Mazzeffi & Company

Tax Alerts

May 01, 2021

Tax Briefing(s)

American Rescue Plan Act of 2021 2020 Tax Year-In-Review Consolidated Appropriations Act, 2021 (revised)2020 Post-Election Tax Policy Update

Window Closing on Nonfilers’ 2017 Refunds
The IRS announced that unclaimed income tax refunds worth more than $1.3 billion await an estimated 1.3 million taxpayers who did not file a 2017 Form 1040. Most of these taxpayers must file by May 17...

IRS Announces Issuance of Refunds and Recalculation of Taxes
The IRS has announced steps to automatically refund money this spring and summer to taxpayers who filed their tax returns reporting unemployment compensation before the recent changes made by the Amer...

Child Tax Credit Advance Payments to Begin in July
Speaking before the Senate Finance Committee at an April 13 hearing on the 2021 Filing Season and the 21st Century IRS, IRS Commissioner Charles “Chuck” Rettig said that the IRS fully anticipates ...

Updated Instructions on Reporting Unemployment Exclusion
The IRS has updated its instructions for reporting unemployment exclusions for 2020. If an individual taxpayer’s modified adjusted gross income (AGI) is less than $150,000, the American Rescue Plan ...

IRS Answers FAQs on RRCs
The IRS has been mailing letters to some taxpayers who claimed the 2020 recovery rebate credit (RRC) and may be getting a different amount than they expected.The IRS reminders taxpayers that the first...

IRS Issues FAQs on Reporting of COVID-19 Emergency Financial Aid Grants by Students and Higher Education Institutions
The IRS has issued FAQs on how students and higher education institutions should report pandemic-related emergency financial aid grants. Emergency financial aid grants made by a federal agency, stat...

IRS Updates Audit Techniques Guide on Retail Industry Examinations
The IRS has updated an Audit Techniques Guide (ATG) on its website that addresses conducting income tax examinations in the retail industry. An ATG focuses on developing highly trained examiners for p...

AL - Job creation incentives extended and expanded
Alabama enacted legislation extending and expanding several job creation incentives. The incentives may offset the following taxes:income taxes;financial institution excise tax;insurance premium tax; ...

AK - Refund claim denied as untimely
For Alaska corporate income tax purposes, a corporation and its subsidiaries (taxpayer) was properly denied the taxpayer’s refund claim as untimely. In this matter, the taxpayer identified underrepo...

AZ - Estimated tax payments not required in 2021 to account for new surcharge tax
Taxpayers do not have to make Arizona estimated individual income tax payments in 2021 to account for the new 3.5% surcharge tax added by Proposition 208. Taxpayers will not incur a penalty for the un...

AR - Arkansas enacts pass-through entity level tax
Effective for tax years beginning on or after January 1, 2022, Arkansas pass-through entities may elect to pay income taxes at the entity level.Tax RateThe tax rate for electing entities is 5.9% of ne...

CA - Proposition 19 intergenerational transfer exclusion questions and answers provided
The California State Board of Equalization (BOE) provides answers to a number of property tax questions regarding Proposition 19. According to the BOE, there are a number of significant questions left...

CO - Department issues guidance on taxable unemployment benefits
The Colorado Department of Revenue has issued guidance on the state’s conformity to the federal American Rescue Plan Act, which exempts a portion of unemployment benefits received in 2020 from feder...

CT - Connecticut enacts covid-19 remote worker legislation
Connecticut enacted legislation that addresses the tax implications of employees working remotely during the COVID-19 emergency. The legislation includes provisions that cover:corporation business tax...

DE - New law revises calculation process for new castle county property tax rates
The Delaware Governor signed a law revising the calculation process New Castle County property tax rates. The law:restructures the calculation process for the New Castle County tax rate for real prope...

DC - Troops serving in dc receive tax exemption
A temporary sales and use tax exemption is available to deployed state and federal troops providing security to the District of Columbia. The exemption applies to hotel stays for the troops during the...

FL - Guidance on 1099-K reporting requirements issued
Florida issued guidance on 1099-K income tax reporting requirements for:credit companies; andthird-party settlement organizations (TPSOs).Reporting RequirementsEffective January 1, 2021, credit card c...

GA - IRC conformity bill signed
Georgia has enacted legislation updating its corporate and personal income tax Internal Revenue Code (IRC) conformity date.IRC Conformity DateThe new IRC conformity date incorporates federal tax law c...

HI - New long-term rental exemption and classification
The County of Maui, Hawaii has announced that a new long-term rental classification and exemption have been established as part of the Maui County Code. Effective January 1, 2022, real property occupi...

ID - Grocery sales tax credit and refund discussed
The Idaho State Tax Commission has issued a press release informing personal income taxpayers that they can claim a credit against their income tax for a portion of the sales tax they paid on grocerie...

IL - Taxpayer was the officer responsible to file and pay corporation's tax liability
A taxpayer was liable for a corporation’s Illinois sales and withholding taxes because she had check-signing authority, was responsible for paying all the creditors and making bank deposits, and was...

IN - Department incorrectly assessed tax on out-of-state taxpayer's sales
An out-of-state taxpayer’s protest against Indiana sales and use tax assessment was sustained because the taxpayer met its burden of establishing that the Department of Revenue’s (department) asse...

IA - Withholding filing clarified
Iowa is adopting a rule for income tax filers to clarify withholding electronic filing requirements and clarifying a filing deadline.Due DateIowa adopted a rule in 2019 to move the annual deadline for...

KS - Kansas privilege tax interest income deduction created
Kansas created a deduction for interest income on certain loans by financial institutions subject to the privilege tax.Eligible Loans and InterestBanks, trust companies, and savings and loan associati...

KY - Guidance issued on assessment of motor vehicles
Kentucky has issued guidance on the property tax assessment of motor vehicles. Motor vehicles are assessed utilizing a mass appraisal process. The guidance provides information on the assessment proce...

LA - Exemption for charitable, educational assistance provided to entrepreneurs discussed
For Louisiana property tax purposes, the Attorney General has opined that the real estate owned by two separate organizations for charitable or educational assistance provided to entrepreneurs may qua...

ME - Changes to 2020 individual tax forms discussed
Maine Revenue Services has issued a Tax Alert discussing significant changes to 2020 individual income tax forms. In addition to certain line update changes, Schedule PTFC/STFC has been revised to ref...

MD - Maryland subjects digital products to tax
The Maryland Legislature voted to override Gov. Larry Hogan’s veto of a bill that subjects digital products to sales and use tax. The legislation was vetoed by Gov. Hogan on May 7, 2020.A digital pr...

MA - Covid-19 telecommuting rules finalized
Massachusetts adopted final personal income tax sourcing rules that apply to wage income of employees working remotely during the COVID-19 emergency. 830 CMR 62.5A.3, Massachusetts Department of Reve...

MI - Tax tribunal correctly denied taxpayer's petition for lack of jurisdiction
The Michigan tax tribunal did not err by dismissing the taxpayer’s petition because the Board of Review did not have jurisdiction over the taxpayer’s eligible manufacturing personal property (EMPP...

MN - Information provided on filing for homestead credit refund
The Minnesota Department of Revenue has issued a release informing tax professionals to use the taxpayers’ Statement of Property Taxes Payable in 2021 when filing the Homestead Credit Refund (for Ho...

MS - Legislation to phase out personal income tax passes house
The "Mississippi Tax Freedom Act of 2021," which would phase out the personal income tax while increasing sales and use and tobacco tax rates, has passed the House of Representatives. If enacted, th...

MO - Mandatory municipal arena fee on hotel rooms taxable
A mandatory municipal $1.50 arena fee that hotels are required to collect and remit is subject to Missouri sales tax. The mandatory arena fee must be paid by hotel customers as part of their room char...

MT - New or expanded industry credit repealed
Montana has repealed the corporate income tax credit for new or expanded industry, effective October 1, 2021. Ch. 15 (S.B. 45), Laws 2021, effective as noted...

NE - Local rate changes announced
Nebraska has announced local sales and use tax rate changes effective July 1, 2021.Local Rate ChangesHumphrey will increase its rate from 1.5% to 2%.Manley will start a new tax at a rate of 0.5%.Munic...

NV - Home office credit ended December 31; tax treatment of credit discussed
Nevada taxpayers previously issued a 2020 estimated Home Office credit amount based on the previous year’s Ad Valorem may apply the Home Office Credit to the 2020 Insurance Premium Tax Reconciliatio...

NH - Market based sourcing rules adopted
New Hampshire has adopted business profits tax (BPT) and business enterprise tax (BET) regulations to adopt the market-based sourcing method of apportioning sales of services and intangibles. New Hamp...

NJ - Automatic extension for 2020 CBT returns for certain filers discussed
New Jersey has updated its guidance regarding automatic extensions for some 2020 corporation business tax return filers. New Jersey passed legislation late in 2020 that changed the original due date o...

NM - Guidance issued on 2020 income rebate and temporary gross receipts tax deduction for prepared food
The New Mexico Taxation and Revenue Department has issued guidance on the personal income tax rebate of $600 and the temporary gross receipts tax (GRT) deduction for food and beverage establishments.2...

NY - Taxpayer whose property straddled border was Yonkers resident
The Department of Taxation and Finance issued an advisory opinion stating that a taxpayer and his wife were residents of Yonkers, as opposed to New York City, for purposes of paying personal income ta...

NC - 2021 withholding tables and instructions released
The North Carolina Department of Revenue (department) has released the 2021 personal income tax withholding tables and instructions for employers. The tables and instructions have been updated to ref...

ND - Annual oil trigger price adjustment for 2021 announced
North Dakota has announced the annual oil trigger price adjustment for oil extraction tax purposes.Oil Trigger PriceThe oil trigger price is $89.65 for the calendar year January 1, 2021, through Decem...

OH - Valuation upheld due to insufficient evidence
An Ohio Board of Revision’s property tax valuation of a taxpayer’s property was upheld because the taxpayer’s reduction claim was not supported by sufficient evidence. The taxpayer argued that t...

OK - 2020 income tax deadline extended
Oklahomans now have until June 15, 2021 to pay their 2020 individual and business income taxes, and their first quarter 2021 estimated income tax payments.Storm ExtensionAs a result of the recent disa...

OR - Unemployment tax relief discussed
Oregon has recommended that personal income taxpayers impacted by the federal unemployment tax relief wait for further information from the IRS and Oregon before taking action. This includes those who...

PA - Governor commits to phasing out gas tax
Pennsylvania Gov. Tom Wolf has reiterated his commitment to phase out Pennsylvania’s gas tax, which is becoming an unreliable source for funding Pennsylvania’s vast transportation network. To make...

RI - Taxpayer's motion for summary judgment due to existence of genuine issue of material fact
For Rhode Island property tax purposes, the taxpayer’s motion for summary judgment was denied because there existed a genuine issue of material fact concerning whether the taxpayer’s property was ...

SC - Interest rate for overpayments and underpayments unchanged
Through June 30, 2021, the South Carolina interest rate on underpayments of taxes remains 3%. The refund rate for overpayments remains 0%. Information Letter 21-5, South Carolina Department of Revenu...

SD - Deadline for assessment freeze applications approaching
An elderly or disabled South Dakota individual has until April 1, 2021, to apply for property tax relief under the state's Assessment Freeze for the Elderly and Disabled Program. An application, which...

TN - Taxpayer's sale of individual membership not subject to tax
A taxpayer was not required to pay Tennessee sales and use tax on the fees it charged for individual memberships in its professional membership organization because professional memberships are not li...

TX - Publication discussing manufacturing exemptions issued
For Texas sales and use tax purposes, the Comptroller of Public Accounts issued a publication discussing manufacturing exemptions. Generally, state sales and use tax exemptions are available to taxpay...

UT - Protest denied as taxpayers were domiciled in Utah
A married couple (taxpayers) was properly assessed Utah personal income tax for the 2015 tax year because they were domiciled in Utah and thus were Utah full-year residents during that period. General...

VT - Treatment of forgiven PPP loans discussed
Vermont announced that forgiven Paycheck Protection Program (PPP) loans will be not taxable if the Vermont Legislature passes legislation linking up to the federal tax code. The Tax Department’s for...

VA - IRC conformity updated
Virginia enacted legislation advancing the IRC conformity date under the corporate and personal income taxes from December 31, 2019, to December 31, 2020. Accordingly, Virginia generally conforms to t...

WA - Employees engaged in recycling qualified for processing for hire classification
A company that provides employees to businesses in the recycling industry qualified for Washington’s processing for hire business and occupation (B&O) tax classification because its employees en...

WV - Personal income tax rate reduction bills introduced
West Virginia legislators introduced two bills to implement Gov. Jim Justice’s proposals that would reduce personal income tax rates and make other significant tax changes. H.B. 2027 and S.B. 600...

WI - Taxpayer failed to establish nonresident status
For personal income tax purposes a taxpayer was not a nonresident of the state because he failed to show that he resided anywhere other than Wisconsin and also has a valid Wisconsin driver’s license...

WY - Valuation of well site, gathering system equipment upheld for failure to overcome presumption of correctness
For Wyoming property tax purposes, the assessor's valuation of the taxpayers’ well site equipment, and gathering system equipment was affirmed because the taxpayer failed to overcome the statutory p...