Mazzeffi & Company

Tax Alerts

September 30, 2020

Tax Briefing(s)

2020 Tax Policies of the Major Presidential Candidates 2020 Payroll Tax Deferral Order 2020 Post-Filing Season Update CARES Act Coronavirus Tax Relief

IRS Reminds Taxpayers Who Missed July 15 Deadline to File Now to Avoid Penalties
The IRS has reminded taxpayers who missed the July 15 deadline without requesting an extension about some important tips, including filing electronically as soon as possible to reduce potential penalt...

Interest Payments Coming to Timely Filers
The Treasury and IRS announced on August 18 that they were to start sending interest payments to about 13.9 million individual taxpayers who timely filed their 2019 federal income tax returns and are ...

Processing Pending Payments During COVID-19
The IRS has warned taxpayers that if they mailed checks (either with or without tax returns), the checks may still be unopened in the backlog of mail that it is processing due to COVID-19. Any payment...

IRS Reopens Registration Period for Economic Impact Payments for Certain Federal Beneficiaries
The IRS has announced that it will reopen the registration period for federal beneficiaries who did not receive $500 per child payments earlier this year, as it continues to look for ways to look for ...

Taxpayers Can File Form 1040-X Electronically
The IRS has announced that taxpayers can now submit Form 1040-X electronically with commercial tax filing software. Until now, taxpayers were required to mail a completed Form 1040-X to the IRS for pr...

IRS Reminds Individuals: Unemployment Compensation Taxable
The IRS has reminded individuals receiving unemployment compensation (beneficiaries) that they can have tax withheld from their benefits now to help avoid owing taxes on this income when they file the...

Taxpayers Urged to Renew Expiring ITINs
The IRS announced that more than one million Individual Taxpayer Identification Numbers (ITINs) will expire at the end of 2020. ITINs are used by people who have tax filing or payment obligations unde...

IRS Reminds Employers of Payroll Service Provider Options
The IRS has reminded employers of their options when it comes to choosing payroll service providers. The IRS also summarized the different types of third party providers available, including:payroll s...

AL - Daily use range fees subject to tax
A shooting range operator (taxpayer) was required to remit Alabama sales and use tax on the admission fees it charged to use it’s shooting range. In this matter, the taxpayer operated seven outdoor ...

AK - Interest rate announced for Q3 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 September 30, 2020. The Department of Revenue postin...

AZ - Taxpayers warned against phishing scams
The Arizona Department of Revenue (department) urges employers to be cautious of phishing and other email scams. Generally, scammers will disguise themselves in an attempt to access and abuse sensitiv...

AR - Taxpayers retained sufficient interest in trust; properly subject to assessment
Arkansas income of a trust was properly imputed to personal income taxpayers’ return as the taxpayers retained sufficient interest in the trust. Generally, income from grantor controlled trusts are ...

CA - California enacts small business hiring credit enacted
California has enacted a small business hiring credit for taxable years beginning on or after January 1, 2020, and before January 1, 2021. The credit provides some financial relief to small businesses...

CO - Permanent regulations defining "internal revenue code" adopted
The Colorado Department of Revenue has adopted permanent income tax regulations to clarify that the term "internal revenue code" incorporates changes to federal statutes on a prospective basis. The ...

CT - Guidance on filing and paying taxes electronically updated
Connecticut has updated guidance it provides on the requirement to electronically file and pay taxes. The types of taxes that must be filed and paid electronically along with the methods of filing and...

DE - City of Lewes authorized to impose lodgings tax
The city of Lewes is authorized to impose and collect a local Delaware lodgings tax of up to 3%. Ch. 275 (S.B. 210), Laws 2020, effective August 6, 2020...

DC - Denial of exemption for temple reversed and remanded
For District of Columbia property tax purposes, the superior court’s erred in dismissing a trust’s (taxpayer’s) exemption petition for failure to state a claim upon which a tax exemption could b...

FL - Publication on information to update address/jurisdiction database issued
For sales and use tax purposes, the Florida Department of Revenue (department) has issued a tax information publication discussing the time and manner in which counties are required to submit informat...

GA - Cares act guidance released
Georgia has updated its income tax guidance to address CARES Act changes made for qualified improvement property.Federal ChangeThe CARES Act included a technical correction for qualified improvement p...

HI - Property tax credit deadline approaching
As previously reported, Hawaii residents are reminded that the City & County of Honolulu offers a real property tax credit to property owners who meet certain eligibility requirements. The applica...

ID - Filing and payment deadlines extended for victims of hurricane Laura, California wildfires, and Iowa Derecho
For taxes it administers, the Idaho State Tax Commission has announced deadline extensions to file and pay taxes for victims of Hurricane Laura, the California wildfires, and the Iowa derecho from des...

IL - Tentative champaign county multiplier announced for 2020
The tentative Champaign County equalization factor (multiplier) for Illinois property tax purposes has been set for 2020 at 1.0000. The final 2019 multiplier was 1.0000.The full text of the release is...

IN - Research expense credit properly denied
For corporate and personal income tax purposes, the Indiana Department of Revenue (department) issued a letter ruling determining that an Indiana based pole building contractor (taxpayer) failed to es...

IA - Taxpayers' activities on farmland not sufficient to meet material participation threshold
Taxpayers were properly subject to additional Iowa personal income taxes resulting from the sale of farmland as the taxpayers failed to prove material participation in the cash-farm-lease activities t...

KS - Interest rates announced
A Kansas Department of Revenue memorandum announces the interest rates for county property tax payments and refunds for calendar year 2021. For late payments of real property taxes by taxpayers, the i...

KY - Resolution altering restaurant tax payment void as it was procedurally defective
For Kentucky sales and use tax purposes, a resolution which purported to alter the payment and remittance of the restaurant tax to the tourist commission was procedurally defective and therefore, not ...

LA - Opinion on hotel occupancy tax responsibilities released
For Louisiana sales and use tax purposes, the Attorney General issued an opinion discussing hotel occupancy taxes owed to the Natchitoches Parish Tourist Commission (Tourist Commission). Further, the ...

ME - General information bulletin on sales, fuel, and special tax updated
Maine issued an updated bulletin containing important information for taxpayers subject to sales, use, service provider, and other special taxes. The bulletin, among other topics, discusses applicabil...

MD - Unauthorized insurance company not subject to corporate income tax
On remand, the Maryland Tax Court held that an unauthorized insurance company was exempt from state corporate income taxation under Title 4 of the Insurance Article. The exemption language under Title...

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 - Reminder issued to use digital signatures on tax forms
The Michigan Department of Treasury (Treasury) has reminded tax professionals and taxpayers that they can use digital signatures on tax forms, even forms that cannot be filed electronically because of...

MN - Taxpayer-husband abandoned domicile; assessment reversed
The Minnesota Tax Court reversed a personal income tax assessment against taxpayers as the taxpayer-husband established that he was a nonresident during the tax years at issue. In this matter the taxp...

MS - Taxpayers permitted to claim broadband credit against aggregate tax liability
For Mississippi corporate income tax purposes, an affiliated group of members (taxpayers) were permitted to claim broadband credits to 50 percent of their aggregate franchise tax liability and the tot...

MO - Taxpayer not entitled to casualty loss refund
A taxpayer was not entitled to a refund of Missouri motor vehicle sales tax paid on her purchase of a new motor vehicle because the purchase was not due to the casualty loss of her old vehicle. Genera...

MT - Rules adopted on credits for film and other media productions
Montana adopted rules to implement the income tax credits allowed for film, television, and related media production companies. The new rules specifically address: definitions; media production tax cr...

NE - Personal property exemption eliminated
The Nebraska personal property exemption for the first $10,000 of valuation of a taxpayer’s personal property is eliminated in tax year 2020 and beyond. County assessors need not send a valuation ch...

NV - Nevada enacts tax amnesty program and temporary acceleration of net proceeds tax on minerals
New legislation requires the Nevada Department of Taxation to establish a tax amnesty program for delinquent taxpayers. It also accelerates payment of the net proceeds tax due for minerals.Tax Amnesty...

NH - Interest rates decrease for 2021
Interest rates on underpayments and refunds of New Hampshire taxes will decrease for 2021.For 2021, rates are:5% for underpayments (down from 7% for 2020); and2% for refunds (down from 4% for 2020).Te...

NJ - New Jersey adopts sourcing rule for sales of services
New Jersey issued corporation business tax regulations addressing apportionment of receipts from service transactions. Sales are apportioned to New Jersey if the benefit of the service is received by ...

NM - Taxpayer failed to establish gross receipts were not business income; protest denied
A taxpayer’s protest against a New Mexico sales and use tax assessment was denied because the taxpayer failed to establish that the gross receipts at issue were not generated through "business inco...

NY - Untimely conciliation conference request denied
Taxpayers were denied a refund of New York personal income tax because the taxpayer’s request for a conciliation conference with the Bureau of Conciliation and Mediation Services (BCMS) following th...

NC - North Carolina creates deduction for extra credit grants
North Carolina legislation created a personal income tax deduction for amounts received under the Extra Credit Grant Program.What Is the Extra Credit Grant Program?The Extra Credit Grant Program uses ...

ND - Local tax change announced
North Dakota has announced an upcoming local sales and use tax rate change that is effective October 1, 2020.ThompsonThompson will impose a city sales, use, and alcohol gross receipts tax of 2%. Rele...

OH - Business income deduction properly denied
A married couple was properly denied business deduction as the taxpayer-husband failed to establish that he was an "investor" in his mother’s accounting firm for Ohio personal income tax purposes....

OK - Additional local rate changes announced
Additional Oklahoma local sales and use tax rate changes have been announced effective October 1, 2020.City Rate ChangesBennington imposes a new use tax at a rate of 4.0%. Carlton Landing imposes a ne...

OR - Unemployment benefits are taxable
The Oregon Department of Revenue (department) reminds personal income taxpayers that unemployment benefits are taxable, and the taxpayers must consider having tax withheld from their benefits to avoid...

PA - No Philadelphia property reassessments for tax year 2022
The City of Philadelphia has announced that due to operational concerns caused by the COVID-19 pandemic, it will forgo a citywide reassessment of all property values for Tax Year 2022. The decision me...

RI - Division announces acceptance of electronic signatures in limited cases
Effective immediately, the Rhode Island Division of Taxation will allow electronic signatures in place of handwritten signatures for certain personal income withholding forms. The use of an electronic...

SC - Interest rate for overpayments and underpayments unchanged
From September 30, 2020 through December 31, 2020, the South Carolina interest rate on underpayments of taxes remains 3%. The refund rate for overpayments remains 0%. Information Letter 20-25, South ...

SD - Updates on taxability of telecommunication services discussed
South Dakota updated its sales and use guidance on telecommunication services explaining how sales and use tax applies to telecommunication and ancillary services. Effective July 1, 2020, internet acc...

TN - Effect of cares act provisions in Tennessee discussed
The federal CARES Act amended IRC Sec. 168 to reduce the MACRS recovery period of qualified improvement property from 39 years to 15 years, thereby making such property eligible for federal bonus depr...

TX - Sale of unprocessed sand not taxable
The Texas Comptroller of Public Accounts (comptroller) issued a private letter ruling stating that the sale of sand by sand sellers (taxpayers) was not subject to sales tax because the taxpayers’ ac...

UT - Received in response to covid-19 exempted from Utah tax
Utah will not tax certain amounts received by taxpayers in response to COVID-19. The tax relief applies for tax years beginning on or after January 1, 2020, for amounts received as:a forgiven loan und...

VT - Listing of zip codes for towns with local option sales tax updated
Vermont has released an updated list of towns where the local option sales tax applies. A 1% local option tax must be collected in addition to the 6% Vermont sales tax for any sales within or delivere...

VA - Manufacturing company not allowed to make election retroactively; protest denied
For sales and use tax purposes, a Virginia manufacturer’s request to claim modified apportionment method for manufacturers for the taxable years ended March 31, 2014, and March 31, 2015, was not gra...

WA - Exemption for data centers with multiple buildings explained
The Washington Department of Revenue has issued guidance on application of the data center sales and use tax exemption to centers composed of multiple buildings.Qualifying TenantsThere are a total of ...

WV - Rules implement coal severance tax rebate
The West Virginia coal severance tax rebate is available to taxpayers that make a capital investment in new machinery and equipment that results in an increase in coal production. The rules sunset eff...

WI - Machinery, tools, and patterns used in manufacturing not entitled to exemption
For Wisconsin personal property tax purposes, any machinery, tools, and patterns (MTP) used in any way in manufacturing are not exempt. In this case, the Wisconsin Department of Revenue found that the...

WY - SST certificate of compliance updated
Wyoming has updated its Streamlined Sales and Use Tax (SST) Agreement certificate of compliance. The changes are effective August 1, 2020. SST Certificate of Compliance, Wyoming Department of Revenue...