Monthly Archives: April 2013

APRIL 2013 NEWS FROM SULLIVAN & ASSOCIATES, PC

With the end of March Madness, spring appears to finally have sprung, and my home state of New York continues to show that their interpretation of the US Constitution has sprung a leak, as their application of long standing precedent and legal logic differs significantly from reality. As a New York court once again affirms this ridiculous “Amazon/Click Through Nexus” law, you really come to question, well… I’ll just leave it there. Meanwhile, another state jumps into the Amazon pool as Utah comes up with an incentivized voluntary sales collection regime, read bribery, for remote sellers. I have seen some interesting ways to try and get compliance, but this one may very well take the cake. Have a great April.

Idaho – Income Taxes – New Law Revises Procedure for Forgoing Net Operating Loss (NOL) “Carrybacks”

Idaho recently retroactively passed legislation that “simplifies” the treatment of net operating losses (NOLs) for Idaho individual and/or corporate income tax purposes by eliminating the required separate state election to forego an NOL “carryback” for taxpayers wanting to carry forward all NOLs (i.e., prior Idaho law required such taxpayers to make a separate election to forego the NOL carryback by checking a box on the Idaho return). Revising the default rule, taxpayers wanting to claim an NOL carryback for any taxable year commencing on or after January 1, 2013, must now file an amended return carrying the loss back within one year of the end of the taxable year of the NOL that results in such carryback. H.B. 184.

New York – Sales Tax – Click-Through Nexus Provision Is Constitutional on Its Face

Online retailers appellants who sell their products solely through the Internet, failed to demonstrate that a statutory provision that requires out-of-state Internet retailers with no physical presence in New York to collect New York sales and use taxes is facially unconstitutional under either the Commerce Clause or the Due Process Clause. The court held that the statute at issue created a rebuttable presumption that a retailer solicits business in New York if any in-state entity is compensated for directly or indirectly referring customers to the retailer, whether by a link on an Internet website or otherwise, and the cumulative gross receipts from these and other New York affiliate referrals exceed $10,000. The appellants in the instant case both offered programs through which third parties (affiliates), who are compensated on a commission basis, agreed to place links on their own websites that directed users to the taxpayers’ websites. Overstock.com, LLC v. New York State Department of Taxation and Finance, Court of Appeals of the State of New York, Nos. 33 and 34, March 28, 2013.

New York – Sales and Use Tax – Bulk Sale Purchaser Liable for Seller’s Unpaid Tax

A purchaser of a retail liquor store in a bulk sale transaction was liable for New York sales tax assessed against the seller prior to the purchase because the taxpayer did not timely notify the Division of Taxation of the transfer. Under New York Tax Law, the purchaser in a bulk sale transaction must notify the division of the sale at least 10 days before taking possession of or making payment for the business assets in order to avoid liability for any sales and use tax due from the seller. Here, the taxpayer did not comply with the notice requirements and therefore, the taxpayer exposed itself to liability for sales and use taxes due from the seller. Sky Liquor, Inc., New York Division of Tax Appeals, Administrative Law Judge Unit, DTA No. 823935, March 14, 2013.

Utah – Sales Tax – New Law Permits Remote Sellers that Voluntarily Step Forward to Collect Tax to Receive 18% Discount

A new law, effective January 1, 2014, authorizes certain remote sellers not otherwise required to collect or remit Utah sales/use tax under state or federal law, which voluntarily come forward to collect Utah sales/use tax on their Utah sales, to retain a portion of these collected taxes (i.e. an amount equal to 18% of any amounts the seller would otherwise have remitted to the Utah State Tax Commission). H.B. 300.