Daily Tax Report: State

States Stand to Lose Billions in Taxes Tied to Tourism, Live Sports

Illinois Warns Revised Deadlines May Require Taxpayer Action

Latest Stories

IRS Watchdog Asks Public to Report Virus Stimulus Payment Scams

The IRS’s watchdog wants people to report scammers who impersonate agency employees to get their hands on Covid-19 stimulus payments, so that the perpetrators can be identified and stopped.

Illinois Warns Revised Deadlines May Require Taxpayer Action

Illinois warned taxpayers they may need to act to reschedule payments. Georgia, meanwhile, is extending the deadline to file for conservation tax breaks, and Utah says it will be holding tax appeals only by telephone for now. Here’s the latest on shifting state tax guidelines, deadlines, and policy to deal with the coronavirus pandemic. For Monday’s coverage click here. Here’s a state-by-state roadmap.

Opportunity Zone Advocates Push for Covid-19 Relief on Deadlines

A group of investors, consultants, developers, law firms, and others is pressing IRS and Treasury officials to ease deadlines for opportunity zone investors in light of disruptions caused by the coronavirus pandemic.

Tenth Circuit Upholds IRS Summons in Marijuana Dispensary Dispute

Colorado must hand over records tied to a medical marijuana dispensary as part of the IRS’s audit into potentially improper business deductions, the Tenth Circuit said.

Industries Fight for More Relief in New Bill, Tweaks to Last One

Lobbyists are waging battle for clients on multiple fronts, juggling a need to push for technical fixes to the recent $2.2 trillion coronavirus relief law while also advocating for future help.

Missouri May Consider Remote Sales Tax Bill in Later Session

State of Wayfair: Missouri isn’t likely to take action on two bills aimed at remote sellers until later this year.

IRS Closures, Service Cutbacks Turn Tax Queries Into a Struggle (1)

Aspects of the IRS’s pandemic response are making it nearly impossible to reach the agency by phone or mail, hampering individuals and tax advisers trying to resolve issues not covered by a recent enforcement freeze.

Featured Topics

credits and incentives

Opportunity Zone Investors Want Covid-19 Deadline Certainty (1)

U.S. Starts Employee Retention Credit for Virus-Hit Businesses

Employee Relief Payments • Tax-Loss Harvesting • Business Debt

individual income tax

IRS Closures, Service Cutbacks Turn Tax Queries Into a Struggle (1)

Seattle High-Earners Tax Dies Quietly at Washington High Court

TAX VIRUS BRIEFING: Relief Continues But Challenges Remain (1)

sales and use tax

Missouri May Consider Remote Sales Tax Bill in Later Session

States Stand to Lose Billions in Taxes Tied to Tourism, Live Sports

Stimulus Legislation • Employee Relief Funds • Economic Nexus

Virginia Tax Commissioner Determines Federal Retiree Not Entitled to Subtraction From State Income Tax

The Virginia Tax Commissioner Jan. 21 determined in a letter ruling that Taxpayer wasn’t entitled to an individual income tax subtraction equivalent to individuals who received Social Security or Railroad Retirement benefits. Taxpayer was a retired federal employee who received a pension from the Civil Service Retirement System (CSRS). Taxpayer filed resident individual income tax returns and claimed refunds, arguing that the state law discriminated against federal CSRS employees. The commissioner ruled that: 1) a state court already held that the state didn’t discriminate against federal CSRS employees based on the source of their pay or compensation; 2) Taxpayer wrongly believed that the U.S. Supreme Court precedent invalidated the prior decision of the state court; and 3) Taxpayer’s reliance on the precedent was misplaced because the precedent involved a direct comparison between state and federal law enforcement employees. Therefore, the commissioner denied the claim. [Va. Dep’t of Tax’n, Ruling of the Comm’r /VA\Ruling\PD20-10///, 01/21/20]

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Virginia Tax Commissioner Determines Taxpayer’s Blog Subject to BPOL Tax

The Virginia Tax Commissioner Jan. 7 determined in a letter ruling that Taxpayer’s operation of a blog was subject to business, professional and occupational license (BPOL) tax. Taxpayer operated an online food and nutrition blog that generated income from advertising fees. The city requested an opinion regarding whether Taxpayer was subject to the BPOL tax. The commissioner noted that: 1) localities are prohibited from imposing a local license fee or tax upon the privilege or right of printing or publishing any newspaper, magazine, newsletter, or other publication issued regularly if the publication’s subscription sales are exempt from state sales tax; 2) the current version of this exemption in effect since 1988 doesn’t contemplate the internet or nontangible media; and 3) a blog therefore doesn’t fall under the category of “other publications” in the exemption. Therefore, the commissioner found the tax applied to Taxpayer’s blogging activities. [Va. Dep’t of Tax’n, Ruling of the Comm’r /VA\Ruling\PD20-4///, 01/07/20]

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Virginia Tax Commissioner Determines DOT Correctly Denied Use Tax Refund on Software Support Services

The Virginia Tax Commissioner Jan. 21 determined in a letter ruling that the Department of Taxation (DOT) correctly denied Taxpayer’s use tax refund requests with respect to software support and maintenance charges. Taxpayer sought the refunds on the ground that the exemption applied for electronically delivered software services not involving an exchange of tangible personal property. The DOT concluded that there was insufficient information to support issuing the refunds. Taxpayer appealed. The commissioner noted that: 1) a sales invoice, contract, or other sales agreement must explicitly certify the electronic delivery of the software and that no tangible medium was provided to the customer; and 2) Taxpayer provided insufficient proof of electronic delivery and didn’t show that no tangible medium was provided to customers. Therefore, the commissioner denied Taxpayer’s refund requests. [Va. Dep’t of Tax’n, Ruling of the Comm’r /VA\Ruling\PD20-5///, 01/21/20]

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Virginia Tax Commissioner Determines Taxpayer Was State Resident, Requires Individual Income Tax Return Filing

The Virginia Tax Commissioner Jan. 21 determined in a letter ruling that Taxpayer was a resident of the state and was required to file an individual income tax return. The IRS provided information to the Department of Taxation (DOT) indicating Taxpayer may have been required to file a state income tax return for 2015. Taxpayer didn’t file a state return. The DOT requested information from Taxpayer, but Taxpayer didn’t respond. The DOT issued an assessment. Taxpayer appealed, contending that he was unemployed and wasn’t a Virginia resident. The commissioner found Taxpayer maintained an abode in the state and stayed there for an aggregate of more than 183 days during the tax year at issue. Therefore, even though Taxpayer was a domiciliary of another state, he was an actual resident of Virginia for income tax purposes. [Va. Dep’t of Tax’n, Ruling of the Comm’r /VA\Ruling\PD20-9///, 01/21/20]

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Opportunity Zones: Will Tax Break for Investors Benefit Communities Too?

The 2017 tax overhaul included incentives to invest in distressed communities. Investors benefit from tax breaks and the designated opportunity zones benefit from economic investment, but critics say already-wealthy investors don’t need these breaks.