Multistate Tax & Nexus

Ohio Commercial Activity Tax Bright-line Nexus Constitutional-What to do now?

The Ohio Supreme Court recently held that the bright-line presence nexus standard for Ohio Commercial Activity Tax (“CAT”) does not violate the U.S. Constitution. Many taxpayers have pending audits or appeals at the Board of Tax Appeals regarding this nexus issue. What should these and other CAT taxpayers do now? First, it is expected the... Read More

Ohio Supreme Court upholds bright-line nexus standard for Commercial Activity Tax; Remote vendors subject to Ohio tax even if lacking physical presence.

In a 5-2 decision, the Ohio Supreme Court found that the $500,000 gross receipts in Ohio standard for creating substantial nexus for the commercial activity tax (CAT) is constitutional. “We hold that given the $500,000 sales-receipts threshold, the burdens imposed by the CAT on interstate commerce are not ‘clearly excessive’ in relation to the legitimate... Read More

Remote Vendor Nexus Coming To a Head

Since the U.S. Supreme Court’s decision in Quill v. North Dakota more than 24 years ago, states have been focused on addressing the ability to force a vendor to collect tax in their state in the absence of a physical presence as required by Quill. The fundamental basis for the decision is that in the... Read More

Colorado Sales Tax Notification and Reporting Law Found Constitutional

In 2010, Colorado enacted legislation to enhance use tax collection by mandating that non-collecting retailers notify customers of their tax obligation by:   Notifying customers at the time of sale that purchases may be subject to Colorado use tax. Providing an annual statement to customers making at least $500 of purchases of the total amount... Read More

Are You Making Substantial Sales in Alabama? Economic Nexus Extended to Sales Tax Collection

Effective January 1, 2016, Alabama requires remote vendors to collect Alabama sales tax when exceeding $250,000 of sales, and either advertising or sending catalogs into the state. Ala. Reg. 810.6-2-.90.03. Although this provision is clearly unconstitutional based upon the U.S. Supreme Court’s decision in Quill Corp. v. North Dakota, 504 U.S. 298 (1992), Alabama seems... Read More

Third Annual Northeast Ohio State and Local Tax Conference Provides Invaluable Updates on the Current State of Ohio and Multistate Taxes

The third annual Northeast Ohio State and Local Tax Conference was held on November 12, 2015 in Independence, Ohio. Matt Chafin, Chief Legal Counsel for the Ohio Department of Taxation, led off the Conference with an Ohio Tax Update, providing valuable insight to the Department of Taxation’s posture and recent initiatives. Chafin is the highest-ranking... Read More

U.S. Supreme Court Sides With Taxpayer in Controversial Maryland Income Tax Case

In Comptroller of the Treasury of Maryland v. Wynne, a sharply divided, 5-4 decision, the U.S. Supreme Court held that Maryland’s personal income tax scheme, which prohibits resident individuals from offsetting county level income taxes by amounts paid to other jurisdictions, violates the federal dormant Commerce Clause. In Maryland, personal income tax on state residents... Read More

Multistate Taxation: New York’s Highest Court Upholds Click-Through Nexus Law Amid Facial Constitutional Challenge

“Click-through nexus” laws generally attribute the presence of in-state representatives who refer sales to an out-of-state retailer, including via web links, in exchange for a commission for determining sales tax nexus. See e.g., New York Tax Law § 1101(b)(8)(vi). New York was the first state to enact such a “click-through nexus” or Amazon law. Predictably,... Read More

Multistate Taxation: Marketplace Fairness Act Gaining Momentum

On April 22, 2013, the U.S. Senate voted to take up the Marketplace Fairness Act of 2013 for debate and amendment. Notably, President Obama came out in support of the bill. While several hurdles remain, including passage by the Republican-controlled House of Representatives, this is step towards federal legislation permitting states to force remote sellers, i.e.,... Read More

Multistate Sales/Use Tax – Benefits of Voluntary Disclosure for Construction Contractors

Construction contractors that discover a delinquent sales/use tax liability from failing to collect tax on taxable sales can typically minimize their liability by participating in a state voluntary disclosure program (or amnesty program). In Ohio, and in the majority of states, construction contractors are deemed to be consumers of their materials incorporated into the constructed... Read More