The South Dakota v. Wayfair, Inc. Supreme Court decision was rendered on June 21, 2018. The Court’s 5–4 majority decision overturned Quill by ruling that the physical presence rule was “unsound and incorrect” in the current age of Internet services.
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Texas Administrative Code Rule 3.330 Data Processing Services – The Most Vague Sales Tax Law in Texas
The question should not be ‘What IS data processing?’ but instead, ‘What ISN’T data processing?’. On January 3, 2017 the Texas Comptroller issued Private Letter Ruling #142730026. This Private Letter Ruling (PLR) was issued to an unidentified company (i.e., lender) which underwrote (i.e., loaned money on) collateralized real estate loans. The lender wanted to know if the purchase of a specific service from one of their vendors was taxable under Tax Rule 3.330 – Data Processing.
Buying an Existing Business and Successor Liability
The answer is often YES. It is called Successor Liability (Tax Code Section 111.020 and 111.024) and it is applied by the Texas Comptroller to the purchasers of many businesses in this state. Many people don’t know that just buying the assets of a company can cause the prior tax liability to be assigned to the purchaser.
Sexually Oriented Business Fee (aka the Pole Tax)
Most, if not all, of these SOB fee estimated assessments are wrong. Very wrong. Consultants at Texas Tax Group (ex-Texas Comptroller auditors) have carefully reviewed the Texas Comptroller’s SOB fee estimation method on SOBF client assessments and found many errors. These audit methodology errors can easily DOUBLE what the business actually owes in SOB fee. Texas Tax Group can help you defend yourself against these harsh and significantly over stated assessments.
South Dakota vs. Wayfair Inc.
On January 12, 2018 the U.S. Supreme Court agreed to hear the State Court case of South Dakota vs. Wayfair Inc. For many years the Supreme Court has basically punt on this white elephant issue (i.e., Federal law for the taxation of internet sales).
Downhole Equipment – Sales Tax Exemptions
A fairly recent court case was Southwest Royalties, v. Hegar. Here the Texas Supreme Court addressed whether downhole oil and gas equipment, such as tubing, casing and pumps, qualified for the manufacturing exemption from the Texas sales and use tax.
Revenue Suppression Software (aka Zapper Programs)
If you run a business that takes in a lot of cash (convenience store, restaurant, nightclub, etc.), you might be tempted to buy one of these Zapper programs. Bad idea. Although these programs do a pretty good job of excluding the cash sales from your POS cash register system, an alert Federal or State Auditor can often figure out the scam.
Hotel Occupancy Tax Lawsuits Argue for Collection by Online Travel Companies
What Does It Potentially Mean for Sales Tax Issues Involving Out-of-State Retailers? For over 10 years, online travel companies (OTCs) hotel occupancy tax cases have been initiated by a large number of individual cities, municipalities and states all over the...
Successor Liabilities – Audit Assessments Can Be Transferred
Since 2010 the Texas Comptroller’s Office has nearly tripled the annual number of successor liability assessments based on the three tax code sections listed below. Most of these assessments involve either a Sales Tax audit or a Mixed Beverage Gross Receipts Tax audit, which are transferred to a successor entity or individual using one or more of three tax code sections.
If You Provide a Service Using the Internet Then Beware
Tax Rule 3.330 – Data Processing There is, without a doubt, one taxable service Tax Rule that stands out far above ALL others as being vague and undefined and which can be applied, right or wrong, at the discretion of an inexperienced rookie Texas Comptroller...