Mazzeffi & Company

Tax Alerts

Tax Briefing(s)

2018 Year-End Tax Planning Tax Reform 2.0 2018 Post-Filing Season Update Congress Approves Sweeping Tax Overhaul

Guidance on Tax Treatment of Uncashed Retirement Distribution Checks
The IRS has ruled that an individual who receives a retirement distribution check from a qualified plan is taxed in the year of receipt even if the check is not cashed. In addition, the employer&rsquo...

IRS Launches New “Tax Withholding Estimator”
The IRS has launched the "Tax Withholding Estimator," an expanded, mobile-friendly online tool designed to make it easier to have the right amount of tax withheld during the year. It replace...

Estimated Tax Penalty Automatically Waived for Some Taxpayers
The IRS announced that it will automatically waive the estimated tax penalty for more than 400,000 eligible taxpayers who have already filed their 2018 federal tax returns but did not claim the waiver...

Virtual Currency Owners Sent Letters To Pay Back Taxes, File Amended Returns
The IRS has sent letters to taxpayers who may have potentially failed to report income from their virtual currency transactions, urging them to review their tax filings, amend past returns and pay bac...

IRS Advises Tax Debt Holders on Passport Revocations
The IRS has urged taxpayers to resolve their significant tax debts and avoid putting their passports in jeopardy by contacting the IRS to avoid delays in their travel plans.Under the Fixing America&rs...

IRS Updates Premium Tax Credit Table, Required Contribution Percentage
The IRS has updated the applicable percentage table used to calculate an individual’s premium tax credit and required contribution percentage for plan years beginning after 2019. The percentage ...

Rates Used in Computing Special Use Value Issued
A listing of the average annual effective interest rates on new loans under the Farm Credit System has been issued by the IRS. The rates are used in computing the special use value of farm real proper...

Draft 2019 Form 1040 and Form 1040-SR Released
The IRS has recently released an updated draft 2019 Form 1040, U.S. Individual Income Tax Return, with fewer schedules than the 2018 form. The draft of the widely-used return is the second major overh...

IRS Unveils Updated Draft 2020 Form W-4
The IRS has released an updated, newly named draft Form W-4 for 2020. Once finalized, the revised form is expected to become effective on January 1, 2020.Evolution of the W-4Following enactment of the...

AL - City of Tuscaloosa increases local tax rates
Effective October 1, 2019, the city of Tuscaloosa increases its local Alabama sales and use tax rates.New RatesThe rates for the following increase as indicated:general items (from 2% to 3%);admission...

AK - Governor calls for constitutional amendments in sos address
In his first State of the State (SOS) address, Alaska Gov. Michael J. Dunleavy announced three constitutional amendments he plans to introduce. The amendments, which will be what he called "the f...

AZ - Guidance on tax issues affecting married and divorced taxpayers updated
The Arizona Department of Revenue has released a revised publication that provides general information with respect to the income tax issues affecting married and divorced taxpayers. The topics addres...

AR - Assessment sustained for failure to substantiate business expense deductions
For Arkansas corporate income tax purposes, a taxpayer was partly not entitled to tax deductions for tax years at issue because he failed to meet his burden of proof. Generally, a taxpayer is allowed ...

CA - Interstate unitary business denied refund for alleged commerce clause violation
An interstate unitary business was not entitled to a refund of California corporation franchise tax to remedy an alleged Commerce Clause violation.The business argued that California unconstitutionall...

CO - Remote seller had substantial nexus for sale of exempt products
A remote seller doing business in Colorado had substantial nexus with Colorado and had to collect and remit state sales tax.Meeting the thresholdThe remote seller manufactured and sold baked goods for...

CT - Legislative changes affecting corporation business tax discussed
The Connecticut Department of Revenue Services has issued a notice that summarizes legislative changes affecting corporation business tax. The notice explains:How the tax calculated on a company&rsquo...

DE - Estimated tax exemption created for pass-through entity real estate sales
Nonresident pass-through entities must pay estimated tax on income and gain from the sale or exchange of Delaware real estate. A nonresident pass-through entity must pay the tax before the state recor...

DC - Notice issued on increase in transfer and recordation tax rates
The District of Columbia has issued a notice providing information regarding increase in transfer and recordation tax rates for deeds relating to commercial (class 2) properties where consideration is...

FL - Businesses filing corporate or franchise tax returns must report additional information
Businesses filing Florida corporate income or franchise tax return (Form F-1120 or F-1120A) for any tax year beginning during the 2018 or 2019 calendar year, must report additional information from ea...

GA - Q4 local rate change announced
Effective October 1, 2019, Johnson County, Georgia, discontinues a 1% SPLOST, decreasing its total tax rate from 8% to 7%. Important Bulletins, Georgia Department of Revenue, September 3, 2019...

HI - Motion picture, digital media, and film production tax credit cap increased
Hawaii increased its motion picture, digital media, and film production tax credit cap from $35 million to $50 million. The increase applies to tax years beginning after 2018. Act. 275 (S.B. 33), Laws...

ID - Withholding tables updated for 2019
The Idaho State Tax Commission has updated income tax withholding tables for 2019. The Commission advises that it is not necessary to adjust withholding back to the beginning of 2019, but that the tab...

IL - Illinois working day withholding rules adopted
Illinois adopted new rules for withholding personal income tax from employees. This includes a threshold based on the number of working days that employees spend in Illinois.Current Withholding RulesE...

IN - Taxpayers were required to include canceled debt on income tax return
Indiana personal taxpayers were required to include canceled debt on their 2015 individual income tax return for the discharge of debt on a qualified principal residence. In this matter, the Indiana D...

IA - DOR offers taxation of digital products and services guidance
The Iowa Department of Revenue has issued guidance regarding Iowa’s digital products and services tax. The guidance comes in response to S.F. 2417, the extensive state tax reform bill, which was...

KS - NAICS code publication updated
The Kansas DOR has updated its North American Industry Classification System (NAICS) code publication used for sales and corporate income tax. The codes are required to complete various sales and use ...

KY - SST taxability matrix and certificate of compliance updated
The Kentucky DOR has reissued the state’s Streamlined Sales and Use Tax (SST) taxability matrix and certificate of compliance for 2019. The matrix and certificate are effective August 1, 2019.&n...

LA - Louisiana's constitutional prohibition against taxation on prescription drugs included medical devices
The Louisiana Court of Appeal (court) reversed the Board of Tax Appeals’ (board’s) grant of summary judgment to the Department of Revenue (department) because it was established that the c...

ME - Taxpayer service hours will change starting August 1, 2019
Maine Revenue Services (revenue) announced that beginning August 1, 2019, it is changing taxpayer service hours to better serve taxpayers and tax professionals for corporate income, personal income, s...

MD - Nexus properly established as subsidiary lacked economic substance
An intellectual holding company and wholly-owned subsidiary of a multi-national producer and marketer of processed foods was confirmed to have sufficient contacts with Maryland to establish the requir...

MA - Guidance on international TCJA provisions finalized
Massachusetts finalized corporate excise and personal income tax guidance on selected international provisions in the Tax Cuts and Jobs Act (TCJA). It replaces draft guidance that explains how Massach...

MI - Disabled individuals and their families may be eligible to open MiABLE account
For personal income tax purposes, the Michigan Department of Treasury (department) reminds disabled individuals of all ages and their families that they may be eligible to open savings accounts under"...

MN - Owner of corporation personally liable for unpaid tax
The owner (taxpayer) of a corporation that operated retail kiosks was personally liable for the corporation’s unpaid Minnesota sales tax because he was responsible for filing tax returns and mak...

MS - Notice regarding military spouses residency relief act issued
For personal income tax purposes, the Mississippi Department of Revenue issued a notice informing spouses of military personnel who moved to Mississippi due to the servicemember spouse being posted fo...

MO - Motor vehicle taken in trade as credit or part payment for business equipment reduced sale price on which tax was computed
The value of a motor vehicle taken in trade by a motor vehicle leasing company (taxpayer) as a credit or part payment for a computer or other business equipment reduced the sale price on which Missour...

MT - Full deduction allowed for dividends received from 80/20 companies
A taxpayer in a water’s edge combined group was entitled to a 100% exclusion under the Montana corporate income tax for dividends received from 80/20 companies.Law Does Not Address Actual Divide...

NE - Frequently asked questions for military spouses, their employers updated
For personal income tax purposes, the Nebraska Department of Revenue updated frequently asked questions (FAQs) for military spouses and their employers. Among others, the FAQs discuss: (1) the impact ...

NV - Legislation relating to transferable tax credits for affordable housing amended
The State of Nevada has amended its law to enact provisions authorizing the Housing Division of the Department of Business and Industry to issue transferable tax credits that are authorized to be take...

NH - DRA provides summary of 2019 legislation
For taxes it administers, the New Hampshire Department of Revenue Administration (DRA) has released a summary of the 2019 legislative session. The release is for informational purposes and is only int...

NJ - Clarification regarding allocation of GILTI and FDII issued
New Jersey issued a clarification regarding its corporation business tax Technical Bulletin TB-92. New Jersey clarifies the following points:while foreign derived intangible income (FDII) has been new...

NM - Guidance regarding film production tax credit issued
The New Mexico Taxation and Revenue Department issued guidance regarding the film production tax credit for corporate income tax purposes. For film production companies that commence principal photogr...

NY - Petition denied because of untimely filing of request for conciliation conference
A taxpayer's request for a conciliation conference with the New York Division of Taxation's Bureau of Conciliation and Mediation Services to protest a notice of determination of New York sales and use...

NC - North Carolina enacts tax relief for nonresident businesses to facilitate disaster response
Corporate income tax, personal income tax, franchise tax, unemployment tax, and motor fuel tax and regulatory relief is enacted for nonresident businesses that come into North Carolina immediately aft...

ND - Brochure regarding tax incentives updated
An updated North Dakota Office of Tax Commissioner brochure describes various corporate income, sales and use, and property tax incentives for businesses.Corporate income tax incentives discussed in t...

OH - Protest denied for failure to show assessment was overestimated
A corporate income taxpayer was properly subject to an Ohio commercial excise tax assessment because the taxpayer failed to establish that the assessment was overestimated. In this matter, the taxpaye...

OK - OTC provides information on upcoming enhanced encryption
The Oklahoma Tax Commission (OTC) has issued a notice informing taxpayers that it will begin enforcing stricter communication encryption methods from September 1, 2019, to ensure the highest possible ...

OR - Taxpayers entitled to mileage and meals deductions
A married couple’s (taxpayers’) Oregon personal income tax deductions for unreimbursed employee business expenses for the tax year 2015 were partly denied because they failed to provide su...

PA - Filing requirements for caloric and non-caloric beverages discussed
Pennsylvania has issued guidance for distributors, registered dealers and special dealers (taxpayers) regarding Philadelphia Beverage Tax (PBT) filing requirements for caloric and non-caloric beverage...

RI - Paint stewardship assessment subject to tax
The statutory paint stewardship assessment that funded a nonprofit company’s (taxpayer’s) downstream transportation and disposal costs of leftover paint was subject to Rhode Island sales t...

SC - Interest rate remains the same for overpayments and underpayments
Through December 31, 2019, the South Carolina interest rate on underpayments of taxes remains 5%. The refund rate for overpayments remains 2%. Information Letter 19-22, South Carolina Department ...

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 - Charges for web-based information database service are not subject to tax
Charges for access to a web-based information database service are not subject to Tennessee sales and use tax.How Do Customers Access the Web-Based Information Database?The taxpayer:compiles data;stor...

TX - Eligibility for reduced Texas franchise tax rate revised under amended rule
Texas rule changes may affect taxpayers’ eligibility for a reduced Texas franchise tax rate. Taxable entities primarily engaged in retail or wholesale trade qualify for the reduced rate. An enti...

UT - Double taxation of Utah residents' foreign income allowed
Utah could tax residents’ foreign income without allowing related income tax deductions. The taxpayers, S corporation shareholders, had claimed deductions for income earned in other states and f...

VT - Fact sheet on health care fund contribution assessment updated
The Vermont Department of Taxes (DOT) has updated a fact sheet providing guidance for employers regarding collection of the health care fund contribution assessment by the DOT. The fact sheet provides...

VA - Taxpayers required to file local appeal with county and await final determination of commissioner
For Virginia business, professional and occupational license (BPOL) tax purposes, taxpayers were required to file a local appeal with the County and await the final determination of the Commissioner o...

WA - Washington explains taxability of bitcoin transactions
Transactions involving the receipt of bitcoin for the exchange of goods or services are subject to Washington sales tax and business and occupation (B&O) tax.Bitcoin PaymentsWhere the seller immed...

WV - Business and occupation tax exemption enacted for merchant power plants
A merchant power plant is exempt from the West Virginia business and occupation tax imposed on businesses that:generate or produce electricity for sale, profit, or commercial use, either directly or i...

WI - Withholding rates unchanged for 2019 and 2020
The current Wisconsin withholding tax rates will continue for 2019 and 2020. Notice, Wisconsin Department of Revenue, August 20, 2019...

WY - SST taxability matrix and certificate of compliance updated
Wyoming updated its Streamlined Sales and Use Tax (SST) Agreement taxability matrix and certificate of compliance. The changes are effective August 1, 2019. Taxability Matrix, Wyoming Department ...