There’s always something changing in the world of tax, especially sales tax. Here’s a review of some of the recent changes and updates.

State updates

Kansas Gov. Laura Kelly has asked the state Department of Revenue to work with state legislators representing the communities impacted by recent wildfires to fast-track legislation extending the sales tax exemption for fence materials and services.

Kelly also said that total tax collections for November were $626.8 million, up $70.1 million from November 2020. Sales and use tax collections were 13.8%, or $34.5 million, more than November 2020.

Maryland’s December register includes the state’s Digital Advertising Gross Revenues Tax regulations, which became effective Dec. 13. The regs have only two “nonsubstantive changes” compared with the proposed regulations: referring to “nontechnical information included in the contract for digital advertising services” instead of allowing taxpayers to determine devices’ locations based on “the terms of the underlying contract for digital advertising services”; and the addition of “industry-standard metrics” to the list of “technical information.”

Massachusetts issued a notice stating that all sales and use tax filers must submit returns and make payments through MassTaxConnect for tax periods beginning on or after Jan. 1, 2022, including any past-due returns and payments for prior periods.

Michigan has updated its guidance on the sales and use tax nexus standards for remote sellers. Once a remote seller has met one of the economic nexus thresholds (200 sales transactions or more than $100,000 in sales), it must remit tax until an entire calendar year has passed in which it does not meet either threshold. The economic nexus standard also applies to marketplace facilitators and marketplace sellers.

Minnesota has updated its guidance for calculating sales tax on certain online discounts, including online deals and cryptocurrency. Specifically, the update says that the purchase of the discount voucher is not taxable, but once it’s redeemed the retailer should charge tax on the amount the customer paid for the discount voucher or on the discount voucher’s face value. Also, gift cards and cryptocurrency are a form of currency and should be treated as cash for sales tax purposes. 

Pennsylvania Republican State Sen. Scott Hutchinson is advocating for the elimination of both the Sales and Use Tax as well as the Personal Income Tax. Hutchinson has called the sales tax “no doubt regressive in its individually felt burden,” meaning that it hits those who make the least to the greatest degree.

Utah reported that total collections from all sources administered by its Tax Commission for FY 2021 were $13.97 billion, an increase of $3.26 billion, or 30.5%, more than total FY 2020 collections. Tax officials added that the state’s sales tax intake never fell off during the pandemic – Utah began mandating economic nexus just a year before COVID hit – and that the state saw a 300% increase in online sales during the FY2021.

Wisconsin has published its updated Publication 240 regarding the taxability of digital goods. Among other updates, the publication clarifies that taxable “other news or information products” are those products that “disseminate news or information.” The guidance also updates information regarding situations where the transfer of a digital good may not be subject to tax, such as when the digital good is transferred to a customer as incidental to a nontaxable service.

If you think your business may be impacted by sales tax developments or you’re just sick of keeping track of it all on your own, contact TaxConnex. TaxConnex provides services to become your outsourced sales tax department. Get in touch to learn more!

Robert Dumas

Written by Robert Dumas

Accountant, consultant and entrepreneur, Robert Dumas began his public accounting career on the tax staff at Arthur Young & Co., followed by a brief stint at Grant Thornton. In 1998, Robert founded Tax Partners, which became the largest sales tax compliance service bureau in the country, and later sold it to Thomson Corporation. Robert founded TaxConnex in 2011 on the principle that the sales tax industry needed more than automation to truly help clients, thus building within TaxConnex a proprietary platform and network of sales tax experts to truly take sales tax off client’s plates.