Mazzeffi & Company

Tax Alerts

January 05, 2021

Tax Briefing(s)

Consolidated Appropriations Act, 2021 (revised)2020 Post-Election Tax Policy Update 2020 Year-End Tax Planning 2020 Payroll Tax Deferral Order CARES Act Coronavirus Tax Relief

Notices Delayed Due to COVID-19
The IRS continues to experience delays mailing backlogged notices due to the volume and restart of issuing notices during the pandemic. The delay impacts some, but not all, IRS notices dated from Nove...

IRS Reminds Employers of Filing Deadline for Form W-2, Wage Statements
The IRS has reminded employers of filing file Form W-2, Wage and Tax Statement, and other wage statements by Monday, February 1, 2021, to avoid penalties and help the IRS prevent fraud. Due to the us...

Deadline to Certify Certain Employees for WOTC Extended
Employers that hired a designated community resident or a qualified summer youth employee under Code Sec. 51(d)(5) or (d)(7) who began work on or after January 1, 2018, and before January 1, 2021,...

Adjusted Applicable Dollar Amount for Fee Imposed on Health Insurance Plans Announced
The IRS has announced that the applicable dollar amount used to calculate the fees imposed by Code Secs. 4375 and 4376 for policy and plan years that end on or after October 1, 2020, and before Oc...

Form 1024-A Revised for Electronic Submission
The IRS has announced that it is revising Form 1024-A, Application for Recognition of Exemption Under Section 501(c)(4) of the Internal Revenue Code, to allow electronic filing for the first time, as...

AL - Application for deduction properly denied
A taxpayer’s application for rehearing was overruled as the taxpayer failed to substantiate the claimed deductions concerning Alabama sales and use tax assessment. In this matter, the taxpayer claim...

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 - Credit claim procedure for taxes paid to another country discussed
Arizona Department of Revenue (department) discusses procedure for claiming credit for personal income taxes paid to another country by Arizona resident individuals. The department noted that if an Ar...

AR - Taxpayer's landscaping services for new constructions properly subject to sales tax
A taxpayer’s landscaping services for new construction projects was properly subject to Arkansas sales and use tax assessment as under Arkansas law landscaping services are subject to tax regardless...

CA - Changes affecting used vehicle dealers and vehicle auction houses discussed
For sales and use tax purposes, beginning January 1, 2021, the California Department of Tax and Fee Administration (department) is changing the filing frequency of all used vehicle dealers and vehicle...

CO - Governor advances tax relief for restaurant and bar industries
Colorado Governor Jared Polis issued an Executive Order to extend the state sales tax payment deadline for 30 days for the month of November for qualifying:restaurants;bars; andfood trucks.The deadl...

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 - Mandatory electronic filing for many business tax returns announced
The Delaware Division of Revenue (division) issued a memorandum notifying taxpayers that most gross receipts tax, excise tax, and withholding tax returns and payments will be required to be filed elec...

DC - District of Columbia allows electronic signatures
The District of Columbia will allow income tax, withholding and corporation/unincorporated franchise business tax returns to be signed electronically. The District will allow taxpayers and tax profess...

FL - Clay County adds 0.5% school capital outlay surtax
The combined Florida state and local sales and use tax rate for Clay County will be 7.5% effective January 1, 2021.Clay County Resolution Adopting SurtaxVoters approved a Clay County Resolution adopti...

GA - Bulletin on electronic signatures issued
The Georgia Department of Revenue issued a bulletin clarifying its current regulations on electronic signatures and filings, and authorizing broader acceptance of digital or electronic signatures ("e-...

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 - Bulletin discussing changes to taxation of sales by auctioneers to resident purchasers published
For sales and use tax purposes, the Illinois Department of Revenue published an information bulletin discussing the changes to taxation of sales by auctioneers to resident purchasers. Beginning Januar...

IN - Gasoline use tax rate for December 2020 announced
The Indiana gasoline use tax rate for the month of December 2020 is $0.103 per gallon. Departmental Notice #2, Indiana Department of Revenue, December 2020...

IA - Updated withholding tax tables released
Iowa issued updated income tax withholding formulas and tables for 2021 to continue to align Iowa withholding with recent changes in state tax laws.Reason for New TablesFor individuals, this means tha...

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 - Homestead exemption increased for 2021 and 2022
The Kentucky Department of Revenue has notified taxpayers that the maximum homestead exemption from property tax applicable to real estate owned by qualified taxpayers is increased by $1,200, from $39...

LA - Board of tax appeals granted department's no cause exception; overruled no right of action exception
The Louisiana Board of Tax Appeals (board) granted the Department of Revenue’s (department’s) preemptory exception of no cause of action and overruled its exception of no right of action in a deni...

ME - Appeal dismissed as untimely
A personal income taxpayer’s appeal against Maine personal income tax assessment was denied as untimely. In this matter, the taxpayer filed his 2017 income tax return, claiming certain credits and r...

MD - Maryland addresses impact of unemployment insurance payments on EITC
The Comptroller of Maryland is advising personal income taxpayers that the collection of unemployment insurance may result in the potential loss of Earned Income Tax Credits that they would normally r...

MA - Reporting rules for third party settlement organizations adopted
Massachusetts adopted personal income tax reporting rules for third party settlement organizations (TPSOs).TPSO Reporting RequirementsTPSOs like PayPal must report the gross amount paid in settlement ...

MI - Tribunal interest rate decreased
The interest rate applicable to amounts of Michigan tax determined by the Michigan Tax Tribunal to be unlawfully paid or underpaid is decreased to 4.25% for the period January 1, 2021 through June 30,...

MN - Taxpayers' motion for protective orders granted and county's motion to compel discovery partly granted
For Minnesota property tax purposes, the taxpayers’ motions for protective orders were granted, and the county’s motion to compel discovery was granted in part and denied in part because the taxpa...

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 - GILTI and FDII guidance updated
Nebraska updated its guidance on the corporate and personal income tax treatment of:IRC Sec. 951A global intangible low-taxed income (GILTI); andIRC Sec. 250 foreign derived intangible income (FDII).F...

NV - Request for conciliation conference properly denied as untimely
The New York Tax Appeals Tribunal (TAT) affirmed the determination of an administrative law judge (ALJ) that a personal income taxpayer’s request for conciliation conference was untimely filed. The ...

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

NJ - Valuation of residential property affirmed failure to overcome presumption of correctness
For New Jersey property tax purposes, the taxpayer’s request for reduction of the borough’s assessment was denied because he failed to produce sufficient evidence to overcome the presumptive valid...

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 - Taxpayer's subsidiary failed to show workforce increase; credit denied
For corporate income tax purposes, a developer and operator of real estate projects (taxpayer) was properly denied New York State qualified empire zone enterprise (QEZE) tax credit claimed for real pr...

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 - Manufacturers of rifles and shotguns properly subject to commercial activity tax
A manufacturer of rifles and shotguns (taxpayer) was properly subject to excise tax assessment as the taxpayer failed to provide additional documentation to establish that some products at issue were ...

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 - Covid-19 nexus guidance revised
For Oregon corporate excise (income) tax purposes, the presence of teleworking employees in Oregon between March 8, 2020 and December 31, 2020 won’t be treated as a relevant factor when making a nex...

PA - Philadelphia, Pennsylvania BIRT refund guidance issued
Philadelphia informs businesses that overestimated their 2020 business income and receipts tax (BIRT) estimated payments, they can amend their return and receive a refund. To receive a refund, busines...

RI - Emergency regulations on withholding for teleworkers during covid-19 pandemic extended
The Rhode Island Department of Revenue has extended the expiration date for income tax emergency regulations governing employees who are temporarily working remotely due to the coronavirus pandemic.Wi...

SC - Taxpayer not eligible for legal residence special assessment as spouse not state resident
For property tax purposes, the South Carolina Administrative Law Court (Court) affirmed the county assessor’s denial of the taxpayer’s application for a special assessment as legal residence statu...

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 - Foreign entity storing inventory in state not subject to franchise tax
Tennessee discusses franchise tax treatment of a foreign corporation that did not have income effectively connected to a U.S. trade or business. In this matter, the taxpayer was a foreign entity regis...

TX - October 2020 certification of the average closing price of gas and oil released
The Texas Comptroller of Public Accounts has determined the average taxable price of crude oil for the reporting period October 2020 is $27.68 per barrel for the three-month period beginning on July 1...

UT - General informational on sales and use tax updated
The Utah State Tax Commissioner has issued a publication providing general information related to sales and use tax. The publication includes Utah tax law and Tax Commission rules, however, it is not ...

VT - Use tax guidance for individuals updated
Vermont issued a fact sheet providing use tax information for individuals, including how to calculate, file, and pay the right amount of tax. The fact sheet states that the items that generally qualif...

VA - Information provided on Virginia's taxation of heated tobacco products, economic nexus for tobacco products distributors
Virginia issued a bulletin on recently enacted legislation that imposes the tobacco products tax on any heated tobacco product beginning January 1, 2021. The bulletin also clarifies that out-of-state ...

WA - Rule on schools and colleges exemption updated
The Washington property tax rule on schools and colleges has been revised to reflect recently enacted legislation. Educational institutions claiming property tax exemptions are not required to provide...

WV - 2021 West Virginia motor fuel average wholesale prices and combined tax rates announced
West Virginia has determined the 2021 average wholesale prices and combined tax rates of motor fuels and alternative fuels for excise and sales and use tax purposes. The combined tax is comprised of a...

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

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%....