcing sales and use tax laws, period. This is especially true when remote sellers ship products to in-state customers but do not charge sales tax. Advocates of the status quo may argue that purchasers still have an obligation to self-assess use tax. But when was the last time you self-assessed tax for your online purchases? Assuming you said ‘never,’ you’re not alone. Self-assessment is virtually unheard of by most individual consumers. Businesses are better at self-assessments, but compliance is far from 100%.

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Amazon Required to Identify FBA Sellers to State Authorities

Ever wondered how your business could wind up on some far-off state tax department’s hit list? How would another state, city or county jurisdiction ever know your company’s name, let alone have reason to question you about income taxes or sales taxes? These questions are common when businesses receive state tax questionnaires or notice letters. Conversations about how the department of revenue got your name generally result in guessing games. However, we do know that states are looking at one new method when it comes to sellers utilizing the Fulfilled By Amazon (FBA) program.

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Sales Tax Nexus Showdown – 'South Dakota v. Wayfair, Overstock and Newegg'

The U.S. Supreme Court established the physical presence standard for sales and use tax nexus 26 years ago with its Quill Corp. v. North Dakota decision. Nonetheless, in Quill, the Court said it was up to Congress to determine constitutional standards for allowing states to determine sales and use tax collection obligations. Congress has considered various legislative options but has yet to act, leading many states in recent years to create laws directly challenging Quill in the hope of motivating the Court to reconsider its physical presence standard. The states’ efforts paid off on Friday, January 12, 2018, when the U.S. Supreme Court granted certiorari in South Dakota v. Wayfair, Overstock and Newegg. This means the sales tax nexus issue will have its day in court once again.

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Summer is a Good Time to Start your 2017 Tax Planning and Organize your Tax Records

You may be tempted to forget all about taxes during summertime, when “the livin’ is easy,” as the Gershwin song goes. But if you start your tax planning now, you may avoid an unpleasant tax surprise when you file next year. 

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Employee vs. Contractor: Why it’s important to properly classify your workers

As a small business, there are many factors to consider when classifying an individual as an employee or independent contractor. Hiring independent contractors often means a business can save money by reducing costs, such as, pensions, group health insurance and workers’ compensation insurance.

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Operating across state lines means new tax liability — Here’s why that might be a good thing

Expanding nationally isn’t just for large corporations anymore; small businesses are finding it easier than ever to cross state lines and widen their markets with the popularity of e-commerce and increasing efficiency of reaching far-away customers.

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Not All Taxpayers Will Benefit from the Deductions for State and Local Sales Taxes

There was a break put into place that allowed taxpayers to take an itemized deduction for state and local sales taxes instead of state and local income taxes. This break was made permanent and can prove vital to those residing in states that have no or low income taxes, as well as taxpayers who purchase a major item in that tax year such as a car or boat. However, these breaks do not benefit all Americans equally—whether you will receive this break depends on the state you reside in and your recordkeeping.

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