Mazzeffi & Company

Tax Alerts

December 01, 2020

Tax Briefing(s)

2020 Post-Election Tax Policy Update 2020 Year-End Tax Planning 2020 Payroll Tax Deferral Order 2020 Post-Filing Season Update CARES Act Coronavirus Tax Relief

Warning: New COVID-Related Tax Scam
The IRS, state tax agencies and the tax industry have warned of a new text scam that tricks taxpayers into disclosing bank account information under the guise of receiving the $1,200 economic impact p...

New Relief Helps Taxpayers Settle Tax Debts
The IRS has announced changes to help struggling taxpayers impacted by Coronavirus Disease 2019 (COVID-19) more easily settle their tax debts. Under the new Taxpayer Relief Initiative:Taxpayers who qu...

IRS Encourages E-Filing of Payroll Tax Returns
The IRS recommends e-filing of employment tax returns—Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, Form 941, Employer's Quarterly Federal Tax Return, Form 943, Employer’s An...

IRS Releases Draft Form 1065 Instructions on Capital Reporting
The IRS released an early draft of the instructions to Form 1065, U.S. Return of Partnership Income, for tax year (TY) 2020. The draft included revised instructions for partnerships required to repo...

IRS SBSE Released Fiscal 2021 Focus Guide
The IRS Small Business and Self-Employed (SBSE) business unit has released its Fiscal 2021 Focus Guide, titled "It’s Still the Time," to lay out the compliance and service strategies for the comin...

AL - Change in city of Winfield lodgings tax locality code
Effective with the period ending October 31, 2020, due on or before November 20, 2020, the city of Winfield local Alabama lodging tax (general rate and room fee) and rental tax should be remitted usin...

AK - Interest rate announced for Q4 of 2020
The Alaska interest rate for delinquent taxes and overpayment of taxes is set at 5.50%, compounded quarterly, for the period April 1, 2020, through December 31, 2020. The Department of Revenue posting...

AZ - Arizona voters approve income tax increase for education
Arizona voters at the November 3, 2020 general election approved Proposition 208, which increases income taxes on top earners to boost funding for teachers and education programs. Proposition 208 impo...

AR - Voters approve constitutional amendment making local tax permanent
Uncertified results show that Arkansas voters approved Issue 1, authorizing a constitutional amendment making a 0.5% local sales and use tax (first authorized in 2012), permanent. The revenue is dedic...

CA - Voters approve classification of app-based rideshare and delivery drivers as independent contractors
California voters at the November 3, 2020 general election approved Proposition 22, which classifies app-based rideshare and delivery drivers as independent contractors, rather than employees or agent...

CO - Colorado voters approve tax rate decrease measure
According to unofficial results, Colorado voters approved a ballot measure to decrease the tax rate from 4.63% to 4.55% for the following:corporate income tax;personal income tax; andpersonal income t...

CT - Resumption of non-judicial municipal tax sales announced
Connecticut Governor has issued an executive order that allows the resumption of certain non-judicial municipal tax sales for property tax purposes. The order permits municipalities, districts, and wa...

DE - Hazardous substances cleanup tax rate for 2021 announced
Delaware has announced that the hazardous substance cleanup tax rate for 2021 is 0.9067%. Effective January 1, 2021, the new tax rate will apply to the taxable gross receipts from the sale of petroleu...

DC - Electronic insurance premiums tax filing information released
The District of Columbia has released information regarding its move to the OPTins standardized electronic filing system for the insurance premiums tax.OPTins InformationEffective on September 25, 2...

FL - Sumter county tourist development tax repealed
Beginning October 1, 2020, the Sumter County, Florida tourist development tax is repealed. On October 13, 2020, the Sumter County Board of County Commissioners approved Ordinance No. 2020-13. The ordi...

GA - Georgia issues film tax credit guidance during covid-19
Georgia has released guidance on the expenses that qualify for the corporate income tax film credit during the COVID-19 pandemic.Qualifying CostsCosts incurred during the COVID-19 shutdown qualify for...

HI - Credit distribution rule adopted
Hawaii has adopted a rule indicating how to distribute an income tax credit to partners, S corporation shareholders, or beneficiaries of an estate or trust. The rule applies when Hawaii law:does not s...

ID - 2021 circuit breaker program addressed
The annual property tax reduction (or "circuit breaker") program available to qualified homeowners (including mobile homeowners and residents of a care facility or nursing home) who both own and live...

IL - Voters reject constitutional amendment on graduated rates
Illinois voters rejected a ballot measure proposing an amendment to the Illinois Constitution that would allow graduated personal income tax rates.Amendment ProposalThe amendment would have authorized...

IN - Protest denied for failure to substantiate claimed research expenses
An Indiana recreational vehicle manufacturer was properly denied research expense corporate income tax credits as the taxpayer did not prepare, maintain, retain, or present records necessary to substa...

IA - Certain filing deadlines extended due to Derecho storm
The Iowa Department of Revenue (department) announced that certain corporate income, personal income, and trust income tax filing and payment deadlines falling between August 10, 2020 and December 15,...

KS - Digital currency transactions explained
The Kansas Department of Revenue has provided sales and use tax guidance on transactions relating to digital currency.Digital CurrencyTransaction fees for digital currency exchanges are not considered...

KY - Interest rate decreases in 2021
For 2021, the interest rate the Kentucky Department of Revenue charges on unpaid taxes is 5%. This a 2% decrease from the current 2020 interest rate of 7%. Kentucky Department of Revenue website, Nov...

LA - Louisiana enacts one-time credit for restaurants and bars affected by covid-19
Louisiana has enacted a one-time refundable credit against corporate and personal income tax for certain restaurants and bars affected by the COVID-19 pandemic.Credit AmountThe credit is equal to the ...

ME - 2021 tax rates, withholding tables, and standard deduction and personal exemption amounts announced
A November 2020 issue of the Maine Tax Alert contains the 2021 state personal income tax rate schedules, standard deduction, and personal exemption amounts. Additionally, the alert notes that the 20...

MD - Collection on hold until covid-19 emergency; taxpayers may receive tax liability notifications
The Office of the Maryland Comptroller (comptroller) will mail notifications to certain tax filers of unpaid tax liabilities that were due July 15 (the extended deadline from the traditional April 15 ...

MA - Taxpayer failed to protest within statutory deadline; appeal denied
A taxpayer’s appeal against Massachusetts personal income tax assessments was denied as untimely. The taxpayer filed a total of four abatement applications pertaining to the assessments at issue; ho...

MI - Prepaid fuel rates unchanged
Beginning December 1, 2020, Michigan’s prepaid sales tax rate on fuel remains unchanged. From December 1, 2020 through December 31, 2020, the prepaid rate for gasoline is 10.4 cents per gallon. The ...

MN - Nobles and lake of the woods counties impose local taxes
Beginning January 1, 2021, the following new local taxes will be administered by the Minnesota Department of Revenue:Nobles County 0.5% transit sales and use tax; andLake of the Woods County 3% lodgin...

MS - Taxpayer's appeal dismissed for lack of jurisdiction
For property tax purposes, the Mississippi Court of Appeals dismissed the taxpayer’s appeal for lack of jurisdiction because the notice of appeal was untimely filed. The taxpayer claimed that he wou...

MO - Voters approve additional tax levy in city of ST. Louis
According to unofficial election results, voters in the city of St. Louis, Missouri, approved an additional property tax levy of 6 cents per each $100 of assessed valuation. This is in addition to the...

MT - Voters approve marijuana ballot measures
According to unofficial results, Montana voters have approved Initiative No. 190 which expands marijuana legalization to allow for possession, use and growing of limited amounts of marijuana for adult...

NE - Voters approve tax on casino gambling at racetracks
Uncertified results show that Nebraska voters have approved Initiative 431, authorizing a 20% annual tax on gross gaming revenue from games of chance operated at licensed racetracks.The text of chang...

NV - Parts of 2019 Nevada MBT legislation invalidated
Portions of a 2019 Nevada law (S.B. 551) affecting the rates of the modified business tax have been invalidated. The law had resulted in Nevada continuing to impose its modified business taxes on empl...

NH - NH to challenge MA taxation of NH remote workers
Governor Chris Sununu has directed the New Hampshire Department of Justice to file a law suit in the United States Supreme Court challenging a Massachusetts’ rule that imposes Massachusetts' income ...

NJ - Voters legalize recreational use cannabis, subject to state sales tax
According to unofficial election results, New Jersey voters approved a constitutional amendment that legalizes the personal (non-medical) use of a controlled form of marijuana called "cannabis", by a...

NM - Regulation to include amended returns while claiming refund was inconsistent with statute
A large company with subsidiaries (taxpayer) timely filed its New Mexico corporate income tax refund claim as the New Mexico Taxation and Revenue Department's (department’s) regulations and the appl...

NY - Receipts from digital advertising campaign management platform are taxable
An out-of-state corporation’s receipts from its digital advertising campaign management platform are subject to New York sales and use tax.Taxability of Digital Advertising Campaign Management Platf...

NC - Updates to filing penalties on informational returns for motor, alternative fuels discussed
For motor fuel tax purposes, North Carolina has issued a notice on filing penalties on informational returns for motor fuels and alternative fuels. In 2018, the legislature passed a law increasing the...

ND - Local tax change effective January 1, 2021 announced
North Dakota has announced an upcoming local sales and use tax rate change that is effective January 1, 2021.BinfordThe City of Binford will impose a city sales, use, and gross receipts tax of 2% effe...

OH - Interest rates announced
For calendar year 2021, the Ohio interest rate for underpayments and overpayments of income tax and sales and use taxes decreases to 3.0%. The interest rate for personal property tax and estate tax de...

OK - Local rates announced
Oklahoma local sales and use tax rate changes have been announced effective January 1, 2021.City Rate ChangesKingfisher decreases its sales and use tax rate from 3.335% to 3%.Manchester imposes a new ...

OR - Income tax regulations set for hearing
Oregon has released a number of proposed regulations for hearing that for the following taxes:corporate activity tax;corporate income (excise) tax;personal income tax; andwithholding tax.Proposed Regu...

PA - Philadelphia withholding guidance updated
Philadelphia has updated its wage tax policy guidance for non-resident employees to remove guidance regarding non-resident withholding it included earlier this year. The updated guidance no longer sta...

RI - FAQs issued on health insurance mandate reporting requirements
The Rhode Island Division of Taxation has issued answers to frequently asked questions on health insurance mandate reporting requirements for entities. Effective January 1, 2020, all Rhode Island resi...

SC - Capital investment tax credit claim properly subject to annual limitation
A utility company providing electrical power to state citizens was properly subject to South Carolina Capital Investment Tax Credit limitation for corporate income tax purposes. In this matter the Sou...

SD - Voters approve amendment to legalize and tax recreational marijuana
According to unofficial results, South Dakota voters approved a constitutional amendment that:legalizes recreational marijuana; andimposes a 15% excise tax on sales of recreational marijuana.The excis...

TN - Short-term rental unit marketplaces must collect occupancy taxes
Effective January 1, 2021, short-term rental unit marketplaces are required to collect and remit Tennessee local occupancy taxes for short-term rental units rented through a marketplace.Registration a...

TX - Taxpayer's payment was not flow-through sales commissions; refund properly denied
A taxpayer’s Texas franchise tax refund claim was properly denied as the taxpayer’s payment at issue did not qualify as "sales commissions."Generally, a taxable entity must exclude from its total...

UT - 2021 interest rate for underpayment and overpayment is 2%
In its updated publication on interest and penalties for many of the taxes it administers, the Utah State Tax Commission announced that the interest rate for underpayment and overpayment of taxes and ...

VT - Deduction created for dispensaries and cannabis establishments
Vermont has enacted a corporate and personal income tax deduction for dispensaries and cannabis establishments, applicable to taxable years beginning after 2021. The deduction is equal to the amount o...

VA - Reporting requirements for form 1099-k filers discussed
Payment settlement entities required to submit Form 1099-K to the IRS are now generally required to submit duplicates to the Virginia Department of Taxation. Specifically, Virginia law now requires th...

WA - Municipal annexations announced
Beginning January 1, 2021, the following Washington cities have imposed annexations that may impact businesses’ sales and use tax rates: Forks, La Center, Vancouver, Moses Lake, Federal Way, Winthro...

WV - Guidance discusses overview of personal income, corporate income, other tax credits
The West Virginia published an overview of currently available personal income tax credits, corporate income tax credits, and other credits and incentives. The publication, among other issues, discuss...

WI - Rate reductions, withholding, and covid-19 telecommuting discussed
For 2020, Wisconsin has reduced the personal income tax rates for the first and second brackets to 3.54% and 4.65%. However, there are currently no plans to change the withholding tax rates.COVID-19 T...

WY - Local lodging rate changes announced
Local lodging rate changes in Wyoming have been announced effective January 1, 2021.County Rate ChangesBig Horn county imposes a lodging tax at a rate of 2%.Lincoln county imposes a lodging tax at 2%....