Mazzeffi & Company

Tax Alerts

Tax Briefing(s)

2019 Year-End Tax Planning 2019 Post-Filing Season Update 2018 Year-End Tax Planning

2019-2020 Per Diem Rates Released for Business Travel
The IRS has released the 2019-2020 special per diem rates. Taxpayers use the per diem rates to substantiate certain business expenses incurred while traveling away from home for the period October 1, ...

Social Security Wage Cap and Benefit Amounts Increase for 2020
For 2020, the Social Security wage cap will be $137,700, and social security and Supplemental Security Income (SSI) benefits will increase by 1.6 percent. These changes reflect cost-of-living adjustme...

IRS Will Not Exempt Individuals with Open TAS Cases from Passport Certification
The IRS has changed how it handles passport certifications for people with significant tax debt. Following a review of relevant considerations regarding passport certification procedures, the IRS has ...

IRS Identifies Drought-Stricken Areas for Tax Relief After Involuntary Sale of Livestock
The IRS identified drought-stricken areas where tax relief is available to taxpayers that sold or exchanged livestock because of drought. The relief extends the deadlines for taxpayers to replace the ...

New Payment Option for Taxpayers in Private Debt Collection Program
The IRS has announced a new payment option to the private debt collection program. Taxpayers can now choose a pre-authorized direct debit option to make one payment or a series of payments toward thei...

IRS Announces Nonacquiescence in Service Contracts Case
The IRS has announced that it will not acquiesce to the holding of the Tax Court in GreenTeam Materials Recovery Facility PN, 113 TCM 1540, Dec. 60,945(M) that the transfer of a noncapital asset is tr...

AL - Town of section imposed lodgings tax
The town of Section imposed a local Alabama lodgings tax of 5%, effective February 18, 2019.This tax was first announced by the Department of Revenue on October 23, 2019. Local Tax Notice, Alabam...

AK - Interest rate announced for Q4 of 2019
The Alaska interest rate for delinquent taxes and overpayment of taxes is set at 7.75%, compounded quarterly, for the period October 1, 2019, through December 31, 2019. The Department of Revenue posti...

AZ - Interest rates remains same on underpayment and overpayment for fourth quarter of 2019
The interest rates on underpayments and overpayments of Arizona taxes for the period October 1, 2019, through December 31, 2019, are unchanged from the previous quarter at 5%. The Department of Revenu...

AR - Itemized deduction partially sustained
A personal income taxpayer’s itemized deductions on her Arkansas tax returns and schedules and an adjustment to her total income for moving expenses were partially sustained as the taxpayer prov...

CA - Taxpayer subject to limited liability company annual tax for doing business in state
A taxpayer was properly subject to California limited liability company (LLC) annual tax because it failed to establish that it did not conduct business in the state. Generally, every LLC is required ...

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 - Rate increase on certain meals and drinks discussed
Effective October 1, 2019, the Connecticut sales and use tax rate on certain meals and drinks is increased from 6.35% to 7.35%.Application of Rate Hike on Certain Meals and DrinksThe rate increase app...

DE - Answers to W-2 and 1099 FAQs for 2019 tax year updated
The Delaware Division of Revenue has updated its answers to frequently asked questions (FAQs) regarding W-2 and 1099 personal income tax withholding requirements for the 2020 reporting period. The FAQ...

DC - District of Columbia announces upcoming tax rate changes for cigarettes and other tobacco products
There are upcoming tax rate changes in the District of Columbia for cigarettes and other tobacco products.Rate Increase for Cigarette Excise TaxThe cigarette excise tax is made up of:a fixed tax per p...

FL - Firefighters' and police officers’ pension trust fund address/jurisdiction database updated
For insurance premium tax purposes, the Florida Department of Revenue has issued a tax information publication updating the electronic address/jurisdiction database. The insurers may use this database...

GA - Sovereign immunity had no application to current litigation
The Georgia Supreme Court partly reversed the decision of the trial court because it was found that sovereign immunity had no application to the current litigation. In this matter, City of College Par...

HI - Guidance regarding marketplace facilitators released
Hawaii has released guidance on the expanded imposition of general excise tax (GET) on sales made through marketplace facilitators under Act 2, Session Laws of Hawaii 2019 (Act 2). As previously repor...

ID - 2020 interest rate on tax delinquencies and refunds set
For 2020, the interest rate on an underpayment or overpayment of Idaho corporate income tax, personal income tax, sales and use tax, or any other non-property tax administered by the Idaho State Tax C...

IL - Basic guidelines provided on nexus
The Illinois Department of Revenue has issued a general information letter responding to a company’s survey questions regarding sales and use tax nexus. The department was unable to respond to t...

IN - Taxpayers reminded of recent changes to county innkeepers taxes
Indiana reminds taxpayers of recent changes to the county innkeepers tax.Allen CountyAllen County increases its county innkeepers tax rate from 7% to 8% effective November 1, 2019.LaGrange CountyThe c...

IA - Interest rates remain the same in 2020
Interest on delinquent taxes administered by the Iowa Department of Revenue is assessed from the original due date of the return to the date of payment of the tax. The annual rate is applied in calcul...

KS - Q1 local rate changes announced
The Kansas DOR announces the local sales and use tax rate changes below for the quarter beginning January 1, 2020.City Rate ChangesCity rate changes and developments are as follows:Herington (Dickinso...

KY - Kentucky combined reporting rules issued
Members of a unitary group doing business in Kentucky must file a combined corporation income tax report for tax years beginning after 2018. Kentucky issued combined reporting rules that explain:the c...

LA - Regulation governing pass-through entity level election proposed
The Louisiana Department of Revenue has proposed a new corporate income tax regulation that provides procedures for pass-through entities to elect to be taxed as C corporations. The proposed regulatio...

ME - Marketplace FAQs issued
Maine Revenue Services provides answers to frequently asked questions about recent legislation that requires marketplace facilitators to register and collect sales and use tax. The legislation was eff...

MD - Comptroller's attempt to limit NOL was contrary to statute
The Maryland Tax Court reversed the Comptroller’s decision assessing additional corporate income tax on a taxpayer. In this case, the taxpayer merged with two companies. Subsequently, the taxpay...

MA - Massachusetts corporate nexus regulation amendments finalized
The Massachusetts Department of Revenue has updated its webpage regarding the Voluntary Disclosure Program. Specifically, the department has added a FAQ's section to their Voluntary Disclosure webpage...

MI - Legislation extending nexus to marketplace facilitators passed by house
The Michigan House of Representatives has passed legislation that would extend sales and use tax collection obligations to marketplace facilitators.Marketplace FacilitatorsThe legislation would requir...

MN - New local taxes announced
Minnesota announces various new local sales and use taxes, effective January 1, 2020.New County Transit TaxesThe following counties will impose new local transit sales and use taxes at the indicated r...

MS - Lexington imposes 2% tax on prepared food and beverages served at restaurants
Effective November 1, 2019, the city of Lexington imposes a 2% Mississippi local sales and use tax on sales of prepared food and beverages at restaurants.Authorization of TaxLegislation enacted during...

MO - 2019 Missouri personal income tax changes announced
Missouri individual income tax return changes for the 2019 tax year relate to the following items:tax rates;standard deduction;federal tax deduction;first-time home buyer deduction;Federal Reserve Ban...

MT - Guidance issued on repatriation, GILTI, and FDII
Montana has explained the corporate income tax treatment of Tax Cuts and Jobs Act provisions concerning deemed repatriation of foreign dividends, global intangible low-taxed income, and foreign-derive...

NE - Prepaid wireless surcharge rate increases
The Nebraska prepaid wireless surcharge rate increases from 5.3% to 5.4% for the period of January 1, 2020 through December 31, 2020. The release can be viewed on the department’s website at&nbs...

NV - Clark county tax increase coming
Nevada’s most populated county, Clark County, will soon see a sales and use tax increase.Sales Tax Rate IncreaseEffective January 1, 2020, Clark County’s sales and use tax rate will be 8.3...

NH - New Hampshire governor signs budget legislation that lowers rates, updates conformity
New Hampshire enacted budget legislation making changes to the business profits and business enterprise taxes. The legislation:changes the rates of the business profits tax and the business enterprise...

NJ - Taxpayer eligible for earned income tax credit on her source of income
For personal income tax purposes, a taxpayer was entitled to claim the New Jersey Earned Income Tax Credit (EITC) for the 2016 tax year because she provided sufficient evidence to prove her claim. Und...

NM - Interest rate remains unchanged for fourth quarter of 2019
The interest rate charged on an underpayment or paid on an overpayment of New Mexico tax remains unchanged, at 5%, for the fourth quarter of 2019. The rates can be viewed on the New Mexico Department ...

NY - New York tax collection requirements for marketplace providers discussed
New York issued a memorandum discussing legislation requiring that marketplace providers collect sales tax on taxable sales of tangible personal property that they facilitate for marketplace sellers. ...

NC - Withholding requirements for nonwage compensation discussed
Effective January 1, 2020, a payer must deduct and withhold North Carolina income tax from nonwage compensation paid to a payee.Who Is a Payee?A payee is any:nonresident contractor;contractor who hold...

ND - Local tax changes announced
North Dakota has announced upcoming local sales and use tax rate changes.City of DunseithDunseith’s 1% city sales, use, and gross receipts tax was set to expire on January 1, 2020. The tax has b...

OH - Withholding assessment partially denied
For Ohio corporate and personal income tax purposes, a taxpayer’s protest against an assessment of withholding tax was partially sustained as the Department of Taxation (department) failed to su...

OK - Q1 local rate changes announced
The local sales and use tax rate changes below take effect in Oklahoma on January 1, 2020.City Rate ChangesRoff imposes a new use tax at a rate of 3.5%.Carlton Landing imposes a new use tax at a rate ...

OR - Business expense deduction allowed
Oregon personal income taxpayers were entitled to a deduction on certain business expenses for purchase of equipment as the taxpayers provided sufficient documentation. In this matter, the taxpayers a...

PA - Philadelphia announces 50% wage tax reduction on grad students stipend
For Pennsylvania personal income tax purposes, the Philadelphia Department of Revenue (department) announced that Philadelphia universities shall withhold wage tax on 50%, instead of the 100%, stipend...

RI - Rhode Island withholding tax changes announced for 2020
Effective January 1, 2020, Rhode Island will reduce certain employer withholding tax filing frequencies, in addition to mandating electronic filings and payments for certain taxpayers. Additionally, t...

SC - Dwelling on property contiguous with legal residence did not qualify for reduced assessment rate
For South Carolina property tax purposes, the county assessor’s refusal to assess a house on property contiguous with the taxpayer’s legal residence at 4% of the fair market value of the p...

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 - Eligibility of housing entity for community investment tax credit discussed
For corporate and personal income tax purposes, the Tennessee Department of Revenue issued a letter ruling discussing whether a housing entity (taxpayer) would be eligible for the community investment...

TX - Taxpayer’s request for refund denied as franchise tax is not an occupation tax
A motor carrier’s (taxpayer’s) request for refund of Texas franchise tax was denied because the taxpayer failed to establish that it was exempted from the tax. Under Texas Law, motor carri...

UT - Assessment upheld as taxpayers failed to rebut presumption of domicile
An assessment of Utah personal income tax against a married couple (taxpayers) was upheld because the taxpayers failed to rebut the presumption of domicile based on receiving the primary residential e...

VT - 2020 interest rates announced
Vermont has announced the interest rates applicable to overpayments and underpayments of tax liabilities in calendar year 2020.Interest Rate on Overpayments for Calendar Year 2020The annual interest r...

VA - Department erroneously reduced taxpayer’s refund
A taxpayer’s protest against the Virginia Department of Taxation’s personal income tax assessment was sustained because the department erroneously reduced the taxpayer’s refund. In t...

WA - Nexus thresholds discussed
Beginning January 1, 2020, the nexus thresholds for the imposition of Washington business and occupation (B&O) tax will be the same as those used for sales and use tax.Nexus ThresholdsA business m...

WV - Coal processing publication updated
West Virginia has updated a severance tax publication pertaining to the coal industry. The severance tax rate on coal is 5% of the gross value of the coal produced. However, a lower rate is applicable...

WI - Wisconsin updates nexus rule, sets regular activity at 15 days
Wisconsin has updated its corporate income tax nexus rule to clarify the level and types of activities that will require out-of-state businesses to file Wisconsin returns.Regular ActivityThe terms&nbs...

WY - Local rate change announced
Beginning January 1, 2020, Crook County, Wyoming will eliminate its specific purpose county option tax and decrease its total sales tax rate from 6% to 5%. The notice can be viewed on the department&r...