Mazzeffi & Company

Tax Alerts

Tax Briefing(s)

2021 Post-Filing Season Update American Rescue Plan Act of 2021 2020 Tax Year-In-Review

Unemployment Compensation Refunds Continue
The IRS announced that another 1.5 million taxpayers would receive refunds averaging more than $1,600 as it continues to adjust unemployment compensation from previously filed income tax returns. The ...

IRS Updates Accounting Methods for Credit Card Fees
The IRS updated Rev. Proc. 2013-26, 2013-22 I.R.B. 1160, to reflect amendments to Code Sec. 451(b) made by the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97) and related Reg. §§1.451-3 and 1.127...

Security Summit Highlights Identity Theft Risk Related to Unemployment
The IRS Security Summit partners outlined how tax professionals can assist clients who were victims of unemployment compensation fraud schemes that targeted state workforce agencies in 2020 and 2021. ...

Entities Must Update EIN Information Within 60 Days of Change
The IRS urged entities with Employer Identification Numbers (EINs) to update their applications if there has been a change in the responsible party or contact information. The Service called this a ke...

Accounting Method Change Consent Procedures for Code Sec. 451 Amendments
The IRS updated automatic consent procedures for taxpayers to change their method of accounting to comply with final regulations under Reg. §§1.451-3, 1.451-8, and 1.1275-2(l); and for certain in...

Individual Entitled to Exclude Wages as Foreign Earned Income; Additions to Tax Not Imposed
An individual, who was employed as a contractor on a US military base in Afghanistan, was entitled to exclude wages from gross income which she earned as "foreign earned income" under Code Sec. 911...

AL - Updated chart shows local participation in 2021 back-to-school tax holiday
The chart listing the counties and municipalities that will participate in Alabama’s back-to-school sales tax holiday has been updated. The holiday is being held from July 16 through July 18, 2021.L...

AK - Alaska landing tax constitutional
The Supreme Court of Alaska held that the state landing tax does not violate the Import-Export and Tonnage Clauses of the United States Constitution or 33 U.S.C. §5(b).BackgroundIn this case, two com...

AZ - New affordable housing tax credit and other tax changes enacted
Arizona enacted a new tax credit to support the construction of affordable housing projects in the state. In addition, Arizona extended the tax credit for investment in a qualified small business and ...

AR - Non-taxable income must be included while calculating net operating losses
A taxpayer was properly subject to Arkansas corporate income tax assessment as the Department of Finance and Administration (department) correctly included the taxpayer’s non-taxable income with gro...

CA - EDD extends deadlines for employers in various counties affected by fires
For corporate and personal income tax purposes, the California Employment Development Department (EDD) is extending deadlines for employers in Trinity, Tehama, and Shasta counties directly affected by...

CO - Publication on cares act tax law changes revised
The Colorado Department of Revenue has revised a publication addressing how recent retroactive federal tax provisions under the Coronavirus Aid, Relief and Economic Security Act (CARES Act) and the su...

CT - Municipalities can provide temporary tax relief
Municipalities and taxing districts can adopt programs for fiscal years ending June 30, 2022, and June 30, 2023, to provide temporary Connecticut property tax or municipal utility charge relief to tax...

DE - Earned income tax credit modified
Delaware is modifying its earned income tax credit to give individuals a choice between a refundable or nonrefundable credit.How Much Is the Credit?The modified Delaware earned income credit will eq...

DC - Tax sales for certain properties cancelled
The District of Columbia has cancelled all 2021 property tax sales for Class 1 and Class 2 properties due to COVID-19. Notice of the cancellation will be mailed to affected property owners. Act 24-011...

FL - Lease or rental of a car by a peer-to-peer car-sharing program is subject to tax
The lease or rental of a motor vehicle by a peer-to-peer car-sharing program is subject to Florida sales and use tax. Moreover, a $1 per day rental car surcharge applies to a peer-to-peer car-sharing ...

GA - Sales and use tax treatment of fundraising activities conducted by organizations exempt from federal income discussed
For sales and use tax purposes, Georgia issued a policy bulletin providing guidance to organizations exempt from federal income tax under Internal Revenue Code (IRC) 501(c)(3) ("501(c)(3) organization...

HI - Guidance regarding general excise tax treatment of software released
The Hawaii Department of Taxation has released guidance on the general excise tax (GET) treatment of sales of software.Types of SoftwareThe Department considers the sale of prewritten or canned softwa...

ID - Calculation of estimated tax payments using commission's website discussed
The Idaho State Tax Commission has issued a release discussing the calculation of estimated property tax payments using a calculator on the commission’s website. Taxpayers in 30 Idaho counties can e...

IL - Management of abandoned, unclaimed property changed
Enacted Illinois legislation amends the State Treasurer Act and the Revised Uniform Unclaimed Property Act changing the management requirements for abandoned or unclaimed property for corporate income...

IN - Taxpayer entitled to waiver of late filing penalty and interest
For Indiana motor carrier fuel tax purposes, a motor carrier’s (taxpayer’s) protest against an assessment of late filing penalty and interest was sustained because the taxpayer provided sufficient...

IA - Covid-19 grant exemption guidance
The Iowa Department of Revenue has issued updated guidance, related to S.F. 619, Laws 2021, which went into effect July 1, 2021. S.F. 619 excludes from the Iowa income and franchise tax the receipt of...

KS - Withholding for teleworkers explained
Due to recently enacted legislation, Kansas allows employers to withhold income tax from employees based on the state of their primary work location rather than the location from which the employee te...

KY - 2021 property tax rate announced
For 2021, the Kentucky state real property tax rate is 11.9¢ per $100 of assessed value. The rate was 12.2¢ in 2020. This is the first time the rate has decreased since 2008. Release, Kentucky Depa...

LA - Board of tax appeals has jurisdiction over state or local taxes or fees; taxpayer’s petition denied prematurely
For corporate income tax purposes, the Lousiana Board of Tax Appeals (BTA), in an appeal, determined that BTA has jurisdiction on all subject matter relating to state or local taxes or fees and the ta...

ME - Paper manufacturing investment credit clarified
The Maine Paper Manufacturer Investment Tax Credit is amended to clarify that a "qualified investment" does not include an investment made prior to January 1, 2019, or after December 31, 2023. Addit...

MD - Evidence for claiming refund under statute of limitation discussed
The Court of Special Appeals of Maryland (court), in a personal income tax matter, determined that in a situation where a taxpayer mails a claim for a refund, but the Comptroller of Maryland does not ...

MA - Credit and deduction changes enacted
Massachusetts budget legislation contains numerous changes to corporate excise and personal income tax credits and deductions. The changes include:extension of the sunset date for the historic rehabi...

MI - List of certified community foundations for tax year 2021
The Michigan Department of Treasury released a list of certified community foundations for tax year 2021 for purposes of the Michigan business tax credit for contributions to community foundations. R...

MN - Legislative bulletin covering sales and use tax changes in 2021 issued
The Minnesota Department of Revenue has issued a legislative bulletin outlining sales and use tax, and miscellaneous tax changes made during the 1st Special Session of 2021. Legislative Bulletin, Min...

MS - City of Sardis repeals tourism tax
Effective July 1, 2021 the city of Sardis will repeal its tourism tax. The Sardis tourism tax is levied at the rate of 3% on the gross proceeds derived from sales of prepared foods at restaurants and ...

MO - Deduction for long-term care insurance premium amounts expanded
Missouri has expanded the definition of "qualified long-term care insurance" for purposes of the personal income tax deduction for nonreimbursed long-term care insurance premium amounts. "Qualified...

MT - Non resident’s capital gains from land sale properly subject tax
A non resident who sold a property in Montana but did not report the same in a Montana personal income tax return was properly subject to additional personal income tax assessment. In this matter, the...

NE - Social security income exemption initiated
Nebraska initiated plans to provide an exemption from personal income tax for all social security income.Current TreatmentIndividuals computing Nebraska personal income tax liability can subtract soci...

NV - State high court upholds decision invalidating parts of 2019 MBT legislation
The Nevada Supreme Court affirmed a district court decision that invalidated portions of a 2019 law (S.B. 551) affecting the rates of the modified business tax. The law had resulted in Nevada continui...

NH - Solicitor general argues New Hampshire's challenge of Massachusetts rule should be denied
The acting Solicitor General of the United States has filed a brief arguing that the U.S. Supreme Court should deny New Hampshire’s motion challenging a Massachusetts rule requiring New Hampshire re...

NJ - Economic recovery act and certain other economic development programs revised
Enacted New Jersey legislation revises various corporation business tax credits and incentives that were previously enacted as part of the (Act). The legislation also revises certain other economic de...

NM - Guidance on gross receipts tax holiday revised
The New Mexico Taxation and Revenue Department has revised its publication providing information on the gross receipts tax holiday. The publication covers numerous topics, including a general summary ...

NY - Taxpayer's driver license suspended as preparer penalties
A taxpayer was properly subject to suspension of driver’s license as preparer penalties because the taxpayer failed to prove that the assessed tax preparer penalties do not fall within the definitio...

NC - Bailey settlement exempt from North Carolina income tax
A retired employee (taxpayer) and his beneficiaries were exempt from North Carolina income tax on the taxpayer’s Bailey retirement account. In this matter, the taxpayer requested a ruling on the iss...

ND - Tax incentives for businesses in 2021-22 discussed
An updated brochure was published by the North Dakota Office of Tax Commissioner describing various corporate income tax, property tax and sales and use tax incentives for businesses and notes that in...

OH - Second quarter cat payment deadline approaching
Ohio reminds all Commercial Activity Tax (CAT) taxpayers that the second quarter 2021 CAT return is due August 10, 2021. Taxpayers are required to file and pay the CAT electronically via the Ohio Busi...

OK - Employer blood donation credit enacted
Oklahoma has enacted a nonrefundable income tax credit for employers whose employees participate in a blood drive that is organized with a nonprofit blood donation organization. The blood drive may no...

OR - Fiscal year filing required for corporate activity tax
The Oregon corporate activity tax (CAT) is amended to:require taxpayers using a federal tax year other than the calendar year to register and file a short year tax return;exclude from commercial activ...

PA - Guidance regarding roll-your-own clubs issued
The Pennsylvania Department of Revenue has issued guidance to businesses that provide customers access to tobacco, cigarette tubes and cigarette rolling machines for the manufacture of finished cigare...

RI - Taxpayers informed of changes in certain income tax credits
Rhode Island issued a notice informing taxpayers of the changes made to certain Rhode Island corporate and personal income state tax credits because of the recently enacted legislation. The legislatio...

SC - Nonresidents’ qualifications for angel investor credit discussed
The South Carolina Attorney General released an opinion discussing qualifications of nonresidents for the Angel Investor Credit. Under the applicable law, nonresidents are eligible for the individual ...

SD - Updated municipal tax guide released
The South Dakota Department of Revenue has issued a municipal tax guide that provides an introduction to municipal sales, use, and gross receipts taxes. The bulletin also discusses sales, use, and exc...

TN - Tennessee enacts tax holiday for food, food ingredients, and prepared food
A Tennessee sales and use tax holiday is enacted for food, food ingredients, and prepared food sold from July 30, 2021 through August 5, 2021.Food and Food Ingredients Tax HolidayA sales and use tax e...

TX - Guidance on motor vehicle rental tax issued
For sales and use tax purposes, the Texas Comptroller of Public Accounts issued a motor vehicle rental tax guide for taxpayers who rent motor vehicles in Texas. The guide discusses the taxpayers’ pe...

UT - Taxpayer's financial hardship not reasonable cause of penalty waiver
A minority shareholder in a partnership (taxpayer) was denied a waiver of penalties, by the Utah Tax Commission (commission), on the taxpayer’s personal income tax return as the taxpayer failed to p...

VT - Comments sought on apportionment regulation amendments
Vermont has proposed various amendments to its corporate income tax allocation and apportionment regulations. Generally, the amendments would update the regulations to be consistent with legislative c...

VA - Virginia Guidelines Issued on Change in Application of Tax on Sales of Accommodations Facilitated by Accommodations Intermediaries
Virginia issued guidelines on the change in application of the retail sales and use tax to sales of accommodations facilitated by accommodations intermediaries as a result of previously enacted legisl...

WA - Interest rate on assessments and refunds revised
For calendar year 2022, Washington’s interest rate on assessments and refunds on excise taxes is 2%. Research Report 2021-5, Washington Department of Revenue, July 7, 2021...

WV - Deadline for filing tax returns for oil-producing and natural gas-producing properties extended
West Virginia provides a 30-day extension for filing property tax returns for oil-producing property and natural gas-producing properties for the 2022 tax year. Therefore, the due date for filing prop...

WI - SST taxability matrix and certificate of compliance updated
Wisconsin updated its Streamlined Sales and Use Tax (SST) Agreement taxability matrix and certificate of compliance. The changes are effective August 1, 2021. Taxability Matrix, Wisconsin Department ...

WY - Guides and outfitters subject to lodging assessment
Beginning July 1, 2021 guides and outfitters must collect the Wyoming lodging assessment. They are still exempt from local lodging taxes. Lodging services provided by guides and outfitters include pla...