Completely Compliance:
Q1 2024

Written by: Daniel Tilson

Effective January 1, 2024, the threshold amount for the two-level tax structure for retail sales and use tax in the city of Phoenix, AZ is increasing from $11,631 to $13,886. This change reflects the inflation-based adjustment written into the city’s tax code for this threshold. Additionally, there are new state business codes related to this threshold increase. They are as follows: 

Retail Sales, Level 1—Code 017 (No Change) 

Retail Sales, Level 2—Code 164 (Previously 162) 

Remote Retail Sales, Level 1—Code 605 (No Change) 

Remote Retail Sales, Level 2—Code 628 (Previously 626) 

Use Taxable Purchases, Level 1—Code 029 (No Change) 

Use Taxable Purchase, Level 2—Code 168 (Previously 163) 

Written by: Daniel Tilson

Sales and Use Tax Law in California mandates that a qualified purchaser must register with the California Department of Tax and Fee Administration (CDTFA). Previously, a “qualified purchaser” is defined as someone who meets specific conditions, most importantly receiving at least $100,000 in gross receipts from business operations per calendar year. This bill, effective on January 1, 2024, and currently sunsetting on January 1, 2029, modifies the definition of a qualified purchaser. It removes the requirement of receiving at least $100,000 in gross receipts per calendar year and introduces the condition that an entity becomes a “qualified purchaser” if they make more than $10,000 in purchases subject to use tax per calendar year if the use tax on those purchases has not been paid to a retailer. 

Written by: Claire Ashcraft

Illinois Governor JB Pritzker has announced tax relief measures for individuals and businesses affected by the conflict in Israel and Palestine. Impacted taxpayers can request waivers for penalties and interest if they are unable to file returns or make payments for sales, excise, withholding, specialty, and income taxes. The deadline for this relief has been extended to October 7, 2024, covering returns and payments due between October 7, 2023, and October 7, 2024. 

Qualifying for relief includes: 

• Individuals residing in Israel, the West Bank, or Gaza 
• Businesses, sole proprietors, or entities with their primary place of business in the affected area 
• Those with books, records, or tax preparers in the covered area 
• Individuals taken hostage, killed, or injured in the conflict 

• Individuals affiliated with recognized government or philanthropic organizations providing assistance in the covered area 

Taxpayers seeking penalty and interest waivers should submit a written explanation to the Illinois Department of Revenue (IDOR), including their full name, account number, or last four digits of their Social Security number, mailing address, and an estimated time for filing or payment. Requests can be sent electronically or by mail. Mail-in requests should notate “Israeli-Palestinian Conflict 2023” on top of the return in red and the justification for their request. 

Written by: Christina Stainbrook

Beginning on February 6, 2024, Maryland business taxpayers will have access to a new tax portal—Maryland Tax Connect. 

Maryland Tax Connect is initially available for business taxpayers starting in February 2024, and by 2026, the portal will extend its services to encompass all Maryland taxpayers. 

Important Dates: 

• January 22, 2024—Last day bFile will be available for submitting Sales and Use, Withholding and Admission and Amusement tax returns and payments 
• January 23, 2024—bFile will be available to view filing and payment history 

• NOTE: bFile will remain available for the end-of-year electronic filing of W2s and Withholding Reconciliations 

• February 5, 2024—MD Tax Connect welcome letters will be mailed to existing bFile users beginning February 5 
• February 6, 2024—MD Tax Connect go-live for major business taxes 

Written by: Andrea Morrison

Beginning December 1, 2023, until February 29, 2024, Erie County exempts receipts from retail sales of residential energy sources and services, already exempt from New York state tax. However, the Lackawanna School District within Erie County will still impose sales and use tax on residential gas, propane (100 pounds or more), electricity, steam, and related services. The Lackawanna School District’s tax rate has been adjusted to align with the county’s exemption. 

Sales of residential electricity under a solar power purchase agreement remain exempt from state and county sales and use tax, but the Lackawanna School District will continue to apply its sales and use tax at the existing rate. 

“Residential energy sources and services” include natural gas, propane (100 pounds or more), electricity, steam, related services, fuel oil (excluding highway diesel motor fuel), coal, and wood (for heating purposes). Nonresidential energy sources and services are unaffected by these changes. 

Written by: Andrea Morrison

Effective January 1, 2024, Am. Sub. H.B. 33, introduces significant changes to Ohio’s emergency 9-1-1 system. These changes are designed to transition the state to a more advanced Next Generation (NG) 9-1-1 system, which involves hardware, software, data, and operational procedures for processing various emergency calls, including text and multimedia messages. It aims to enhance call routing, data integration, and delivery to the appropriate public safety answering points (PSAPs). 

Beginning January 1, 2024, the existing $0.25 monthly wireless 9-1-1 charge on wireless telephone numbers with in-state billing addresses will be eliminated. In its place, a new monthly NG 9-1-1 access fee will be implemented for any communication service capable of making 9-1-1 calls, encompassing wireless phone service, multiline phone systems, and Voice Over Internet Protocol (VoIP) devices (effective January 2, 2024). This fee will be $0.40 per month until September 30, 2025, after which it will revert to $0.25 per month. 

For prepaid wireless services, the bill maintains the existing 0.005% charge of the retail sale price under the NG 9-1-1 access fee, consistent with previous regulations. These changes represent a shift towards a more advanced and comprehensive 9-1-1 system in Ohio, with adjusted funding mechanisms to support the transition. 

Written by: Andrea Morrison

Starting January 1, 2024, Ohio’s Commercial Activity Tax (CAT) will undergo significant changes. The annual minimum tax is eliminated, and the exclusion amount is raised from $1 million to $3 million, meaning businesses with taxable gross receipts under $3 million annually won’t be subject to CAT. To adapt to these changes, both annual and quarterly taxpayers expecting less than $3 million in taxable gross receipts in 2024 can cancel their CAT accounts immediately, effective December 31, 2023. This can be done through the Gateway or by submitting a Business Account Update Form. 

For the 2023 tax year, the final return for annual filers is due on May 10, 2024. Annual taxpayers should cancel their CAT accounts when filing their last 2023 returns, using December 31, 2023, as the effective date. Quarterly taxpayers anticipating $3 million or less in taxable gross receipts in 2024 should file their final returns by February 12, 2024, and cancel their CAT accounts with an effective date of December 31, 2023. 

Further changes are expected on January 1, 2025, when the exclusion amount increases to $6 million. Taxpayers with taxable gross receipts under $6 million annually won’t be subject to CAT. Quarterly taxpayers expecting $6 million or less in taxable gross receipts in 2025 should file their final returns by February 10, 2025, and cancel their CAT accounts with an effective date of December 31, 2024. Taxable gross receipts exceeding $6 million will be taxed at 0.26%.