Posts in Sales & Use Tax
Online Auto Parts Company Rocked with $8M Transaction Tax Assessment
Online Auto Parts Company Rocked with $8M Transaction Tax Assessment

Recently, the Arizona Court of Appeals (Court) determined the Wisconsin headquartered online auto parts retailer RockAuto, LLC (RockAuto) had established substantial nexus in Arizona through its network of distributors, vacating and remanding the tax court’s decision. With a twist of fate regarding the tax court’s decision favoring RockAuto, the online retailer now faces a liability in excess of $8 million of tax, penalties and interest assessed by the Arizona Department of Revenue (Department).

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Tax, Sales & Use Tax, Audit Notices, Appeals, Taxability DeterminationsLisa Civitella Comments
Former Officer Liable for $56k of Unpaid Tax After 10-Year Appeal
Former Officer Liable for $56k of Unpaid Tax After 10-Year Appeal

In a recent decision, the Nebraska Supreme Court (Court) held a company officer personally liable for over $56,000 in unpaid use tax, penalties and interest. The officer was the former president of Direct Media, Inc. (Media) a direct mail processing company which ceased operations in 2011. The Court’s ruling affirmed the lower court’s determination that the officer was the company’s responsible officer in charge of managing the business’ finances and thereby responsible for the unpaid tax.

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Tax, Sales & Use Tax, Audit Notices, Appeals, Taxability DeterminationsLisa CivitellaComment
IL Appeals Court Rejects $162.7M Sales Tax Refund Claim on Aviation Fuel
IL Appeals Court Rejects $162.7M Sales Tax Refund Claim on Aviation Fuel

The Illinois Appellate Court denied a $162.7M refund claim from American Aviation Supply, LLC (American) after determining that a sales tax exemption for property bought and stored temporarily in Illinois did not apply to the company’s sales of aviation fuel. In doing so, the Court affirmed the Illinois Independent Tax Tribunal’s (Tribunal) decision, which found that the exemption did not apply because the fuel was not consumed solely outside of the state. Because approximately 2% of the fuel was consumed in Illinois, the entire sale is subject to tax.

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Tax, Sales & Use Tax, Audit Notices, Appeals, Taxability DeterminationsLisa CivitellaComment
Sheetz Sales Tax Issue Bubbles Over to Perrier
Sheetz Sales Tax Issue Bubbles Over to Perrier

Sparked by ongoing litigation in a class action lawsuit by Sheetz, Inc. (Sheetz), the Pennsylvania Commonwealth Court (Court) is reviewing whether Perrier water is classified as “water” or a “soft drink” for sales tax purposes. The dispute arose after a class action lawsuit was filed against Sheetz, in which the plaintiff alleged that Sheetz incorrectly charged and collected sales tax on nonflavored mineral water such as Perrier. Now, the Court must decide if the characteristics of Perrier water, including the bottling process and the carbonation, are more aligned with the definition of “water” or a “soft drink” for Pennsylvania sales tax purposes.

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Tax, Sales & Use Tax, Audit Notices, Appeals, Taxability DeterminationsLisa CivitellaComment
Netflix Challenges Streaming Services Taxability
Netflix Challenges Streaming Services Taxability

Netflix, Inc. (Netflix) began a long, arduous battle against the Colorado Department of Revenue (Department) regarding the state’s position on the taxability of Netflix’s streaming services. Now, Netflix is seeking a refund of tax paid to the Department based on three arguments: (1) Netflix’s streaming services do not involve the transfer of a physical product, (2) Netflix’s Terms of Use do not grant tangible personal property to the users, and (3) the services are provided on a month-to-month subscription basis that does not qualify as a sale.

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Tax, Sales & Use Tax, Audit Notices, Appeals, Taxability DeterminationsOlivia MascharkaComment
IL Enacts New Exemption for Military Purchases Made by Armed Forces
IL Enacts New Exemption for Military Purchases Made by Armed Forces

Effective January 1, 2024, Illinois enacted a new exemption for purchases of tangible personal property made by active-duty members of the United States armed forces when the federal government is the payor. This exemption applies to the Retailers’ Occupation Tax Act, the Service Occupation Tax Act, the Use Tax Act, and the Service Use Tax Act. Of note, the exemption does not include personal purchases made by active-duty service members.

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Tax, Tax Credits & Incentives, Sales & Use TaxLisa CivitellaComment
Michigan Treasury Issues Guidelines Simplifying Sales Tax Refund Procedure
Michigan Treasury Issues Guidelines Simplifying Sales Tax Refund Procedure

Understanding tax compliance procedures can be a complicated and time consuming process, especially when it comes to refunds and prepayment rates. The Michigan Department of Treasury (Department) has issued a Revenue Administrative Bulletin (RAB) to explain the procedures for claiming sales or use tax refunds, as well as to provide sales tax prepayment rates for gasoline and diesel fuel effective January 2024.

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Tax, Tax Credits & Incentives, Sales & Use TaxOlivia MascharkaComment
Cyber Monday Sales Tax Compliance Tips
Cyber Monday Sales Tax Compliance Tips

According to the 2023 online shopping forecast released by Adobe Analytics, Cyber Monday is the year’s largest single shopping day and is expected to yield $12B in spending. Additionally, Adobe reported that online shopping will account for over half of all online spending during the holiday season of November 1 through December 31. As an online seller, here are some things you should consider during this highly profitable season.

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Sales & Use Tax, Remote Sellers, Economic Nexus, Transaction ThresholdOlivia MascharkaComment
FL Commercial Real Property Rent Tax Rate Reduction Effective Date Nearing
FL Commercial Real Property Rent Tax Rate Reduction Effective Date Nearing

On December 1, 2023, Florida’s commercial real property rent tax rate will be reduced from the current rate of 5.5% to 4.5%. Earlier this year, Florida Governor Ron DeSantis signed sales tax relief legislation providing $2.7 billion in tax breaks during the 2023-2024 fiscal year. Highlights of the plan include a reduction in the tax rate for business rentals, permanent and temporary tax exemptions and sales tax holidays.

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Sales & Use TaxLisa CivitellaComment
Walmart Entity Wins in $8M Use Tax Resale Exemption Decision
Walmart Entity Wins in $8M Use Tax Resale Exemption Decision

In a recent en banc decision, the Missouri Supreme Court (Court) upheld the decision exempting from use tax purchases of information technology equipment made by Walmart subsidiary Walmart Starco LLC (Starco). Appellant, Missouri Department of Revenue (Department), assessed $8M in use tax, interest and penalties against Starco, asserting the company could not claim a resale exemption.

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Appeals, Sales & Use TaxLisa CivitellaComment
MS Supreme Court Overturns $50M+ Judgement Against Priceline, Expedia & Other OTCs
MS Supreme Court Overturns $50M+ Judgement Against Priceline, Expedia & Other OTCs

Reversing the lower chancery court, the Mississippi Supreme Court ruled that Online Travel Companies (OTCs) Priceline, Cheaptickets, Expedia, Orbitz, Hotels.com, Hotwire and Site59 are not subject to the sales tax levied against hotels in Mississippi. In reaching its decision, the Court determined that the OTCs are not “hotels” as defined by Mississippi statute.

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Sales & Use Tax, AppealsLisa CivitellaComment
Sprint Cellphone Retailer Liable for over $500,000 in Sales Tax
Sprint Cellphone Retailer Liable for over $500,000 in Sales Tax

The North Carolina Business Court (Court) recently reversed and remanded a decision appealed from the North Carolina Office of Administrative Hearings (OAH), leaving cellphone retailer Wireless Center of NC, Inc. (Wireless), an independent contractor of former Sprint Solutions, Inc.’s (Sprint) Boost Mobile (Boost) for over $500,000 of sales tax assessed on sales of prepaid airtime.

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Sales & Use TaxLisa CivitellaComment