March 21, 2017 | BY Joseph Hoffman
For decades, Amazon.com helped its customers dodge the sales taxes they owed to gain an advantage over its competitors. But as the company’s business strategy has changed, so have its tax collection practices. As recently as 2011, the nation’s largest e-retailer was collecting sales tax in just 5 states, home to 11 percent of the country’s population. Starting next month, when the company begins collection in Hawaii, Idaho, Maine, and New Mexico, it will officially collect every state-level sales tax in the nation on its direct sales.
Despite this progress, the company’s sales tax collection practices are still not comprehensive. It appears that Amazon is not collecting some local-level sales taxes in states such as Alaska, for instance. And Amazon refuses to require sales tax collection by many third-party sellers using its website, meaning that companies with names such as “Buy Tax Free” are using Amazon.com as a way to allow their customers to evade their sales tax responsibilities. Notably, New York Gov. Andrew Cuomo has proposed fixing this problem by requiring “marketplaces” with more than $100 million in annual sales to collect sales taxes on sales made by third-party retailers.
But despite its shortcomings, this expansion in Amazon’s tax collection practices represents a step forward for rational sales tax policy. It is therefore worth taking a look at the variety of factors that led to this reversal.
First, and perhaps most important, is that Amazon’s effort to shorten delivery times caused it to open distribution centers around the country. Whenever a retailer establishes a physical presence in a state, it comes within reach of that state’s sales tax collection laws.
Second, state lawmakers have become increasingly frustrated by the sales tax revenue gap created by e-retail and some have taken matters into their own hands by enacting laws expanding their sales tax collection requirements. The U.S. Supreme Court has placed limits on states’ authority in this area, but creative lawmakers have found ways to encourage some e-retailers to collect nonetheless.
Third and finally, it appears that Amazon’s pivot away from facilitating sales tax evasion may be helpful in building goodwill with lawmakers from whom it is asking for subsidies. Good Jobs First estimates that Amazon could soon surpass Wal-Mart as the largest retail-sector recipient of state and local government aid, meaning that it would have received over $1.2 billion in public subsidies.
While the nature of the debate surrounding Amazon and state and local tax policy may be changing, it’s certainly not coming to an end.
March 13, 2017 | BY Admin
House Republicans have unveiled a repeal and replacement plan for the Affordable Care Act (ACA). The GOP’s American Health Care Act (AHCA) would eliminate most of the ACA’s taxes, including the penalties connected with the individual and employer mandates, the net investment income (NII) tax and the Additional Medicare tax. Left in place, although delayed, would be the excise tax on high-dollar health plans. Also left in place, would be a number of non-tax provisions related to scope of coverage, benefits and children – including allowing dependents to continue staying on their parents’ plan until age 26, prohibiting health insurers from denying coverage or raising rates to patients based on pre-existing conditions, and forbidding lifetime limits on insurance coverage.
The House GOP plan has been rejected by Democrats. Some Republicans have said the plan does not go far enough in repealing all of the ACA. As March moves forward, a vote on the House floor is eventually expected.
March 01, 2017 | BY Chris Gaetano
The New York State Department of Taxation and Finance (NYSDTF) clarified its position Friday on whether practitioners can check the “no applicable ID” box on a return if their client, despite having a valid driver’s license number, refuses to disclose it.
“In this transition year, the first where New York is requiring taxpayers’ driver’s license information, we will permit preparers to check the ‘No Applicable ID’ box if the taxpayer refuses to provide the information,” NYSDTF acting Commissioner Nonie Manion wrote in a statement. “IF this is necessary, contemporaneous information should be kept to document the preparer used due diligence to obtain the information and the taxpayer refused.”
Manion’s statement addressed ambiguities that have emerged in the wake of the state tax department’s new requirement that all taxpayers provide their driver’s license (or other DMV-issued ID) information on their e-filed returns as an extra layer of verification. Shortly after announcing the new requirement, which practitioners had complained came with little advance notice before tax season, the department said through various spokespersons that if a client does not want to share this information, preparers may check the “No Applicable ID” even if the taxpayer does, in fact, have an applicable ID—and the return would be accepted.
However, a Feb. 17 update to the state’s Business Taxpayer Answer Center, said otherwise. In response to the question, “If my client is known to have a valid driver license or state-issued ID, but chooses not to disclose it, can I check the No applicable ID box without repercussion? Am I required to disclose this?” the state tax department site stated that “if a tax professional knows his client has a driver’s license or non-driver’s license ID, but he client refuses to comply with the requirement to provide that information, the preparer cannot certify truthfully and submit the return with the No ID box checked.”
This caused confusion among tax professionals who suddenly were unsure about what was or was not allowed. After a conference call between Manion and NYSSCPA leadership on Friday, NYSDTF drafted the statement saying that, this year, preparers can check the box in the event that their client refuses to supply the information, so long as they retain the required documentation stating that they used due diligence to obtain the ID information. Manion said NYSDTF would update its website with the updated information shortly.