Sales and Use Taxes: Services provides readers with information and suggestions to help them conduct efficient transaction planning. Written by Lawrence Fee, J.D., LL.M., Sharon Murphy, CPA, and Paul Mortenson, J.D., CPA, this Portfolio briefly traces the historical development of sales tax generally and taxation of services specifically, analyzing the approach taken by each state in extending the sales tax to encompass service transactions, and it examines evolving issues associated with sales taxation of services.
The bulk of this Portfolio provides state-by-state analysis and reviews the legislation of each state as it relates to miscellaneous taxable services. Although Sales and Use Taxes: Services does not cover contracting, information, computer software, and telecommunications services, it does address all other professional and personal services, repair and installation services, and utility services.
Sales and Use Taxes: Services also addresses two significant areas of evolving issues. One is the judicial and administrative interpretations of transactions involving both sales of services and tangible property. These “mixed transactions” are analyzed using the “true object” test (i.e., whether the “true object” of the consumer is to obtain a tangible item or a service). Different bodies have explicitly referred to the analysis by name or have adopted the approach without explicit endorsement of the term. This Portfolio reviews, on a survey basis, state decisions interpreting the “true object” test.
The other evolving issue addressed in this Portfolio is the use taxation of services benefiting a multistate consuming entity. The specific issue addressed is how such use can and should be taxed in a multistate environment. This analysis is conducted by reviewing two highly publicized efforts to legislate approaches to this issue. These logical but ultimately unsuccessful efforts were made by the states of Florida and Massachusetts.
The included worksheets address the 1982 SIC listings with their respective 1997 NAICS codes, warranties and service agreements, and the taxability of landscaping services.
Sales and Use Taxes: Services 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
1310.01. HISTORICAL DEVELOPMENT
A. Introduction
B. Sales Taxes Generally
C. Taxation of Services
D. Statutory Analysis
E. Observations and Assumptions
1310.02. CURRENT AND EVOLVING ISSUES
A. The True Object Test
1. Variants of the True Object Test
2. The True Object Test in Various States
a. Alabama
b. California
c. Colorado
d. Connecticut
e. District of Columbia
f. Florida
g. Georgia
h. Idaho
i. Illinois
j. Indiana
k. Kentucky
l. Maine
m. Maryland
n. Massachusetts
o. Michigan
p. Minnesota
q. Missouri
r. Nebraska
s. New Jersey
t. New York
u. North Carolina
v. Ohio
w. Oklahoma
x. Rhode Island
y. South Carolina
z. Tennessee
aa. Texas
bb. Virginia
cc. Washington
dd. West Virginia
ee. Wisconsin
B. The Florida And Massachusetts Experiments – Logic That Failed
1. Florida
2. Massachusetts
C. Use Taxation Of Services Under The Florida And Massachusetts Acts
1310.03. ALABAMA
Introductory Material
A. Miscellaneous Taxable Services
B. Professional and Personal Services
C. Repair and Installation Services
D. Utilities
1310.04. ALASKA
1310.05. ARIZONA
1310.06. ARKANSAS
1310.07. CALIFORNIA
1310.08. COLORADO
1310.09. CONNECTICUT
1310.10. DELAWARE
1310.11. DISTRICT OF COLUMBIA
1310.12. FLORIDA
1310.13. GEORGIA
1310.14. HAWAII
1310.15. IDAHO
1310.16. ILLINOIS
1310.17. INDIANA
1310.18. IOWA
1310.19. KANSAS
1310.20. KENTUCKY
1310.21. LOUISIANA
1310.22. MAINE
1310.23. MARYLAND
1310.24. MASSACHUSETTS
1310.25. MICHIGAN
1310.26. MINNESOTA
1310.27. MISSISSIPPI
B. Professional Services
1310.28. MISSOURI
1310.29. MONTANA
1310.30. NEBRASKA
1310.31. NEVADA
1310.32. NEW HAMPSHIRE
1310.33. NEW JERSEY
1310.34. NEW MEXICO
1310.35. NEW YORK
1310.36. NORTH CAROLINA
1310.37. NORTH DAKOTA
1310.38. OHIO
1310.39. OKLAHOMA
1310.40. OREGON
1310.41. PENNSYLVANIA
1310.42. RHODE ISLAND
1310.43. SOUTH CAROLINA
1310.44. SOUTH DAKOTA
1310.45. TENNESSEE
1310.46. TEXAS
1310.47. UTAH
1310.48. VERMONT
D Utilities
1310.49. VIRGINIA
1310.50. WASHINGTON
1310.51. WEST VIRGINIA
1310.52. WISCONSIN
1310.53. WYOMING
Working Papers
Item Description Sheet
Worksheet 1 1987 SIC Matched to 1997 NAICS Services Industries
Worksheet 2 Warranties and Maintenance Agreements
Worksheet 3 Taxability of Landscaping Services
Bibliography
BIBLIOGRAPHY