TWIST - December 21, 2020

Welcome to TWIST for the week of December 21, featuring Sarah McGahan from the Washington National Tax State and Local Tax practice.

In indirect tax news, the recently signed 2021 Massachusetts appropriations bill includes provisions requiring certain vendors to make accelerated sales tax payments. Under current law, sales tax payments and returns are generally due the 20^th day of the month after the period ends. Under the revised law, vendors with sales tax liability of more than $150,000 in the preceding calendar year are required to remit taxes collected on any taxable sale made on or before the twenty-first day of the filing period by the twenty-fifth day of that period. This change is effective April 1, 2021.

In South Carolina, the Administrative Law Court recently held that a taxpayer, a home improvement retailer, was properly assessed retail sales tax on items/materials that it subsequently installed in customer’s homes. The taxpayer had remitted use tax on the materials/items identified in the contract based on its wholesale cost. On audit, the Department disagreed with this position, and the Administrative Law Court ultimately agreed, holding that the taxpayer’s customers were the final purchasers of the items.

In Louisiana, the legislature enacted measures making certain taxpayer-favorable changes to the state’s inventory tax credit. Under Louisiana law, an income and franchise tax credit is allowed certain businesses on property taxes paid to political subdivisions for inventory located in the jurisdiction.   If the amount of the credit exceeds the taxpayer’s liability for the tax year, the credit is either fully or partially refundable with the remainder being carried forward. Under one of the bills, the carryforward period is extended from five to ten years.  Another bill treats certain property tax payments made after December 31, 2020 as being made in 2020 for purposes of the property tax credits.  

Finally, The New Jersey Division of Taxation has issued guidance, TB-97, on recently-enacted technical corrections to the Corporation Business Tax (CBT) law. The technical corrections included clarifying and procedural changes, as well as certain substantive CBT law changes. One of the retroactive changes was to require taxpayers that make the affiliated group election to include certain non-U.S. entities in the group. TB-97 notes that the change may affect a combined group’s filing method decision and that the Division will be issuing a notice to address this issue shortly.

Thank you for listening to our last TWIST for 2020. Have a wonderful holiday season and stay safe.