Recent Important Changes to State Tax Law


As part of the firm‘s continuing efforts to keep clients informed of important issues in state tax law, we have assembled the following summary of recent tax law developments affecting the telecommunications industry.  Due to the current economic climate, many states are scrambling to meet budgetary shortfalls and are desperately seeking new sources of revenue.   As a result, states are becoming more aggressive and creative in the application and enforcement of their tax laws.

Oklahoma Enacts Sales and Use Tax Affiliate Nexus and “Colorado-Style” Reporting Requirements

Joining a growing number of other states, the Oklahoma legislature recently enacted a new sales and use tax affiliate nexus provision with its passage of HB 2359.  This new legislation would allow Oklahoma to apply tax collection obligations to out-of-state retailers if any member of the retailer‘s controlled group is doing business in the state.  HB 2359 also includes “Colorado-style” sales and use tax reporting requirements that impose extensive reporting requirements on out-of-state retailers with the intention of increasing compliance among such retailers with the state‘s sales and use tax .  The legislation is currently awaiting action from the Governor‘s Office.   Assuming the Governor signs HB 2359 into law, it will go into effect July 1, 2010.

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Georgia Enacts Streamlined Sales Tax Legislation

On May 27, 2010, Georgia became the latest state conform its sales and use tax laws to the requirements of the Streamlined Sales Tax Project (“SSTP”).  As detailed in past advisories, the SSTP is a collaboration among several states to simplify their state sales and use tax administration and to try to minimize the many differences between the tax policies and practices of participating states.  To encourage compliance with these recent changes to its sales and use tax, Georgia is also offering an amnesty program for businesses not currently registered to collect sales tax in Georgia (if certain eligibility requirements are met).  The amnesty program will begin on October 1, 2010 and last for at least one year.

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Florida Announces Tax Amnesty Program

Florida has approved a tax amnesty program that will allow taxpayers to pay overdue taxes – including communications taxes – with no penalty and reduced interest between July 1, 2010 and September 30, 2010.  Businesses will be able to pay no penalty and only 1/2 the interest due, if they (1) are reporting a tax liability previously unknown to the Florida Department of Revenue or (2) are responding to a Letter of Inquiry, self-audit or self-analysis.  Businesses will be able to pay no penalty and only 3/4 of the interest due, if they are responding to a bill, delinquency, audit, or other assessment issued by the Florida Department of Revenue.

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New Mexico Announces Tax Amnesty Program

Like the program in Florida, New Mexico‘s new tax amnesty program will allow taxpayers to pay overdue taxes between June 7, 2010 and September 30, 2010.  The program does not provide tax forgiveness but does allow qualified individuals and businesses to disclose unreported, under-reported and un-assessed taxes that were due prior to 2010 without incurring penalties.  Also, no interest will be applied as long as the tax liability is paid in full within 180 calendar days of assessment.

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If you have any questions or concerns regarding these ongoing developments in state tax law and the possible consequences for your business, please contact the attorney assigned to your account.  Alternatively, you may reply to this message via e-mail and someone will promptly respond to your inquiry.

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