Completely Compliance:
Q2 2024

Updates by State

• Alabama: Possible Increase With Simplified Sellers Use Tax
• Alaska: Marketplace Facilitator Tax
• California: Sales Tax Holiday
• Canada: New GST/HST Electronic Filing Requirements
• Colorado: Carryout Bag Fee Remittance Started January 1, 2024
• Massachusetts: Amnesty for 2025
• Michigan: Payment Platform Change
• Minnesota: Retail Delivery Fee
• Minnesota: Vendor’s Discount
• Oklahoma: Exempts Food from Sales Tax

Alabama: Possible Increase With Simplified Sellers Use Tax

Written by: Adore Walker

HB17 was sent to Committee in February. The bill would increase the Simplified Sellers Use Tax (SSUT) from 8% to 9.25%. If passed, it would be effective September 1, 2024.

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Alaska: Marketplace Facilitator Tax

Written by: Daniel Tilson

Introduced at the end of February, HB378 includes language to establish a 2% marketplace facilitator sales tax. As standard with multiple states, there is a threshold of $100,000 from revenue of delivered property or services or 200 transactions. For multiple years now, the state has tried to establish a state level sales tax. To date, the bills have not passed.

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California: Sales Tax Holiday

Written by: Daniel Tilson

Seeing recent movement, AB-2274 would introduce a longer-term sales tax holiday in California. If enacted, qualified school supplies would be exempt from January 1, 2025 to December 31, 2030. Qualified school supplies include standard items such as book bags, crayons, erasers, and glue; a complete listing is provided as part of the bill.

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Canada: New GST/HST Electronic Filing Requirements

Written by: Christina Stainbrook

For GST/HST reporting periods that begin in 2024, all GST/HST registrants, except for charities and selected financial institutions, are required to file returns electronically.

The mandatory electronic filing threshold that was in place for GST/HST returns has been removed for reporting periods that begin on or after January 1, 2024. Electronic filing is now required for most businesses.

Penalties

Registrants mandated to electronically file their GST/HST returns and fail to do so will incur the following penalties:

• $100 for the initial return not filed electronically
• $250 for each subsequent return not filed electronically

This penalty is applicable regardless of whether the GST/HST return is nil or a credit return. For annually filing GST/HST registrants, this penalty will only be applicable to their 2024 returns due in 2025.

Penalty Waivers

To assist GST/HST registrants who file monthly or quarterly and were not previously obligated to file electronically, the CRA will waive penalties for non-compliance with electronic filing requirements for filing periods starting on or after January 1, 2024, and before April 1, 2024, as illustrated in the following scenarios:

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Colorado: Carryout Bag Fee Remittance Started January 1, 2024

Written by: Daniel Tilson

In 2021, the Colorado General Assembly enacted House Bill 21-1162, imposing a 10-cent fee on all carryout bags. Between January 1, 2023 and January 1, 2024, stores could provide a paper or single-use plastic bag for customers at the cost of 10 cents per bag.

Starting on January 1, 2024, businesses are only allowed to provide a recycled paper bag to customers at the cost of 10 cents per bag, or higher if imposed by a local jurisdiction. Each business is required to remit 60% of the fee to the local jurisdiction (city or county) in which the business is located quarterly, starting on April 1, 2024. The business may retain the remaining 40% of the fee.

This does not apply to any materials used to package pharmaceuticals, medical devices, dietary supplements, or any equipment used to manufacture those products. It also does not apply to any customer who provides evidence that they are a participant in a federal or state food assistance program.

This fee is not subject to any state tax but may be subject to a local tax. An inquiry with local jurisdictions will need to be made to determine the taxability of the fee.

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Massachusetts: Amnesty for 2025

Written by: Andrea Morrison

Per the released budget in January, a provision for a tax amnesty program was outlined for 2025.

The provision allows taxpayers to have penalties waived for failing to file proper returns or pay tax liabilities within a specified period. The program covers tax returns due on or before December 31, 2024, and may apply limited look-back periods for unfiled returns. It runs for 60 days within fiscal year 2025, with payments required by June 30, 2025. Taxpayers must file required returns and pay taxes during the amnesty period, with penalties waived except for certain circumstances such as tax-related criminal investigations or fraudulent disclosures. The commissioner maintains records of waived penalties and must report details of the program to specified committees by September 1, 2025. Additionally, measures are implemented to prevent repeat use of the amnesty program by taxpayers for the following 10 years.

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Michigan: Payment Platform Change

Written by: Amanda Bratton

Effective April 13, 2024, the Michigan Treasury Online (MTO) payment platform will change from PayConnexion to Paymentus. Along with this transition, MTO’s Company ID that is used for any bank accounts with an ACH Debit Block will be changing. Some new features that Paymentus will provide include a same-day payment option and the ability to save payment information for future use.

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Minnesota: Retail Delivery Fee

Written by: Amanda Bratton

Effective July 1, 2024, Minnesota will implement a Retail Delivery Fee of 50 cents for certain retail delivery transactions where the total charges are $100 or more. Drugs, medical devices/accessories/supplies, food/food ingredients/prepared food, and some baby products should not be included when calculating the $100 threshold.

Only retailers with total retail sales of $1,000,000 or more or marketplace facilitators with total retail sales of $100,000 or more in Minnesota in the previous calendar year will be liable for collecting the fee, which will be reported on the Retail Delivery Fee tax line of the Sales and Use Tax Return.

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Minnesota: Vendor’s Discount

Written by: Amanda Bratton

HF3764 was introduced in February, which would allow businesses to claim a vendor’s discount when filing a return. The discount will be tiered based on tax liability, including:

• 2% for vendors with sales tax liability less than $60,000 in the fiscal year ending June 30
• 1% for vendors with sales tax liability between $60,000 and $600,000 in the fiscal year ending June 30
• 0.75% for vendors with sales tax liability greater than $600,000 in the fiscal year ending June 30

If passed, the discount would take effect for sales after June 30, 2024.

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Oklahoma: Exempts Food from Sales Tax

Written by: Zach McCauley

Passed on February 27, 2024, HB1955 eliminates state sales tax from retail sales of food and food ingredients. The bill does define products that are included or excluded from the exemptions. Local taxes do not directly apply to the exemption and may still be applicable.

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