Local Office Blogs

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August 9, 2016

Sonya Daniels, Manager at CBIZ MHM Memphis, was featured in a recent article published by AccountingToday about the discussion of sales tax holidays.

When Massachusetts decided to cancel its sales tax holiday this year, many began to believe this will become a trend in the upcoming years.

Daniels explains that a state depends heavily on sales taxes for revenue, and canceling the sales tax holiday is a way to counter budget deficits.

For 2016, 17 states are offering sales tax holidays, including Tennessee. “From the end of July through early September, what they’re running basically is back-to-school,” said Daniels.

Many, like Daniels, wonder how many states will continue with the tax free holidays. “A lot of states are talking about the loss of revenues during that time,” she said. With the ability for consumers to also get the tax exemption online, there’s an even greater loss for the states.

But there is a helpful hint for those trying to navigate the waters. There are often good sales leading up to the tax holidays, and Daniels urges you to keep your eye in the paper during that time.

For questions about sales tax, contact Sonya Daniels at sdaniels@cbiz.com or 901-685-5575.

October 15, 2015

Featured for her expertise in State and Local Taxes, Sonya Daniels is making a big impact by providing insight to multiple national resources.

Sonya has been featured in both local and national news on web and print resources.  In the Memphis Business Journal, Sonya offered insight into Tennessee's tax-free weekend-- explaining what exemptions exist and why some items do not qualify for exemption.  Sonya was also referenced in the Chicago Tribune as it relates to the pros and cons of Illinois skipping back-to-school sales tax holidays.  Lastly, Sonya provided her insight on the topic for an article published by AccountingToday.  She spoke on the diverse specifics that exist on tax returns for states as well as the various reporting rules that are ambiguous from state to state.

More recently, Sonya authored a national blog post where she outlined tips on reporting for sales tax holidays and how important it is to remain compliant with state tax collectors.  Lastly, Sonya was quoted in the Tip of the Day published by Manta Media Inc.  Giving advice on tax-audit options to small business owners, Sonya explains why finding financing options through banks might be better than paying the high rates of tax authorities.

Too see previous blog posts referencing Sonya, click here.  For questions related to sales and use tax, contact Sonya Daniels at sdaniels@cbiz.com or 901-685-5575.

September 28, 2015

To support the highway system, the federal government, states and some jurisdictions impose a tax on motor fuel consumption. Fuel tax rates and exemptions vary on the federal, state and local level. Additionally, there are a number of fuel tax exemptions, which further complicates fuel tax planning.

If your company transports cold goods, if you use diesel particulate filters, pave roads, provide bus services or export goods, you may benefit from a CBIZ MHM fuel tax refund study. These studies help companies meet their fuel tax obligations while maximizing the benefits of the available exemptions.

Learn more about CBIZ MHM Fuel Tax Refund Studies.

July 17, 2014

The 8th Annual Tennessee Sales Tax Holiday Weekend is August 1-3, 2014.

What is considered tax-free?

Clothing priced $100 or less per item. Any clothing purchased for use by a trade or business, as well as accessories such as jewelry, bags, or sports and recreational equipment are not tax-exempt.

School supplies priced $100 or less per item. Any school supplies purchased for use by a trade or business are not exempt from tax. School supplies do not include instructional materials, reference books, or computer supplies such as printers, printer ink, etc.

School art supplies priced $100 or less per item. There is no requirement that purchases be made only for students. If an item is tax-exempt, anyone may make the purchase tax-free.

Computers $1,500 or less, not for use in a trade or business (includes laptops and tablets). Computer items like monitors, keyboards, speakers, etc. are not included. A full list of items can be viewed here.

For more information, go to http://www.tn.gov/revenue/salestaxholiday/.

April 14, 2014

On March 31, 2014, Governor Andrew Cuomo signed the New York State fiscal year 2014-2015 budget bill. This tax reform includes a major overhaul of the New York Corporate income and franchise tax. The Governor cites simplification as the main driver for the changes, as he is determined to make New York more attractive to do business in.

With changes being phased in until 2020, the now complicated structure of the New York consolidated return will mean major changes for taxpayers. As the effective date of this legislation is March 31, these changes will need to be considered for first quarter provision calculations. The budget bill is expansive, as there will be changes outside of just income and franchise tax, such as other miscellaneous repeals, adjustments, and additions. However, for the purpose of this post, we will only cover those reforms made to income and franchise tax for corporate taxpayers.

The following highlights of the tax changes are effective for the 2015 tax year unless otherwise noted and will impact your organization if you do business in New York:

Income Tax

  • New York’s previous combined reporting method converts to a water’s edge unitary filing, largely following the federal return. The intercorporate rules for combined reporting have been repealed. Each entity of an entire group of entities is liable for the tax and franchise tax of said group and calculated on a combined basis.
  • Provisions establishing the Subsidiary Capital tax and modifications have been repealed. For all taxpayers, the income tax rate reduces from 7.1% to 6.5% starting in 2016.
  • MTA Surcharge tax rate increases to 25.6% for the 2015 tax year, and will then be adjusted by the Tax commissioner as necessary each year.
  • The Net Operating Loss (NOL) changes from pre-apportionment to post-apportionment and allows for an option of taking the NOL over 2 or 10 years as a subtraction. NOLs remaining after 2014 will have to be converted to post-apportionment NOLs.
  • Many receipts will now be sourced under Market-based sourcing instead of the historical cost of performance methodology.

Franchise Tax

  • Capital tax will be phased out between 2016 and 2020.
  • The cap on capital tax increases to $5 million beginning in 2015.
  • The fixed dollar minimum tax based on a taxpayer’s New York sourced receipts has been retained, but increases the tax incrementally up to $200,000 for taxpayer’s with over $1 billion of NY receipts (the maximum before was $5,000).

Keep in mind that both domestic and foreign corporations doing business, employing capital, owning or leasing property, or maintaining an office in New York State will be subject to New York’s Article 9-A Corporate Franchise Tax. The budget bill adds “deriving receipts from activity” in New York to this list, and a corporation will be considered active in this regard if it has $1 million or more in receipts within New York under the bill’s revised sourcing rules. Additional changes included in the budget bill will be important to take into consideration for taxpayers. At this point, New York City’s fiscal year ends June 30.

As New York City has a history of mirroring New York state tax policy, we could expect to see something pushed out in this year’s New York City budget. You can find detailed information on the 2014-2015 Budget Bill on New York State’s website.

If you have any further questions regarding this budget bill and its impending tax reform, contact Josh Littlejohn at jlittlejohn@cbiz.com or (901) 685.5575.

January 14, 2014

As part of the 2013 Uniformity and Small Business Relief Act, taxpayers need to be aware of a change to business tax return due dates, effective January 1, 2014. All Tennessee Business Tax returns (TN Business License based on Gross Receipts) have a due date of the 15th day of the 4th month after the close of their year end.

Effective January 1, 2014, all Business Tax returns must be filed electronically, along with the associated payment. (Ex. December 31 year end, new due date of 4/15/2014.). During the transition, some businesses will be required to file short period returns and deductions will be prorated. Click herefor more information on this business tax transition.

If you need further information regarding this update to business tax returns, please contact Anna Howell, Senior Manager, State and Local Tax, in our Memphis office: ahowell@cbiz.com or 901.685.5575.

July 26, 2013

Anna Howell, State and Local Tax (SALT) expert and segment leader in the Memphis office of CBIZ MHM, weighs in on the highly anticipated Marketplace Fairness Act and what it means for online shoppers. 

A significant piece to the proposed Marketplace Fairness Act, or S. 743, is Section 2(c) also known as the 'Small Seller Exception.' As we discussed in our last blog post on the topic, "Marketplace Fairness Act Gains Momentum - Part 1," the legislation requires all “remote sellers” (including online stores) earning $1 million in revenue or more to collect taxes for every state and jurisdiction where they have customers. Moreover, the Small Seller Exception exempts remote sellers who earn less than $1 million in out-of-state sales. This rule may be just a small note included in one of the six sections of the act, however it arguably has created the most discussion among small to mid-size business owners. 

Who qualifies for the 'Small Seller Exception'? 

According to Section 2(c), remote sellers that have less than $1 million in gross annual receipts from remote sales will qualify under the 'Small Seller Exception.' Independent vendors who use third-party sites, such as Etsy or Amazon, may view the cut-off of $1 million negatively because in order to use these sites they must pay transaction fees. Right now these fees are not being incorporated in the annual calculation.

How does a state choose their 'certified' software provider and do businesses have any say in the matter? 

Every state will be required to provide remote sellers with free software that calculates all taxes due. Under the Streamlined Sales and Use Tax Agreement (SSUTA), adopted by a total of 24 states, only 5 software providers are 'certified' to provide such a program. Those states that choose not to join the SSUTA will be provided an alternative process within the act. This option will contain five mandates which must be followed and implemented into the state's tax plan. One issue is that the software each state chooses will not be subject to a list of requirements, therefore creating multiple forms of software that collect tax. The lack of uniformity could become a logistical problem for small businesses if each state differs in their process of collection. 

If the law is passed, how much time separates enactment and enforcement?

If the bill is passed by the House and later becomes law, each state under the SSUTA will have to let their citizens know that it is going to begin enforcing this collection process. The state then must wait 180 days and start collection on the first day of the financial quarter. If a state is not listed under the SSUTA, it must provide legislation which meets all five mandate requirements under the second option of the act and begin enforcing this act after the 180 day period on the first day of the financial quarter. 

What are some of the revisions being discussed? 

Several lawmakers and companies have publicly voiced their opinion on the Marketplace Fairness Act. Some discussions around the act include making revisions to the current law before any further action is taken. One major concern is the administrative burden this tax would place on small businesses. Opponents to this rule, including eBay, argue that the exemption level is too low and propose $10 million should be the cut-off.

July 18, 2013

Anna Howell, State and Local Tax (SALT) expert and segment leader in the Memphis office of CBIZ MHM, weighs in on the highly anticipated Marketplace Fairness Act and what it means for online shoppers.

The tax man cometh, and he is heading for the Internet.

As we await a final decision from the House on the Marketplace Fairness Act, it is important to understand its significance for employers as well as individuals. The Marketplace Fairness Act, or S. 743, is a piece of legislation which passed the Senate in early May and is currently under consideration in the House of Representatives. It requires all "remote sellers" (including online stores) earning $1 million in revenue or more to collect taxes for every state and jurisdiction where they have customers.

Its movement to law will mean thousands of dollars in new revenue for each state, collecting sales tax from Internet shoppers who once avoided the additional fee by ordering online. As expected, the law is facing more opposition at this level and more discussion surrounding its contents has become prevalent not only to the lawmakers themselves, but also to the general public.

The bill would force shoppers to pay sales tax for the state to which they are having their items shipped. Currently, most online shoppers are subject to a self-reported Use Tax, which is typically the same rate of tax. As Tennessee Governor Bill Haslam has said, according to the Memphis Commercial Appeal, "It’s not a new tax; it’s a tax that is owed right now but that people aren’t paying.”

So, what does the Marketplace Fairness Act mean for you? Stay tuned as there is much more to come on this significant piece of legislation.


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