Sales and use tax nexus is a very fluid and evolving area of tax law, and although Congress has historically been considered to be the sole gatekeeper to change, states have recently become emboldened in their efforts to unilaterally lower nexus barriers. For example, on March 22, 2016, South Dakota passed S.B. 106 which effectively establishes an economic nexus standard. The law requires remote sellers to register and collect use tax on its sales into South Dakota if its sales into the state exceed $100,000 […]
I commonly work with clients that have nexus questions. These days those questions often involve some of the more technical aspects of nexus, such as affiliate or click-through nexus. But, even where I’m addressing some of the more technical aspects of sales and use tax nexus, I always try to make sure our clients understand where it all started, which is the subject of this article. Having a clear understanding of the genesis of sales and use tax nexus, will better enable you to address fact-specific nexus questions that relate to your […]
Jesse W. McClellan, Esq., Principal, obtained another favorable decision on behalf of his client at the Board hearings held in Culver City on February 24, 2016. His second victory at the Board level hearings, which are held monthly, in the last three months.
The case involved an audit of a California based manufacturer of ink and related products used in the textile industry. The Board’s auditor disallowed numerous claimed exempt sales for resale for a variety of different reasons. Most of the disallowed transactions were resolved prior to the hearing, but the audit […]
The Board of Equalization is in the process of making changes to Regulation 1702.5, Responsible Person Liability, which is the regulation that addresses the Board’s ability to pursue collection action against individuals for sales and use tax owed by closed businesses. Any meaningful changes to the regulation will have a significant impact on California taxpayers, because the changes will impact the State’s ability to hold individuals personally responsible for unpaid sales and use tax obligations. Over the past several years, personal liability collection efforts by the […]
This month, Jesse W. McClellan, Esq, co-founder of McClellan Davis and featured contributor at Sales Tax Support writes about sales tax and construction contractors. Sales Tax Support publishes articles written by experts and thought leaders in the specialized field of sales and use tax with small and medium sized business owners in mind.
Visit salestaxsupport.com to read Jesse’s informative article “Construction Contractors as Consumers When Installing Property of Others?”
California recently joined the majority of states when it enacted a partial sales and use tax exemption for property purchased for use in manufacturing and research and development. The exemption is established under Revenue and Code section 6377.1, as further explained under Sales and Use Tax Regulation 1525.4 with an effective date of July 1, 2014. The exemption is subject to a two hundred million annual cap, and it effectively reduces the tax rate by approximately four percent (4%) to the otherwise applicable rate. It actually applies to a rather broad scope of industries and even extends to real property […]