Mazzeffi & Company

Tax Alerts

Tax Briefing(s)

2019 Tax Year in Review Consolidated Appropriations Act, 2020 2019 Year-End Tax Planning 2019 Post-Filing Season Update

IRS Updates Rules on Using Per Diem Rates to Substantiate Expenses Incurred Away from Home
The IRS has updated Rev. Proc. 2011-47 to reflect changes made by the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97).The guidance provides the rules for determining the amount of an employee's ordinary a...

Electronic Filing Now Required for Requesting Unused Low-Income Housing Credit Carryover
The IRS has released guidance to qualified states regarding how to request an allocation of unused housing credit carryover under Code Sec. 42(h)(3)(D)(iii). The new guidance requires allocation reque...

IRS Extends Certain Deadlines, Penalty Relief for Health Coverage Forms
Health insurance providers (including employers and health insurance companies) now have until March 2, 2020, to furnish to individuals Form 1095-B, Health Coverage, and Form 1095-C, Employer-Provided...

Interim Amendments for Hardship Distributions Clarified and Deadline Extended
The IRS has clarified which amendments are integral to a plan provision that fails to satisfy the qualification requirements by reason of a change made by the final hardship distribution regulations. ...

2019 Required Amendments List for Employee Plans
The IRS has issued its 2019 Required Amendments List (2019 RA List) for individually designed employee retirement plans. Beginning with the 2019 list, all RA Lists will apply to both Code Sec. 401(a) ...

Date Extended for Applying Foreign Branch Rules
A one-year extension has been granted for applying the Code Sec. 987 final regulations, and certain related final and temporary regulations covering foreign branch transactions of U.S. corporations. T...

Guidance Updated for Making Adequate Disclosure
The IRS has updated its guidance that identifies circumstances under which a disclosure on a taxpayer’s income tax return with respect to an item or position is "adequate" for reducing the under...

IRS Releases 2020 Inflation-Adjusted Tax Tables, Other Amounts
The IRS has released the annual inflation adjustments for 2020 for over 60 tax provisions, including the income tax rate tables. The IRS issues these cost-of-living adjustments (COLAs) each year to re...

2020 Inflation Adjustments for Pension Plans, Retirement Accounts
The IRS has released the 2020 cost-of-living adjustments (COLAs) for pension plan dollar limitations, and other retirement-related provisions.Highlights of 2020 ChangesThe contribution limit for emplo...

IRS Updates Guidance on Computing Deductions for Operating a Vehicle
The IRS has released guidance that updates Rev. Proc. 2010-51, I.R.B. 2010-51, 883 to reflect changes made to Code Secs. 67 and 217 by the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97). Rev. Proc. 2010-...

Accounting Method Change Procedures Updated
The IRS has released guidance listing the specific changes in accounting method to which the automatic change procedures in Rev. Proc. 2015-13, I.R.B. 2015-5, 419, apply. This guidance updates and sup...

Proposed Updated RMD Tables Issued
The IRS has proposed updated life expectancy and distribution period tables under the required minimum distribution (RMD) rules. The proposed tables reflect the general increase in life expectancy, an...

Joint Directive on Work Opportunity Tax Credit Issued
The IRS Large Business and International Division (LB&I) and Small Business/Self-Employed Division (SBSE) have issued a joint directive to provide instructions to LB&I and SBSE examiners on th...

New LB&I Campaign on Deferred Foreign Income
The IRS Large Business and International (LB&I) has added a new active campaign to the IRS website called "IRC 965." The campaign’s goal is to promote compliance with Code Sec. 965, Treatmen...

IRS Highlights Steps For Smooth Processing of Taxpayers' 2019 Federal Tax Returns
The IRS urged taxpayers to act now to ensure the smooth processing of their 2019 federal tax return. This reminder, first in a series, was aimed to help taxpayers get ready for the upcoming tax filing...

AL - Alabama changes start date for new procedures for claiming incentives
Beginning January 21, 2020, taxpayers must follow new procedures to claim some economic incentives on Alabama income tax returns. Previously, the Department of Revenue said that the starting date for ...

AK - Interest rate announced for Q1 of 2020
The Alaska interest rate for delinquent taxes and overpayment of taxes is set at 7.50%, compounded quarterly, for the period January 1, 2020, through March 31, 2020. The Department of Revenue posting ...

AZ - Unused tax credits set for repeal
For taxable years 2020 and after, Arizona will not allow corporate taxpayers to claim income tax credits for:employment by a healthy forest enterprise (Form 332)agricultural pollution control equipmen...

AR - Taxpayer not entitled to border city exemption
A taxpayer was not entitled to the border city exemption from Arkansas personal income tax because he failed to meet his burden of proof. In this matter the Arkansas Department of Finance and Administ...

CA - Taxpayer’s petition for rehearing dismissed
For California sales and use tax purposes, a taxpayer’s petition for rehearing was dismissed because the grounds set forth by the taxpayer did not constitute good cause for a new hearing. Genera...

CO - State and local sales and use tax rate changes announced
The Colorado Department of Revenue has announced state and local sales and use tax rate changes that are effective January 1, 2020.State Sales and Use Tax ChangeColorado’s service fee is set at ...

CT - Filing reminder issued for attorney occupational tax return
The Connecticut Department of Revenue Services has issued a press release reminding taxpayers that attorney occupational tax returns are due on January 15, 2020. Taxpayers, including exempt taxpayers,...

DE - Withholding tax due dates for 2020 announced
The Delaware Division of Revenue has released the withholding tax due dates for the 2020 eighth-monthly, monthly, and quarterly filers. Taxpayers filing electronically must initiate the transactions a...

DC - 2020 tax filing season changes discussed
The District of Columbia reminds personal income taxpayers of changes in effect for the 2020 tax year. Some of the issues discussed include:the tax filing deadline is April 15, 2020;discontinuation of...

FL - 2020 motor fuel tax rates announced
For calendar year 2020, Florida state motor fuel (gasoline) and diesel fuel tax rates are increased while the aviation fuel tax rate remains at its current rate.2020 Motor Fuel Tax RateEffective Janua...

GA - Title Ad valorem tax rate reduced
The Georgia title ad valorem tax rate (TAVT) is reduced.Title Ad Valorem Tax Rate ChangesThe following changes apply to vehicles purchased or sold on or after January 1, 2020:the TAVT rate is reduced ...

HI - Form changes, county surcharge increase, e-Filing requirements updated for 2020
Beginning January 1, 2020, the Hawaii Department of Taxation (department) has updated its forms to implement new rates, laws, and processes for personal income tax returns. These forms are identified ...

ID - W-2 E-filing guide updated
For corporate and personal income tax purposes, Idaho State Tax Commission issued W-2 E-Filing Guide clarifying that the state does not make changes to taxpayers’ record layouts or other require...

IL - Instructions updated for residential schedules
The Illinois Department of Revenue, in accordance with provisions of the state property tax code, has released updated instructions for residential schedules. The pricing schedules in the publication ...

IN - Indiana adopts emergency market-based sourcing rules
Indiana has adopted emergency regulations explaining and implementing market-based sourcing of receipts from the provision of services and other intangibles. Indiana adopted market-based sou...

IA - Business interest expense conformity guidance issued
Iowa conforms with IRC Sec. 163(j) business interest expense deduction limitations in 2019. However, because Iowa did not conform in 2018, some taxpayer may still need to make certain adjustments to t...

KS - Rule on coins and bullion revoked
As a result of the exemption for coins and bullion applicable as of July 1, 2019, the Kansas sales and use tax regulation on the taxability of coins and bullion has been revoked.The revocation can be ...

KY - Selling farmers tax credit program launched
Kentucky has launched Kentucky Selling Farmer Tax Credit (KSFTC) program that offers farmers incentives for selling their property to beginning farmers. The state will begin accepting credit applicati...

LA - Assessor's valuation of property affirmed, no abuse of discretion
For property tax purposes, the Louisiana Court of Appeal reversed the district court’s decision because there was no abuse of discretion by the parish assessor's in his assessment of the taxpaye...

ME - 2020 withholding tables published
Maine Revenue Services (MRS) has issued a Tax Alert stating that the 2020 individual income tax withholding tables are available at its website. Further, the alert informs taxpayers that Form W-4ME ha...

MD - Taxpayer’s in-state activities not protected by solicitation immunity
For Maryland corporate income tax purposes, the Tax Court (court) properly denied an out-of-state pet food retailer’s (taxpayer’s) request for a refund, because its employees’ busine...

MA - Final guidance on IRC Sec. 163(j) interest expense limitation issued
Massachusetts issued final guidance for corporate excise taxpayers on the IRC Sec. 163(j) business interest expense (BIE) limitation.What Is the BIE Limitation?Under IRC Sec. 163(j), a taxpayer's busi...

MI - Acquisition of partnership interests entitled taxpayer to claim investment tax credits
A group’s acquisition of partnership interests pursuant to a bankruptcy settlement entitled it to claim Michigan investment tax credits. Michigan allows the credit for increased investment in as...

MN - 2020 Minnesota withholding materials issued
For corporate and personal income taxpayer purposes, the Minnesota Department of Revenue (department) has issued a press release discussing withholding tax material for 2020 tax year. Starting 2020 ta...

MS - Notice regarding credit for donations to eligible charitable organizations issued
The Mississippi Department of Revenue (department) issued a notice providing information about the Children’s Promise Act, which authorized a corporate income and personal income tax credit for ...

MO - Taxpayer owes cities' license taxes, not entitled to attorney fees
For gross license tax purposes, the Missouri Supreme Court affirmed in part and reversed in part the judgment of the trial court and determined that the trial court erred in awarding prejudgment inter...

MT - Deductions for charitable contributions discussed
The Montana Department of Revenue issued a release informing personal income taxpayers regarding a tax deduction for charitable contributions. Taxpayers who itemize their deductions may reduce their 2...

NE - Frequently asked questions for withholding tax updated
The Nebraska Department of Revenue has updated frequently asked questions (FAQs) for personal income tax withholding on its website. The FAQs discuss, among other topics, filing of tax withholding, sp...

NV - Clark county tax increase coming
Nevada’s most populated county, Clark County, will soon see a sales and use tax increase.Sales Tax Rate IncreaseEffective January 1, 2020, Clark County’s sales and use tax rate will be 8.3...

NH - Guidance provided on taxability of electronic cigarettes
The New Hampshire Department of Revenue Administration has provided guidance on the taxability of electronic cigarettes under a recently enacted legislation. H.B. 4 amends the definition of "toba...

NJ - Assessed interest rate on outstanding balances for 2020 updated
The New Jersey Division of Taxation has issued a technical bulletin stating that the assessed interest rate on outstanding tax balances for the period January 1, 2020 to December 31, 2020, is 7.75%. T...

NM - Taxpayer failed to overcome presumption of correctness of assessment
A taxpayer was properly subject to New Mexico sales and use tax, penalties, and interest because it failed to overcome the presumption of correctness attached to the assessment. Generally, receipts fr...

NY - New York corporation could not exclude royalties from foreign affiliates
In computing entire net income under the New York corporate franchise tax, the parent corporation of a worldwide group of companies could not exclude royalties received from certain foreign affiliates...

NC - Department requests additional information for refund claims based on Kaestner decision
The North Carolina Department of Revenue (department) has issued a notice requesting additional information from personal income taxpayers who submitted a timely request for a refund of an overpayment...

ND - Information return electronic filing discussed
North Dakota has issued a reminder that employers with 10 or more employees are required to electronically file W-2 and 1099 forms beginning with returns due on January 31, 2020.Businesses with fewer ...

OH - Municipal net profit tax return is due January 15, 2020
The Ohio Department of Taxation (department) has reminded all municipal net profit tax (MNPT) practitioners and taxpayers that the return for taxpayers with a September fiscal year-end is due January ...

OK - Q2 local rate changes announced
Additional Oklahoma local sales and use tax rate changes have been announced effective April 1, 2020.City Rate ChangesMoore increases its sales and use tax rate from 3.75% to 3.875%.Noble increases it...

OR - Taxpayers changing their state withholding must use Oregon’s OR-W-4 form
For corporate income tax purposes, the Oregon Department of Revenue has informed taxpayers that any changes to their state withholding must be made on Form OR-W-4 beginning January 1, 2020 as the new ...

PA - Taxpayers may submit community development corporation lottery application on January 14, 2020
For corporate income tax purposes, the Philadelphia Department of Revenue (department) has announced that taxpayers who want to participate in community development corporation (CDC) tax credit lotter...

RI - Pass-through entity level tax FAQs issued
Rhode Island provides answers to some frequently asked questions (FAQs) about the entity-level income tax that pass-through entities can elect to pay for tax years beginning after 2018.The entity-leve...

SC - Increased job tax credit for tier III and IV counties discussed
For corporate, personal, trust, and excise tax purposes, the South Carolina Department of Revenue issued a revenue ruling on the increased job tax credit amount for Tier III or IV counties. The ruling...

SD - Publication discusses various sales and use tax topics
The South Dakota Department of Revenue has updated a publication addressing various sales and use tax topics. The updated publication includes information on remote sellers and marketplace sellers. Th...

TN - Sale and installation of modular cleanroom subject to tax
The sale and installation of a modular cleanroom was subject to Tennessee sales and use tax because the cleanroom remained tangible personal property (TPP) after installation. Generally, the sale and ...

TX - Texas adopts economic nexus threshold for franchise tax
Texas has adopted an economic nexus threshold for its franchise tax. This means that a foreign (non-Texas) taxable entity might have franchise tax nexus even if it has no physical presence in the stat...

UT - Local rate changes announced
Utah announced the following local sales and use tax rate changes, effective January 1, 2020.Local Option TaxBrighton Town (newly incorporated town in Salt Lake County) imposes a 1% local option tax.T...

VT - Publication on processing of tax refund reissued
The Vermont Department of Taxes (department) has reissued a fact sheet discussing factors that may affect the processing time for personal income tax refunds. The fact sheet covers the most common fac...

VA - Tax assessments issued against taxpayer adjusted
The Tax Commissioner (commissioner) made certain adjustments to the Virginia sales and use tax assessments issued against a global provider of networking and telecommunications equipment and supplies ...

WA - Taxability of firearms transfers explained
Licensed out-of-state firearms dealers with nexus with Washington must collect sales and use tax and retailing business and occupation (B&O) tax.Out-of-state DealersNexus is established by a physi...

WV - Sunset date of tourism development act extended
The sunset date of the West Virginia Tourism Development Act, which provides a credit against sales and use tax or corporation income tax, is extended from January 1, 2020, to January 1, 2026. The dev...

WI - Guidance on pass-through withholding and composite return updated
For corporate income tax purposes, the Wisconsin Department of Revenue updated its fact sheet providing guidance on pass-through withholding and composite returns. The fact sheet provides a general ov...

WY - Sale of business taxable because value of assets transferred was less than 80%
A taxpayer was properly subject to Wyoming sales and use tax on the sale of its business to a third party (buyer) because the taxpayer did not transfer at least 80% of its business assets to the buyer...