Sales and Use Taxes: Retail Sales Issues (Portfolio 1360)

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Description

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Authors

Stephanie Lipinski Galland, Esq.

Stephanie Lipinski Galland has extensive legal experience in state and local taxation with an emphasis on representation before state and local taxing authorities in income, franchise, sales, use, and unclaimed property controversies. She has represented clients in developing, implementing, and defending tax positions in state audits. Her experience in a Fortune 500 company, as a tax partner in a national law firm, and in the Virginia Department of Taxation provides her with valuable skills in all areas of taxation.

A frequent author and presenter, Stephanie is sought for her extensive knowledge in the area of taxation. She lectures on the State and Local Tax Program at Georgetown University Law School as an adjunct professor. She earned her B.A. from Christopher Newport University and her J.D., with an Emphasis on Taxation, from the College of William & Mary.

Table of Contents

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

A. In General

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

1. In General

2. Planning

C. 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

1360.07. 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

A. Introduction

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

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

Bibliography