Completely Compliance: Q2 2022

ANOTHER YEAR FOR POSSIBLE ALASKA STATE SALES TAX

Per HB 373, the state could impose a state sales tax. The bill also includes language on remote sellers, noting a $100,000 threshold on sales or 200 transactions. Returns will be due on the last day of the month and the proposed rate will be 2%. If passed, the tax will be effective July 1, 2022.

NEW ALASKA LOCALS JOIN THE ARSSTC

The City of Quinhagak will join the Alaska Remote Seller Sales Tax Commission. The new jurisdiction will be available on June 1, 2022.

COLORADO CHANGES DISCOUNT REQUIREMENTS

The net taxable sales reported to the state of Colorado could determine the eligible service fee. Retailers with more than $1 million in taxable sales no longer qualify for the state service fee effective January 1, 2022.

COLORADO DESTINATION SOURCING RULES

In lieu of the Wayfair ruling, Colorado changed to destination-based sourcing in 2019 but allowed businesses extended periods of time to comply. Businesses with over $100,000 in sales were already required to use destination sourcing. Effective October 1, 2022, all businesses must comply and there will not be exceptions.

In a continuation from 2021, the state has issued a notice of tax relief for businesses that sell meals. For designated periods of time, the business will be allowed to retain the tax collected as a form of assistance. To qualify, businesses must sell meals and be registered under the NAICS code under sector 72. Three periods are offered, and a business may select one. The 2022 period is May 15 through May 21, 2022.

IOWA BILL PROPOSES RATE REDUCTION ON AMERICAN PRODUCTS

HF 2180 was introduced in February and moved to Ways and Means. The bill proposes to reduce the sales tax from 6% to 3% on any American-made products sold by certified manufacturers.

MORE CHANGES COMING IN IOWA

By February 4, 2022, business filers needed to transition their eFile & Pay accounts to the new site called govconnectiowa. After this date, the old system is disabled and no longer accessible.

The Department of Revenue has been updating statutes with the implementation of the new GovConnectIowa.com system. Pending the approval by the Iowa Legislature and the Governor, some future changes will include:

1. Filing on a monthly basis instead of quarterly
2. One combined return for sales and use taxes
3. Removal of semi-monthly payments
4. Annual filing threshold to increase to $1,200
5. Requiring monthly filers to file on GovConnectIowa.com

HB 2720 was introduced on February 23, 2022. The bill would provide a zero sales tax rate on the sale of food items as defined by K.S.A. 79-3603(x). If passed the zero-tax rate would be effective on August 1, 2022.

Last month, HB 1405 was referred to committee. The bill would reduce the sales and use tax rate from 6% to 5% for a 12-month period. If passed, the reduction would be in effect on July 1, 2022.

Massachusetts is set to implement new changes for the ST-9 and ST-MAB-4 2022 sales tax forms. The changes include a new section to allow filers to report advanced payments. Advanced payments, in tandem with current tax due, will allow taxpayers to true-up any unaccounted liability. The change to the 2022 ST-9 form will be shown on lines 8 and 9.

Massachusetts advanced payments are calculated by: (1) total tax collected between the 1st and 21st of the previous month, or (2) at minimum, 80% of the prior month’s liability. Advanced payments must be paid by the 25th of the following month.

In addition to the ST-9 changes, Massachusetts has also updated the ST-MAB-4 which is used for reporting meals, prepared food, and beverage tax. The changes require taxpayers to distinguish sales on a cash and credit basis. The Massachusetts Department of Revenue will allow estimations for cash and credit sales until June 2022. Also, a new section on the return will require filers to list the point-of-sale system (POS) from a pull-down menu. Included with the changes mentioned above, Massachusetts will no longer require alcohol sales to be reported separately on the ST-MAB-4.

Businesses will no longer be required to make the accelerated payment in June for the state of Minnesota. The state does remind businesses that standard June returns are still required and due by July 20, 2022.

Passing both the House and the Senate, HB 531 will increase the sales and use tax rate from 7% to 8.5% effective July 1, 2022. The bill, known as the Mississippi Tax Freedom Act of 2022, includes a variety of changes including personal exemptions and tax on food.

Per the Missouri Department of Revenue’s 2022 tax calendar, the due date for sales tax, consumers use tax, vendors use tax, and the tire and lead-acid battery fee, and returns can now be filed on or before the last day of the following month the tax was collected. This is applicable to monthly filers.

On March 8, 2022, Governor Grisham signed HB 163. The bill will reduce the gross receipts and compensating use tax rates over the next year. From July 1, 2022, through June 30, 2023, the rate will be reduced from 5.125% to 5%. On July 1, 2023, the rate will again be reduced to 4.875%.

To access the New York tax portal, taxpayers will now have a new URL address. The new address will prompt new ID and security questions. Select “Log In” on the web page, and it will direct you to the new ID portal.

Similarly to Kansas, Oklahoma, SB 1495 passed the Senate on March 23, 2022. The bill would also reduce the sales tax rate on the sale of food and food ingredients to zero percent.

HB 2330 was introduced in February to allow the local counties to levy their own tax on the sale of tangible personal property. The proposed tax would be 1% of the purchase and would be administered by the state. If passed, the bill would be effective immediately.

VIRGINIA EXPIRES PPE EXEMPTION

In March 2021, the state of Virginia issued an exemption on all Personal Protective Equipment (PPE). Effective March 24, 2022, the exemption is repealed and purchases of PPE will be taxable.

VIRGINIA DISPOSABLE BAG FEE UPDATE

Falls Church, Virginia is another city that will be imposing a bag tax. The standard rate will apply ($0.05 per bag) and is effective April 1, 2022.

For nonprofit organizations, the state of Wisconsin issues a six-digit Certificate of Exempt Status (CES). Effective July 1, 2022, a new 15-digit CES will be the only acceptable certificate for proof of exempt status. The CES will begin at 008. Currently, retailers will not be required to obtain new certificates but will need to obtain the new number from their nonprofit customers.