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If Senate Bill 6143 is signed by Washington's Governor, Chris Gregoire, taxpayers can expect limitations on the availability of bad debt credits or refunds. This legislation, if passed, would limit bad debt credits and refunds to the seller and the seller may not transfer or assign rights to bad debt credits or refunds. See Washington Special Notice 04/19/2010.

As competition increases between Kindle and Apple's iBooks platform, so is the pressure on Amazon and other online retailers to collect sales tax at the purchaser's location. Daily news feeds hit the internet about state and local governments in budget shortfalls due to decreasing sales tax dollars.

While the details are technical and 'legal', the short version is that customers will pay sales tax on many purchases of online books in the future. It should be noted that this is not Amazon or other retailer's "decision", but legally required based on long standing sales tax laws.

While not final, Alabama has submitted a bill to eliminate the 4% state sales tax on groceries. The House Education Appropriations Committee approved the bill and it should go before the full House later this year.

In 2008, Indiana ruled that cutting guides sold by a manufacturer to a licensed practitioner for use in surgery were exempt from tax as orthopedic devices. Indiana reasoned that such sales were exempt from tax because "cutting guides are orthopedic devices prescribed by the surgeon who uses the device during surgery."

Indiana has reversed this decision. Indiana now views a sale of cutting guides by a manufacturer to a licensed practitioner as a taxable consumption of tangible personal property. Indiana has now reasoned that "implicit in the exemption" is the requirement that possession of orthopedic devices must transfer to the patient. Since cutting guides are not...

Washington recently signed into law an optional tax for localities to be used for:

1. "...the purpose of providing for the operation or delivery of chemical dependency or mental health treatment programs and services and for the operation or delivery of therapeutic court programs and services."

Additionally, Washington provides for a partial set aside for criminal justice programs.

"One-third of all money received under this section must be used solely for criminal justice purposes, fire protection purposes, or both. For the purposes of this subsection, "criminal justice purposes".

A full text of the bill may be found:

...

Sales tax is due when purchasing/renting a portable toilet along with maintenance services in Rhode Island. Rhode Island determined that these services were of no value without the portable toilets and therefore were a part of the taxable rental of tangible personal property. Other states have addressed the taxability of portable waste collection containers (toilets); In late 2009, Georgia opted not to tax portable toilets, reversing its earlier year intention to tax these rentals/sales.

Wyoming House Bill 67 provides a sales tax exemption for most computer equipment purchased and used in the state by data processing centers.

The average sales tax rate in the US is now north of 8.5%.

In addition to increased rates, in 2009 states reduced lookback periods for refunds, enacted legislation to increase the number of services that are subject to sales tax, and suspended many exemptions.

The following states increased their sales tax rates: District of Columbia & North Carolina - over 600 local rates were increased in 2009.

As states continue to struggle with revenue shortfalls, legislation is aimed at increasing an otherwise decreasing funding source; taxes. Interestingly, most states 'legally' require anyone who purchases goods online to self remit a sales tax (typically called a 'use tax') on their online purchases. However, very few individual consumers ever comply with this legal requirement.

Due to the difficulty of self-compliance and inability to audit every resident of a state, lawmakers look toward those who are accustomed to collecting tax; businesses. This appears to be the path that Colorado is headed down. Assuming this law passes, and withstands scrutiny, this may be the first of...

Massachusetts approved a new 5% tax on satellite television providers. The new tax is part of the state's 2010 budget plan approved last summer.

This tax is being challenged by the satellite industry because it is not also applied to cable television providers (who pay a 5% franchise fee to use public rights of way for burying cables).

It should be noted that despite the apparent equality of the 5% tax and 5% franchise fee; the two are only the same in their rate. This tax raises several issues and questions.

Kentucky's legislature is in dialogue over imposing a sales tax on all services performed in the state. While it appears unlikely at this time, consideration of imposing sales tax on services would place Kentucky with a very few states that generally tax services (four at present; Hawaii, New Mexico, South Dakota, and West Virginia).

As states' continue to face budget shortfalls, we have seen a significant increase in dialogue, proposed legislation, and "voter approved" bills to increase tax rates and expand the scope of transactions subject to sales tax.

Section 552 of Speaker Nancy Pelosi’s Health Care Bill proposes to establish an excise tax in the amount of 2.5% on medical devices sold for use in the United States.
The MDMA (Medical Device Manufacturers Association) reports that the cost to their industry would exceed $20 billion dollars over the next ten years and a sure halt in job creation.

The Georgia Department of Revenue ("GA DOR") issued an Informational Bulletin SUT - 2009-10-28 in October of this year. The GA DOR is granting permission to take credits on returns in order to recover sales or use tax erroneously paid on purchases of manufacturing machinery and equipment. While no interest is permitted for these recoveries, taxpayers can enjoy a much more direct and certain recovery of taxes erroneously paid. Credits must start on tax returns filed in 2009.

With daily reports from local newspapers and online articles (occasionally national news) of reduced sales tax collections, it is no mystery why several state tax agencies are limiting or reducing the amount of tax recovery availalbe.

Missouri reduced the interest rate on sales tax refunds by a half a percent for the first quarter of 2010.

As of Jan. 1, 2010 Washington will not accept a resale certificate in order to exempt wholesale sales. The state now requires an application and issuance of a reseller permit before wholesale sales will be exempt from tax. Washington has made it clear that it will not permit sellers to obtain reseller permits after the fact - instead, Washington requires that reseller permits are obtained before a company is permitted to make tax-exempt wholesale purchases.

To be clear - if you don't obtain a resellers permit before a wholesale transaction - Washington will collect tax twice - first when the wholesaler buys the product and second when they sell it.

HOW DO YOU OBTAIN A...

"Deal-makers may need to start budgeting for a special transaction tax if some members of Congress get their way. While such a tax is not expected to be passed anytime soon, it is one of the ideas being floated about on Capitol Hill these days as a way to raise money to fill the expanding hole in the federal budget.

The tax could be levied on transactions ranging from over-the counter derivatives trades to large mergers. Its intent is to help curb excess speculation as well as a way to build revenue.

The United States had a transaction tax from 1914 to 1966. The Revenue Act of 1914 levied a 0.2 percent tax on all sales or transfers of stock. In 1932, Congress more than...