Since March 1, 2012, New York State has provided an exemption from sales and use tax for certain electronic news services and electronic periodicals. In order to qualify for the exemption, a news service must “be sold at or below the cap amount….”

The New York State Department of Taxation and Finance recently announced the cap amount in effect for “sales or uses of electronic news services that occur from June 1, 2013, to May 31, 2014:” $2,190. This is the same as the cap amount for the period June 1, 2012 to May 31, 2013.

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Alabama may redefine what triggers nexus.

The Tax Executives Institute, Inc. (TEI), the “preeminent association of tax professionals worldwide,” has sent a letter to the Alabama Department of Revenue urging it to abandon its “proposed local sales tax regulation governing seller collection responsibilities.” The proposed regulation would “create a more complicated system for determining and complying with sales and use tax obligations in Alabama;” therefore, TEI urges Alabama to “retain the existing well-established single nexus threshold for state and local sales taxes.”

In the letter, TEI explains that “[f]or decades, Alabama has applied a harmonized rule requiring businesses to collect and remit both state and local sales and use taxes only when the business has ‘substantial nexus’ with both Alabama and the local jurisdiction.”

Proposed Regulation 810-6-5-.04.02, however, would “impose a lower and amorphous nexus threshold for local sales and use taxes….” If enacted, it would require any business that ‘purposefully direct[s] its business activities towards the consumers of that jurisdiction” to collect and remit sales tax.

TEI stresses that such an approach “creates an undue administrative burden on businesses with minimal operations in the county seeking to impose its tax….” Furthermore, there’s a good chance any such regulation would run smack into “U.S. constitutional limitations on state and local taxing powers.”

The Department of Revenue held a hearing on the proposed regulation on June 11, 2013. The outcome of the hearing has yet to be revealed.

While Alabama considers a regulation that would arguably complicate its sales tax law, Congress is considering the Marketplace Fairness Act of 2013, legislation that would require states to simplify their sales tax law before they could obligate remote vendors to collect sales tax.

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Chairman Bao Bun, a Bay area food truck.

In May of this year, the New York Times Magazine ran an article entitled, “The Food Truck Business Stinks.” It outlined the “classic case of bureaucratic inertia” that mobile food vendors face in the Big Apple, and lamented the fact that there aren’t more really good food trucks out there.

That said, nine NYC food trucks made The Daily Meal’s 2013 list of “101 Best Food Trucks in America.” Red Hook Lobster Pound, a New York City food truck, topped the list.

Criteria for The Daily Meal’s List of 101 Best Food Trucks in America:

• Has to be a truck (no trailer or cart or wagons);
• Must have strong followings on both Facebook and Twitter;
• Must be praised by national and local publications;
• Must have innovative, original menus; and of course,
• Must have really tasty food.

29 food trucks in California made the top 101—a testament either to the entrepreneurial spirit of California chefs or the inviting climate. In any event, if 29 made the top 101, just imagine how many food trucks there must be in The Golden State.

Lots.

It’s no surprise, then, that the California State Board of Equalization recently released the following two special notices: Registration and Reporting Requirements for Mobile Food Vendors and Recordkeeping Requirements for Mobile Food Vendors.

The Registration and Reporting notice reminds, “If you are a mobile food vendor you are required to register with us, file sales and use tax returns, and to maintain books and records that are adequate for sales and use tax purposes.”

The Recordkeeping notice reminds “mobile food vendors—those who operate food trucks, stands or carts that do not have a fixed physical location—of the importance of keeping books and records that are adequate for sales and use tax purposes.”

The state sales and use tax rate in California is 6.5%, but with local taxes, the total combined rate ends up somewhere between 7.5% and 10%, depending on the locality. Mobile food vendors must collect and remit the appropriate sales tax rate wherever they are. Vendors are advised to reference the BOE list of California City and County Sales and Use Tax Rates.

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Buying a costume for historic re-enactment in Gloucester County, VA? Effective July 1, 2013, purchases will be subject to an additional 0.3% sales tax.

The Virginia Department of Taxation has announced a change to the July 2013 sales and use tax rate change in Northern Virginia and the Hampton Roads Region.

Under House Bill 2313, which takes effect July 1, 2013, the Virginia state retail sales and use tax rate will increase by 0.3%. An additional 0.7% increase is slated for counties located in Planning District 23 of the Northern Virginia and Hampton Roads regions.

According to the Department of Taxation:

“[T]he new 0.7 percent additional Retail Sales and Use Tax that will be imposed in the Northern Virginia and Hampton Roads Regions will not be imposed in the counties of Gloucester and Surry.” (Emphasis mine).

It turns out that Gloucester and Surry Counties are not located in Planning District 23. As a result, the rate of retail sales and use tax in the Counties of Surry and Gloucester will see only the 0.3% statewide increase on July 1. Their new sale and use tax rate will be 5.3%.

Planning District 23: New Sales and Use Tax Rate, July 2013:

• Isle of Wight County, 6%;
• James City County, 6%;
• Southampton County, 6%;
• York County, 6%;
• City of Chesapeake, 6%;
• City of Franklin, 6%;
• City of Hampton, 6%;
• City of Newport News, 6%;
• City of Norfolk, 6%;
• City of Poquoson, 6%;
• City of Portsmouth, 6%;
• City of Suffolk, 6%;
• City of Virginia Beach, 6%; and
• City of Williamsburg, 6%.

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Amazon to get its feet on the ground in Florida.

Amazon, the world’s largest online retailer, has announced its intention to open several operations centers in Florida. In making the announcement last week, Governor Rick Scott (R) hailed the news as “further proof that we’ve turned our economy around.”

According to Paul Misener, vice president of Amazon’s global public policy, “We propose to create more than 3,000 new jobs and over $300 million in investment in Florida, while we work toward enactment of the federal Marketplace Fairness Act, which will protect states’ rights to make their own revenue policy choices.”

The Marketplace Fairness Act of 2013 (MFA) was approved by the Senate and is currently under review in the House. If it becomes law, it will give states the right to require certain remote sellers to collect sales tax—provided the states enact certain tax simplification measures.  Amazon supports MFA, but it has also fought the collection of sales tax in several states, such as New York and Texas. The e-retailer reached an agreement with other states, such as South Carolina, whereupon it would bring jobs to the state in exchange for a delayed obligation to collect sales tax.

A similar situation may be happening in Florida.

Earlier this year, Amazon offered to build distribution centers and create jobs in the Sunshine State if the state would delay sales tax obligations for two years. Many felt the jobs would have been welcome in a state that the governor himself said was “facing crippling debt, record-high unemployment and a downward spiral of job losses” just two years ago. Yet in May, the governor flummoxed many people in the state when he rejected the deal with Amazon “over concerns that it would have meant higher taxes for Floridians.”

Just when Amazon will start collecting sales tax in Florida is unclear. The governor’s press release reads: “Amazon will begin collecting Florida sales tax at such time as it is required under current Florida law.”

The online retailer has not yet revealed where it will set up shop in Florida; but according to the governor’s press release, “the availability of economic development incentives will be a material factor in any final location decisions.”

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Washington State: There’s more to Forks than vampires.

A number of Washington State cities are loosening their belts and expanding their size.

Effective July 1, 2013, the following cities are increasing their boundaries through annexation:

• Forks (Clallam County): Klahn Family Annexation;
• Redmond (King County): Jones Annexation;
• Snohomish (Snohomish County): Snohomish Youth Soccer Annexation;
• Tonasket (Okanagan County): Corso Parcel Annexation, Chief Tonasket Park South, and Mill Drive / Bonaparte;
• Vancouver (Clark County): Glenwood Hills Annexation;
• Lynnwood (Snohomish County);
• Ridgefield (Clark County); and
• Moses Lake (Grant County).

“According to the Department of Revenue, “[s]ales tax rates for businesses included in the annexation may be affected.” The various city planning departments should have more information.

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Seem likely for Nevada.

Nevada Governor Brian Sandoval (R) has signed two bills that could raise local taxes, and he had indicated he will sign a third. The governor called a special legislative session in order to finish business left undone during the regular session, which concluded June 3.

Sales and Use Tax, Clark County

SB 1 (awaiting the governor’s signature) provides “legislative approval required for an increase in the tax imposed pursuant to the Clark County Sales and Use Tax Act of 2005….” In addition, it provides legislative approval for “an increase… in the rate of the tax imposed … in the amount of not more than fifteen-hundredths of 1 percent, if:

• The increase…is enacted by an ordinance approved by a two-thirds majority of the members of the Board of County Commissioners of Clark County;” and
• The date on which that increased rate is first imposed is on or after October 1, 2013, but before July 1, 2016.”

The sales and use tax revenue would go towards employing and equipping additional police officers for the following:

• Boulder City Police Department;
• Henderson Police Department;
• Las Vegas Metropolitan Police Department;
• Mesquite Police Department; and
• North Las Vegas Police Department.

Fuel Taxes

The governor signed AB 413 into law on June 12. It authorizes “certain larger counties to impose additional taxes on fuels for motor vehicles….” Any new county taxes must be approved by a majority of the voters in the county, and any new state taxes must be approved by a majority of voters in the state.

To be eligible to impose the additional taxes, counties must have a population of 700,000 or more. Annual increases in the tax are permitted, so long as they are tied to the rate of inflation.

Sales and Use Tax, Certain Other Counties

Governor Sandoval also signed into law Assembly Bill 46, which authorizes the imposition … “of a new sales and use tax and ad valorem tax in certain counties for the capital projects of the school districts in those counties.” Approval of any such tax is required by a two-thirds vote.

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White Pine County, Nevada, will use new local option sales tax to fund community pool.

The Nevada Department of Taxation has announced an upcoming tax rate change for White Pine County. Effective July 1, 2013, White Pine County will reinstate a local option sales tax of 0.25%. As a result, the total tax rate from White Pine County will increase from 7.475% to 7.725%.

Revenue generated by the tax will fund operation and maintenance of an indoor swimming pool for the county.

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Certain Louisiana parishes may soon get more sales tax revenue.

Louisiana has a new law that “authorizes certain parishes and school boards to levy a one-half cent sales tax,” effective August 1, 2013.

What makes a parish eligible?

To qualify, parishes must:

• Be governed by a home rule charter; and
• Have a population between 115,000 and 125,000 (according to the latest federal decennial census).

Any new one-half cent sales tax would be “in addition to the taxes authorized by R.S. 47:338.54 and other law.” Voter approval is required.

What makes a school board eligible?

School boards may levy an additional sales and use tax if the population of the parish is between 22,000 and 422,800 (according to the latest federal decennial census). Any additional sales and use tax may not exceed one percent “within the territorial jurisdiction of the parish.”

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Minnesota has removed the question mark.

Minnesota has passed an affiliate nexus law that redefines the out-of-state retailers required to collect and remit sales tax in the state. The so-callled Amazon Tax takes effect July 1, 2013. In order to help businesses understand the new requirements, the Minnesota Department of Revenue has released an information sheet on Solicitor Nexus.

The notice explains that an out-of-state retailer is presumed to maintain a place of business in Minnesota if:

• It enters into an agreement with a resident for a commission or other substantially similar consideration;
• The resident representative either directly or indirectly solicits business from Minnesota customers to the retailer, through a link on an Internet website or otherwise; and
• In the preceding four quarters, the out-of-state retailer has gross receipts of $10,000 or more.

“Resident” may be a person or a business. “Solicitor” is any person “who directly or indirectly, solicits business to the retailer….” Any out-of-state retailer that solicits sales of taxable tangible personal property or services through any person, independent contractor or employee or other representative, must collect and remit sales tax in Minnesota.

It should be noted that advertising alone does not create a presumption of nexus. However, nexus is presumed if the advertisement is online and includes a link that “directly or indirectly links to the website of the retailer, where the consideration for placing the link on the website is based on the volume of completed sales generated by the link.”

Retailers have the right to “rebut the presumption that it is soliciting sales in Minnesota.” The requirements for rebuttal are explained in the notice.

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