Sales and Use Taxes: Retail Sales Issues explains the sales taxation of retailers both in terms of taxes the retailer pays and the taxes the retailer is required to collect. Written by Susan S. Jones and Marilyn A. Wethekam, Esq., Horwood, Marcus & Berk, Chtd., this Portfolio begins with a discussion of the states' ability to require collection of sales and use taxes. It identifies apportionment issues and methods of accounting for sales and use tax returns, and it identifies key jurisdiction and nexus issues, including:
This Portfolio also addresses how changes in technology have impacted compliance through changes in electronic transmission. In addition, many specific topics relating to items potentially taxable to the retailer, including direct mail advertising, gifts, and promotional items, are discussed. Sales and Use Taxes: Retail Sales Issues concludes with a discussion of audit methodology and the requirement to keep adequate records, including exemption certificates.
Sales and Use Taxes: Retail Sales Issues allows you to benefit from:
This Portfolio is part of the Premier State Tax Library, a comprehensive series, which covers major state tax transactions and issues with expert, in-depth analysis, and offers commentary on a wide range of multi-state and state-specific taxation topics, including Sales and Use, Corporate Income, Individual Income, Property, Gross Receipts, Limitations on States' Authorities to Tax, Credits and Incentives, Electronic Commerce, Mergers and Acquisitions, Procedure and Administration, Special Industries, and more.
Detailed Analysis
1360.01. SALES AND USE TAXES - OVERVIEW
A. Introduction
B. Definition of Retailer and Retail Sale
C. Jurisdiction and Nexus Issues
1. States Ability to Require Collection of Tax
2. Mail Order Sales
3. Internet Tax Freedom Act
4. Streamlined Sales Tax Project (SSTP)
5. State Legislation
6. Court Cases
a. National Bellas Hess Inc. v. Illinois Department of Revenue
(1) Litigation in Response to Bellas Hess-L.L. Bean and Bloomingdale's By Mail
(2) Other Litigation
b. Quill Corporation v. North Dakota Department of Revenue
7. Current Developments in Nexus Cases
a. Affiliate Nexus
b. Independent Agents Creating Nexus
c. Delivery Vehicles
d. Physical Presence
e. Trade Shows and Other Sporadic Visits
D. Apportionment Issues
E. Methods of Accounting for Sales and Use Tax Returns
F. Bad Debts
G. Drop Shipments
1360.02. SALES PRICE
A. In General
B. Miscellaneous Charges and Fees
1. Lay–Away Fees
2. Set–Up Charges vs. Installation Labor
3. Repossessions, Returned Goods, and Partial Refunds
4. Warranties
5. Packaging
1360.03. SHIPPING AND HANDLING CHARGES
B. State-by-State Analysis
1. Alabama
2. Alaska
3. Arizona
4. Arkansas
5. California
6. Colorado
7. Connecticut
8. Delaware
9. District of Columbia
10. Florida
11. Georgia
12. Hawaii
13. Idaho
14. Illinois
15. Indiana
16. Iowa
17. Kansas
18. Kentucky
19. Louisiana
20. Maine
21. Maryland
22. Massachusetts
23. Michigan
24. Minnesota
25. Mississippi
26. Missouri
27. Montana
28. Nebraska
29. Nevada
30. New Hampshire
31. New Jersey
32. New Mexico
33. New York
34. North Carolina
35. North Dakota
36. Ohio
37. Oklahoma
38. Oregon
39. Pennsylvania
40. Rhode Island
41. South Carolina
42. South Dakota
43. Tennessee
44. Texas
45. Utah
46. Vermont
47. Virginia
48. Washington
49. West Virginia
50. Wisconsin
51. Wyoming
1360.04. GIFTS AND PROMOTIONAL ITEMS
A. Gifts and Premiums
B. Gifts - Other Issues
1. Gifts of Merchandise to Charitable Organizations
2. Applying Use Taxes to Gifts in a Multistate Situation
C. Prizes
D. Coupons and Discount Cards
1. Vendor Coupons and Discounts
2. Manufacturer Coupons and Discounts
3. Coupon Books
E. Trading Stamps
F. Demonstrators
G. Samples
1360.05. EXEMPTION CERTIFICATES
A. Overview of Exemptions
B. Documenting Tax-Exempt Sales
C. Maintaining the File
D. Exemption Certificate Forms
1. In General
2. MTC Uniform Exemption Certificate
3. Blanket Exemption Certificates
E. Audit Problems Related to Exemption Certificates
F. Sales to Other Exempt Groups
1360.06. TAXATION OF DIRECT MAIL AND ADVERTISING SUPPLEMENTS
A. Direct Mail Advertising Materials
1. Early Court Cases
2. D.H. Holmes Co. v. McNamara
3. Statutory Exemptions
4. Determining the Taxable Base
5. Planning
B. Newspaper Advertising Supplements-Newspaper Inserts
2. Planning
C. State-by-State Analysis
1360.07. ELECTRONIC DATA INTERCHANGE (EDI) AND ELECTRONIC FUND TRANSFERS (EFT)
Introductory Material
A. Definitions
B. Model EDI Regulations
C. Federal EDI Initiatives
D. Specific EDI Issues for Retailers
1360.08. PROCUREMENT CARDS
A. Background
B. Advantages
C. Disadvantages
D. Sales and Use Tax Considerations
E. Example States
1. Florida
2. Virginia
1360.09. AUDIT ISSUES
A. Audit Techniques
B. States' Use of Outside Auditors
C. Nontraditional Audits
D. Effective Rate Agreements
1360.10. LOCAL SALES AND USE TAXES
B. Administration
C. Sourcing of Sales
D. Nexus
1360.11. OTHER TYPES OF TAXES
A. Income Taxes
1. Apportionment of Retailers
2. Tax Credits
B. Property Taxes
Working Papers
Item Description Sheet
Worksheet 1 Electronic Funds Transfer (EFT)
Worksheet 2 Rev. Proc. 98-25 1998-11 I.R.B. 7 (3/16/98)
Worksheet 3 Model Recordkeeping and Retention Regulation
Worksheet 4 Model Recordkeeping and Retention Regulation Explanation and Commentary
Worksheet 5 California Sales and Use Tax Regulation 1698 (Amended 6-26-97; eff. 10-4-97)
Worksheet 6 Uniform Sales and Use Tax Certificate Multijurisdiction
Bibliography