Daily Tax Report: State

House Panel Approves SALT Cap Rollback but Senate Reluctant

Utah Special Session to Act on Major Tax System Changes

Latest Stories

Michigan Lawmakers Move to Allow Sports Betting, Online Gaming

The Michigan Senate passed a suite of bills Dec. 11 that would allow fantasy sports, online gambling, and sports betting with some restrictions.

Switch May See Up to $20 Million Annually With Michigan Tax Perk

The Michigan House passed a tax incentive for Switch Inc. that could save the company between $373,000 and $20.1 million in property taxes annually.

Louisiana Sales Tax Board Funding Ruled Unconstitutional (1)

The Louisiana Supreme Court ruled Dec. 11 that local taxes can’t be used to fund a state sales tax board, saying the state’s constitution doesn’t give legislators the power to make decisions about how to use that money without input from voters.

House Panel Approves SALT Cap Rollback Destined to Die in Senate

Legislation that would provide big deductions for taxpayers with high state and local tax bills is gathering momentum in the House this week, but it’s headed into a brick wall in the Senate.

Utah Special Session to Act on Major Tax System Changes

Utah Gov. Gary R. Herbert (R) called lawmakers to a Dec. 12 special session to consider a comprehensive tax system overhaul that includes a $160 million tax cut.

State of Wayfair: Florida Retailers Seek Action From Lawmakers

The Florida Retail Federation hopes Florida will become the 44th state to conform to Wayfair’s economic presence standard and compel remote sellers to collect and remit sales taxes there.

Airbnb, Santa Monica Reach Deal on Short-Term Rentals

Airbnb reached an agreement with Santa Monica to fund affordable housing efforts and ensure all Airbnb listings are in compliance with the city’s short-term rental laws.

Tax Developments

Alabama Court of Appeals Finds Disposition of Redemption Funds Didn’t Affect Taxpayer, Dismisses Appeal

The Alabama Court of Civil Appeals Dec. 6 dismissed Taxpayer’s appeal upon finding that disposition of redemption funds paid into probate court didn’t injuriously affect Taxpayer. The probate court rendered a decree for the sale of Taxpayer’s property for nonpayment of the state and county property taxes. An individual bought the property from the tax collector in a sale. Subsequently, a development corporation purchased the property from the individual. Taxpayer requested redemption of the property and paid the necessary amount to the probate court. The probate court granted redemption and ordered that the funds should be paid directly to the development corporation. On appeal, Taxpayer challenged the party to whom the redemption funds should be paid. The appeals court held that whether the redemption funds were paid to the corporation or to the tax collector didn’t injuriously affect Taxpayer. Therefore, the appeals court dismissed the appeal. [Whitworth v. Crestwood Dev. Corp., LLC, Ala. Civ. App., No. 2180794, 12/06/19]

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Alabama Tax Tribunal Finds Taxpayer Entitled to Bad Debt Deduction, Voids Final Income Tax Assessment

The Alabama Tax Tribunal Dec. 5 found Taxpayer entitled to an individual income tax deduction, voiding the 2014 final assessment. Taxpayer invested in a Georgia property with a partner who became unable to contribute. Taxpayer loaned his partner investment funds and claimed an individual income bad debt deduction in 2014, when the property sold. The Department of Revenue denied the deduction, claiming the debt was bad before 2014, and the debt claimed exceeded the amount allowed by Georgia statute. Taxpayer argued: 1) the debt wasn’t worthless until the property was sold, since it was secured with his partner’s share of the investment; and 2) the debt amount was agreed to by the parties and wasn’t prohibited under Georgia statute. The tax tribunal found Taxpayer’s arguments persuasive. Accordingly, the tax tribunal held Taxpayer entitled to the 2014 bad debt deduction and voided the 2014 final assessment. [Ala. Tax Trib., Assoc. Tax Trib. Judge Ruling Docket No. Inc. 17-268-LP, 12/05/19]

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Arizona DOR Announces Website Outage for Scheduled System Maintenance

The Arizona Department of Revenue Dec. 1 announced AZDOR.gov and AZTaxes.gov will be unavailable due to scheduled system maintenance from Friday, Dec. 13 at 6:00 p.m. to Monday, Dec. 16, for individual income, corporate income, trust income, property, excise, and sales and use tax purposes. [Ariz. Dep’t of Revenue, Websites Outage for Scheduled System Maintenance, 12/01/19]

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Arkansas Appeals Office Affirms Assessment, Finds Taxpayer Failed to Timely Register Vehicle, Pay Sales Tax

The Arkansas Office of Hearings and Appeals (OHA) Dec. 9 sustained the Department of Finance and Administration’s (DFA) proposed motor vehicle sales and use tax assessment, finding Taxpayer failed to timely register the vehicle and pay the liability. Taxpayer purchased and obtained possession of a vehicle but didn’t register it or pay taxes. The DFA issued a notice of proposed assessment imposing gross receipts tax, interest, and penalties. Taxpayer protested, asserting she didn’t keep the vehicle, but returned it to the dealership. The OHA found: 1) Taxpayer didn’t establish a rescinded sale relieved her from the tax liability; 2) discontinued possession of the vehicle wasn’t a defense to the enforcement of the tax law; 3) Taxpayer didn’t timely register the vehicle and pay the taxes; and 4) the DFA correctly assessed the tax, interest, and penalties. Accordingly, the OHA sustained the assessment. [Ark. Dep’t of Fin. & Admin., Docket No. 20-200, 12/10/19]