In this episode, I discuss the 7 things to know about Sales Tax in addition to the Federal, State, and Local Tax Developments.

In episode 79, I discuss,

Federal Tax:

 Federal-IRS Budget gets Cut $341 M out of $10.95 B

 Mileage Deduction denied for lack of Substantiation requirement business vs Personal  >$20,000 deduction Schedule C

 Offshore Compliance program

CA - Dissolved corporation did not lose right of confidentiality of tax returns.

State Tax Update:

FL-Nursing Homes not subject to commercial rental tax

OH-Tax credit and earned income tax credit

Receipt of payments and documents

RI-Real estate tax $2.30 per $500 from $2 per $500

 Alcoholic beverage tax reduced

 Gasoline tax adjusted for inflation

 Unable to register your vehicle if you owe taxes or a tax return.  No administrative review or appeal

 SC- Gov Hadley veto i2014-2015 budget bill which included

Teachers receive $275 per year

Contribution deduction to a nonprofit Scholarship funding organization

up to 60% of taX liability
$300 individual $1,ooo joint identity theft deduction . Not available if deducted as business expense or if taxpayer  enrolled - in sc identity theft services ,

 CT-Subject Non-resident’s non-qualified deferred compensation plan to taxation. requires non-residents to pay tax on gain/losses from disposition of interest in certain entities . Change how income is appt to CT

Require Trusts estate to add any lump SuM distribution It receives during the year to CT AGI.

 Main Topic:

         Summer Daycare expenses are deductible

        10 things to know

In Episode 78,

Federal Tax Update:

Cantor Loses re-election bid

Faulty Affordable HealthCare Subsidiaries
will leave people owning taxes next year
House to vote on 3 extenders-Section 179 500K

Cantor Tax Reform Legislation-Democrats Want revenue offsets
S-Corp built in gain holding period reduced from 10 yrs to 5 years
charitable giving by S-Corp basis adjustment rules

Veto-small Business Extenders

Section 179 Expensing S-Corp TAX Extenders

IRAS not Retirement fund for purpose of bankruptcy exemption

Employee of Diplomatic Delegation could not exclude wages from income

State Tax Update:

CA-sales use tax due on purchases made with virtual currencies.

Co-Presumption of physical presence of out of-State retailer Marketplace Fairness Act

DC - proposes a fitness tax 5.75% on gyms yoga and health club services.  Carwashes, bowling billiards carpet cleaning, water delivery.  Proposal was made hours before initial vote.

IL-allows billing address for Souring of Sales for Cloud Computing Services

Telecommunications surcharge enacted is restricted for population of 50 k or more cannot exceed the highest monthly surcharge imposed as of January 14 by any other county

LA-Un claim Property U.S. Savings Bond 3 year property

Ma-Interest Liability deductions based on deferred stock Subscription arrangements rejected

Colorado- Credit- for Business Personal property Taxes Pd - PPT x 100%- 4.63% - must have less than $15,000or less worth of Personal Property (2014-2020) Send Copy of PPT statement to DOR .

Iowa- 2014. Workforce Housing Incentive program 10% of .new investment in a housing Project. Cannot exceed. $250,000 per dwelling. Can claim refund for Sales & use tax that are related to the project

CA Lawmakers propose banning plastic bags and .taxing paper bags at .10 per bag.

MO - 300,000 taxpayers still wanting on tax refunds

SC- Gov Haley proposes to eliminate the income tax

Main Topic:

Researching & Tax Planning

     Does it make a difference?

     Court Cases

     Memorandums

     IRS Rulings

     IRS Regulations

     IRS     

In episode 76, the following federal, state, and main topic

Federal Update -

    Senate voted for cloture on HR 3474 tax extenders

     Couple denied easement for contribution of easement’s value.

An estate had right to demonstrate reasonable cause for failure to pay taxes.  Court rejected their reasonable cause.  Relied on a tax professional, filed the extension, but did not make and estimated tax payment.   The estate had right to demonstrate that failure to timely pay was due to reasonable cause not willfully neglect. An experience tax attorney said that it was possible to defer paying the tax under code sec 6166.  Order was remanded on late penalty based on expert advice.  Was not controlling because the estate did not rely on another performing the ministerial task of filing or paying.

2010 Alimony deduction $10B income compliance - 47% resulting in a discrepancy of 2.3B.  Not requiring TIN.  IRS filters excludes returns that be at hush risk of alimony deduction.  IRS agrees with requiring a TIN for the deduction.

Gain excluded from sale of principal property had to be recognized when seller later repossessed the property because he did not resell the property within one year.

State Update

KS- State Court of tax appeals changed to State Board of tax appeals.

Small claims increased from $2M to $3M

Filing fees no longer charged for
   Prior filed year appeals that have not been     decided by the new statutory deadlines. 
    Taxpayers filing in most cases involving single residential property. 
    Not for profits organizations with property less than $100,1000
     Municipalities and political subdivisions of the state
     Must have one member that is a licensed and certified general real else appraiser.
     Prohibits county appraisals from increasing the valuation for two years for certain real property. 
     Interest rate for delinquent property taxes was set at  the rate plus 2%.  The 2% is eliminated.

California is offering relief for businesses and taxpayers affected by the San Diego Fires. - extension to file returns.  Relief from penalties and interest.  Request paper copies of records lost or damaged.
    Sales and Use Tax,  alcoholic beverage tax, cigarette and tobacco products excise tax,  motor fuel tax.

MD- Estate tax exclusions
    Before 2015 - $1M
    During 2015 - $ 1.75
    During 2016 - $ 2.5M
    During 2017 - $ 3.5M
    During 2018 - $ 4M

MO- joint resolution to raise the sales and tax by .75 subject to voter’s approval for 10 years to pay for transit purposes.   Does not apply to retail food.

NY -  technical memorandum on taxation of trusts effective March 31 2014.  Accumulation distributions made to NY residents are exempt from the NY AGO if the distribution is made before June 1 2014 or terminated and all assets are distributed before June 1

Local Update:

City of Evanston - imposed a tax on property owners to demolish a residential unit.  Seventh court of appeals.  It was not a fee because it did not compensate for a State provided service offered to homeowners who demolish s residential unit.  Not a fine because it was not designed to punish property owners for demolishing buildings nor was it enacted with the hope to deter citizens from tearing down houses and essentially cease all demotion of residential buildings.

Main Topic:

Expiring Provisions Improvement Reform and Efficiency Act of 2014

9 Tax Extenders for Individuals in HR 3474

1.       Extension of health care tax credit

2.       Extension of elementary and secondary school teacher educational tax credits

3.       Extension of exclusion of gross income from discharge of qualified principal residence indebtedness

4.       Extension of parity and modification of exclusion of income for employer-provided mass transit and parking benefits

5.       Extension of mortgage insurance premiums treated as qualified residence interest

6.       Extension of deduction of State and local general sales taxes

7.       Extension of special rule for contributions of capital gain real property made for conservation purposes

8.       Extension of above-the-line deduction for qualified tuition and related expenses

9.       Extension of tax-free distributions from individual retirement plans for charitable purposes