Mazzeffi & Company

Tax Alerts

Tax Briefing(s)

2012 Tax Year-in-Review

American Taxpayer Relief Act of 2012

Overall individual taxpayer audit rate drops for fiscal year 2012, along with IRS budget
The IRS recently issued its annual Data Book for fiscal year (FY) 2012, which provides the most recent statistical information on examinations, collections and other activities. The IRS's compariso...

Report describes seasonal workers, variable hour employees under healthcare reform’s Employer Mandate
The Patient Protection and Affordable Care Act (PPACA) requires certain “applicable large employers” that do not offer affordable, minimum essential health care coverage to their full-t...

Shareholder must reduce basis in S corp in first year basis adequate to absorb suspended losses
The U.S. Court of Appeals for the District of Columbia Circuit recently affirmed the Tax Court's decision that the Tax Code requires a married couple to reduce their basis in an S corp to account f...

IRS issues final rules on broker reporting of debt instruments and options
The IRS has issued final, temporary and proposed regulations on the requirement that brokers report the basis of debt instruments and options that they sell on behalf of customers. The regulations ...

Medical clinic’s “advances” to newly hired physicians were compensation and not loans
A medical clinic attempted to avoid its liability for employment taxes on compensation paid to newly hired physicians by classifying the payments as "loans." The clinic offered the loans in the amo...

AL - Market-based sourcing rule issued
The Alabama Department of Revenue has issued a new rule providing guidance for multistate business taxpayers when sourcing sales of services rendered to individual and unrelated bu...

AK - Tax bracket adjustments, film tax credit changes approved by legislature
The Alaska House of Representatives has approved Senate legislation that, if signed by Gov. Sean Parnell, would impose the corporation income tax according to the following rates and brackets:...

AZ - Corrections bill enacted
The Arizona Legislature has enacted legislation that corrects errors, strikes obsolete language, and makes clarifying and conforming changes to the Arizona Revised Statutes that ar...

AR - Tax rate reductions approved by legislature
Arkansas Gov. Mike Beebe has signed legislation that imposes the personal income tax according to the following rates and brackets:$0 to $4,099 of net income: 0.9%;...

CA - FTB follows IRS payment extension for taxpayers affected by Boston marathon explosions
The Franchise Tax Board (FTB) has announced that California individual income taxpayers affected by the April 15, 2013 Boston Marathon explosions will be given late payment penalty...

CO - Taxpayers denied Colorado-source capital gain subtraction
The Colorado Department of Revenue has issued a private letter ruling holding that the taxpayer, a limited liability corporation (LLC) formed to develop, own, and operate a private...

CT - Audit examination policy for retail transactions discussed
The Connecticut Department of Revenue Services has established a policy to minimize the potential multiple taxation of retail sales where audit examinations of a retailer and of a retail customer d...

DE - Reminder issued for seniors seeking credit
The Delaware Department of Finance is reminding seniors that the requirements have changed this year for the Senior School Property Relief Program. Through the program, homeowners ...

DC - Statute of limitations barred assessment despite filing of an incorrect tax return
The District of Columbia Court of Appeals held that the three-year statute of limitations barred the Office of Taxation and Revenue (OTR) from assessing a beverage company for unpa...

FL - Expired statutes removed
The Florida Legislature has enacted a bill that removes several repealed and expired corporate income tax statutes. Notably, the bill removes the statute governing the Jobs for the...

GA - Contractor forms revised
The Georgia Department of Revenue has revised Form ST-C 214-2 (Application for Subcontractor’s Sales and Use Bond), Form ST-C 214-8 (Nonresident Contractor’s Consent to...

HI - Senate passes bill to repeal temporary tax rate increase ahead of schedule
The Hawaii Senate has passed a bill that would repeal the temporary increase in individual income tax rates established by Act 60, Laws 2009, one year ahead of the scheduled sunset...

ID - Guidelines issued concerning taxation of income earned on reservations by American Indians
The Idaho State Tax Commission has issued guidelines concerning the personal income tax treatment of income earned on reservations by American Indians. As previously reported, the ...

IL - Rule on presumption of residence amended
The Illinois Department of Revenue has amended a regulation providing guidance on the factors and evidence creating a presumption that an individual is a resident of Illinois for p...

IN - Some sales to foreign country subject to throwback rule
The Indiana throwback rule was applicable to some of a company’s sales of items shipped to various foreign countries. The company was a manufacturer of precision food cutting...

IA - State high court denies exemptions, primary agricultural purpose not found
Iowa property tax agricultural exemptions were denied for taxpayers’ two houses for two different years in question since the taxpayers did not show that the houses were prim...

KS - Legislation amends and clarifies policies enacted in 2012
Kansas Gov. Sam Brownback has signed legislation repealing a provision enacted during the 2012 legislative session that requires taxpayers who are partners or S corporation shareho...

KY - Third-party purchaser complied with requirements for notice to owner
The Kentucky Court of Appeals reversed a circuit court ruling denying the ability of a third-party purchaser of delinquent property tax bills (appellant) to recover penalties, inte...

LA - Musical and theatrical production credit rules amended
The Louisiana Department of Economic Development has amended rules governing the musical and theatrical production credits against the corporate and personal income tax to bring th...

ME - Dollar threshold for small claim requests lowered
Maine legislation amends statutory provisions regarding who may appeal a reconsideration decision to the Maine Board of Tax Appeals by changing what constitutes a “small clai...

MD - Biotechnology investment credit amended
Legislation has been enacted that expands the definition of “qualified Maryland biotechnology company” for purposes of the biotechnology investment tax credit available...

MA - Guidance provided for taxpayers affected by Boston marathon explosions
The Massachusetts Department of Revenue has provided additional guidance regarding the automatic extensions of time granted to taxpayers affected by the Boston Marathon explosions ...

MI - Flow-through entity withholding provisions revised
Michigan’s flow-through entity withholding provisions for the corporate income tax are revised. If a flow-through entity receives an exemption certificate from a member other...

MN - Introduced legislation would repeal multistate tax compact provisions
Legislation introduced in the Minnesota House of Representatives and in the Senate would, if enacted, repeal the state’s Multistate Tax Compact provisions for Minnesota corporate franchise (i...

MS - Prekindergarten program support credit enacted
Mississippi has enacted legislation that creates a credit against the corporate and personal income tax for contributions paid to qualified prekindergarten programs. As part of leg...

MO - Interest rate on refunds unchanged for third quarter 2013
The interest rate is 0.7% on all qualifying Missouri tax refunds for the period July 1, 2013, to September 30, 2013, the Missouri State Treasurer has advised the Missouri Director ...

MT - Department of Revenue authorized to serve notices of levy electronically
Montana legislation allows the Department of Revenue to issue a notice of levy for collection of delinquent taxes electronically upon written consent of the recipient, usually an e...

NE - State high court finds postage meter mark was postmark, appeal timely filed
Nebraska property tax appeals were timely filed, even though the appeals were re-mailed and did not arrive until days after the due date of September 15, because the postage meter ...

NV - ACH credits now accepted by the department
The Nevada Department of Taxation has announced that it will begin to accept ACH credits as a method of payment for taxes. Interested taxpayers need to contact AJ Somers at 775-684...

NH - Research and development credit discussed
The New Hampshire Department of Revenue Administration has issued a technical information release discussing the research and development credit that is available against the busin...

NJ - Proposed amendments to sourcing of services rule discussed
The New Jersey Division of Taxation has proposed to amend the corporate business tax rule addressing the sourcing rules for services performed in the state. The new rule would appl...

NM - Correction: amendments to high-wage jobs credit applicable June 14, 2013
Recently enacted New Mexico corporate income tax reform legislation generally tightens the eligibility requirements for the high-wage jobs credit. The changes apply to credit claim...

NY - Nuclear power plant operator not entitled to investment tax credits
In a New York corporate franchise tax case, a taxpayer that operated nuclear power plants was not entitled to investment tax credits (ITCs) and other related credits with respect t...

NC - DOR provides answers to frequently asked questions concerning the net business income deduction
The North Carolina Department of Revenue has issued a publication in which it responds to a series of frequently asked questions (FAQs) concerning the personal income tax net busin...

ND - Research credit provision enacted to address effect of federal credit expiration
Under recently enacted North Dakota legislation affecting the corporate and personal income taxes, a new provision has been added concerning the effect of the expiration of the fed...

OH - House passes bill containing click-through, affiliate nexus provisions
Legislation has been passed in the Ohio House of Representatives that would, if enacted, add click-through and affiliate nexus provisions to the sales and use tax laws....

OK - Credit for clean-burning motor fuel property amended
Legislation has been enacted amending the tax credit for investments in qualified clean-burning motor vehicle fuel property available against Oklahoma corporate and personal income...

OR - Deferral program for seniors and disabled modified
Oregon has enacted legislation regarding the seniors and disabled tax deferral program that makes clarifications and allows certain taxpayers with a reverse mortgage to remain in t...

PA - Philadelphia amends interest, penalty, other provisions
Effective January 1, 2014, Philadelphia interest rate and penalty provisions on unpaid taxes are amended. In addition, effective April 17, 2013, limitations provisions regarding ac...

RI - Reminders issued for Form RI-1065 filers
The Rhode Island Division of Taxation reminds corporate income tax filers of Form RI-1065, Partnership Income Return, that they must use Form RI-7004 to request an extension. In pr...

SC - Guidance provided on sales to federal employees, diplomats, and nonprofit employees
The South Carolina Department of Revenue has provided guidance on the application of sales tax to purchases by (1) employees of the federal government, including instrumentalities ...

SD - Collection allowance credit provisions revised
The provisions regarding South Dakota sales and use tax collection allowance credits have been revised and expanded. For returns filed and taxes remitted after January 1, 2014, per...

TN - Bill to reduce food rate sent to Governor
The Tennessee General Assembly has passed legislation that would reduce the sales and use tax rate applicable to food and food ingredients from 5.25% to 5%. H.B. 193, as passed by ...

TX - Extensions offered to taxpayers affected by fertilizer plant explosion
The Texas Comptroller of Public Accounts has offered 90-day extensions on all state taxes for taxpayers in McLennan County who are affected by the fertilizer plant explosion in the...

UT - Business personal property publication updated
The Utah State Tax Commission has updated its publication on business personal property taxes. Topics covered include assessment, valuation, appeals, and audits. ...

VT - House passes tax reform legislation
The Vermont House has passed tax reform legislation that, if enacted, would make significant changes to Vermont tax law, including changes to the personal income tax rate and deduc...

VA - Dependents of service members did not qualify for in-state tuition
The Virginia Attorney General has concluded that neither the dependent of a service member that has been ordered on an unaccompanied deployment with a “follow-on duty station” in Virgin...

WA - Guidance provided on taxability of pharmacy sales
The Washington Department of Revenue has released a sales and use tax chart that reflects the types of pharmacy sales that are subject to sales tax. Sales of the following items ar...

WV - Federal conformity updated
West Virginia Gov. Earl Ray Tomblin has issued a proclamation calling the Legislature into a First Extraordinary Session to consider legislation that includes local sales and use t...

WI - Acknowledgments of e-filed returns may be delayed
The Wisconsin Department of Revenue has issued a personal income tax notice announcing that, because of the large volume of electronic tax returns filed on or near April 15, 2013, ...

WY - County board properly dismissed protest appeal for lack of subject matter jurisdiction
The Wyoming State Board of Equalization agreed that the decision of a county board of equalization to dismiss a taxpayer’s protest appeal of a local property tax assessment n...

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