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The US Supreme Court has ruled in South Dakota v Wayfair, Inc. that retailers can choose to charge tax on online purchases, regardless of whether the consumers have a physical presence in the same state, overturning 26 years of precedent barring states from taxing out-of-state sellers. This is sure to be regarded as a landmark decision for state and local taxation and seen as a heavy blow to online retailers throughout the United States, as well as foreign based internet retailers.

The decision was a very close 5-4 decision which overturned a 1992 Supreme Court ruling in Quill, that prevented states from imposing sales taxes on catalog and mail-order companies that did not have a physical presence in the state (physical presence included an office, warehouse, employees et…). That ruling came just prior to the internet boom, and was the basis for online retailers avoiding the collection of sales taxes on purchases made on their websites.

 
Although the case addresses the South Dakota law requiring online retailer Wayfair to collect sales tax regardless of whether it has a physical presence there, the Supreme Court ruling has significant implications nationwide.

Currently, over thirty state have some sort of rule that taxes internet sellers without physical presence. Some of those statutes were to take affect when the Supreme Court abrogated the requirement that a vendor have physical presence in order to be subject to sales taxation. That day has come and companies must now scramble to come into compliance with state sales taxation.

A report from the Government Accountability Office in December 2017 found that states are losing up to $13 billion because they could not compel remote sellers, especially internet sellers, to collect and remit tax.

Have a IRS Tax Problem? 

 

Contact the Tax Lawyers at 

Marini& Associates, P.A. 

 

 

for a FREE Tax HELP ... Contact Us at: www.TaxAid.com or www.OVDPLaw.com or
Toll Free at 888-8TaxAid (888) 882-9243



The House Appropriations Committee on June 13, 2018 approved a $23.4 billion Financial Services and General Government funding bill for fiscal year 2019 that includes increased spending for IRS.

The measure provides an additional $77 million as requested by the White House to help implement the Tax Cuts and Jobs Act (TCJA; P.L. 115-97) signed into law in late 2017. Congress had already approved an additional $320 million in March 2018 for the same purpose.

The spending bill also includes a provision that prevents IRS from denying a tax exemption under Code Sec. 501(a) with respect to a church for participating in, or intervening in, any political campaign on behalf of any candidate for public office unless determined by the IRS Commissioner that the exemption should be denied. The IRS Commissioner has 30 days to notify the tax writing committees of such a decision.

The Senate Appropriations Subcommittee on Financial Services and General Government on June 19, 2018 advanced a $23.688 billion funding measure of which IRS would receive $11.263 billion, with $77 million dedicated to implementation of tax reform. IRS funding in both bills represents approximately $186 million more than the 2018 funding level.

In addition, the bill includes: a prohibition on funds for bonuses or to rehire former employees unless employee conduct and tax compliance is given consideration; a prohibition on funds for IRS to target groups for regulatory scrutiny based on their ideological beliefs; a prohibition on funds for IRS to target individuals for exercising their First Amendment rights; and a prohibition on funds for the production of inappropriate videos and conferences.

The bill will be considered by the full Senate Appropriations Committee on June 21, 2018 before being sent to the Senate floor for final approval. The measure would then need to be reconciled with the House version.

Have a IRS Tax Problem? 

  

Contact the Tax Lawyers at 

Marini& Associates, P.A. 

 

 

for a FREE Tax HELP Contact Us at:

www.TaxAid.com or www.OVDPLaw.com or

Toll Free at 888-8TaxAid (888) 882-9243

Sources:

Tom Graves

Thomson Reuters

All entities are now pursuant to the 2017 Tax Cuts & Jobs Act (TCJA) liable for penalties due to overpaying employees.

For-profit companies have been at risk for losing their tax deduction for excessive salaries, with publicly-traded companies subject to a specific $1 million limit that the TCJA made easier to exceed.

Certain nonprofit organizations have been at risk for “intermediate sanctions,” but the Act also created a new Internal Revenue Code (Code) section that places tax-exempt organizations and governmental entities at risk for a 21 percent excise tax for excessive compensation.