Dear Intelligence for Taxation Readers:

Welcome to the September issue of Intelligence for Taxation.  This edition includes news on taxability determinations, a report on the latest Streamlined Sales Tax decisions, rate changes, and rulings on personal and corporate liability.

Florida: Separately Itemized Non-Mandatory Gratuities Not Taxable  

Separately itemized non-mandatory gratuities billed by a restaurant to its guests and distributed in their entirety to employees are not subject to Florida sales tax. The charges qualify as nontaxable gratuities because they are billed separately to the guests, they are identified as service charges, the full amount collected is distributed to the employees, and no benefit from the charge is received by the restaurant. Technical Assistance Advisement, No. 06A-022, Florida Department of Revenue, August 2, 2006.

Florida: Concession Fees Paid to Airports Not Taxable

Privilege, franchise, or concession fees or fees for a license to do business paid to an airport are not payments for leasing, letting, renting, or granting a license for the use of real property and, as such, are not subject to Florida sales and use tax. The value of capital improvements, however, required by a lease agreement as a condition of occupancy that remain with the lessor after the term of the lease would be considered "rent consideration" and would be subject to sales tax. Technical Assistance Advisement, No. 06A-024, Florida Department of Revenue, August 8, 2006.

Florida: Guidance Issued Regarding Second-Hand Dealers and Goods

Guidance is provided regarding recently enacted legislation that made changes to provisions with respect to second-hand dealers and goods effective October 1, 2006, for Florida sales and use tax purposes. The definitions of "second-hand dealer" and "second-hand goods" are discussed, as well as recordkeeping, penalties, the electronic transfer of data to law enforcement, the holding period for suspected stolen goods, registration, the background investigation period, and technical wording revisions. Tax Information Publication, No. 06A01-08, Florida Department of Revenue, August 28, 2006.

Indiana: Gas Predominantly Used in Manufacturing Exempt

A boat manufacturer established that natural gas that was used to maintain a constant temperature at its facility and measured from a single meter was predominantly used for manufacturing purposes and thus was eligible for exemption from Indiana sales tax. The taxpayer showed that in addition to spray booths for paint and decal work, other areas of the facility had to be heated within certain parameters in order to properly manufacture boats. Fiberglass used to make hulls and glue used to assemble them had to be maintained at certain temperatures to produce a marketable product. An exempt use rate of 62.2% was approved for the taxpayer. Letter of Findings No. 04-20050063, Indiana Department of Revenue, August 2006.

Minnesota: Installation, Fabrication, and Repair Labor Charges Discussed

Installation labor that is part of a taxable sale is subject to Minnesota sales tax, even if the installation charges are separately stated. If the item being sold is taxable, the installation charge is also taxable. Furthermore, a third party installer must charge tax on the installation of an item if the seller of the item would have been required to charge tax on the installation. Fabrication labor is taxable if the item being modified or created is taxable. Separately stated charges for repair labor are not taxable. However, if the repair includes replacing a malfunctioning component of an item with a significantly different component, the charge for such replacement is taxable as a charge for installation labor. Revenue Notice No. 06-11, Minnesota Department of Revenue, September 11, 2006.

Minnesota: Rules Regarding Deductions Amended, Repealed

A Minnesota sales and use tax rule regarding deductions allowable in computing the sales price is amended to delete provisions regarding interest on an unpaid balance, carrying and financing charges, discounts, and federal taxes. Therefore, the only provisions remaining in this rule pertain to refunds for property adjustments. Also, a rule regarding deductions not allowable in computing the sales price is repealed. Rules 8130.1600 and 8130.1700, Minnesota Department of Revenue, effective September 18, 2006.

Minnesota: Woodwork Prefinishing Taxable

Labor and automated services charged to a construction contractor or other customer for prefinishing woodwork before the woodwork is installed in a house or building are subject to Minnesota sales and use tax. The Minnesota Department of Revenue takes the position that prefinishing woodwork constitutes the fabrication of tangible personal property, and the prefinishing is taxable regardless of whether the unfinished product was purchased by the contractor or the customer. The Department is enforcing this position for sales and purchases made on or after January 1, 2006, and it will not issue refunds for taxes collected on prefinishing woodwork before that date. However, the tax does not apply when contractors or their employees prefinish woodwork themselves and also install it, or when real property owners buy unfinished woodwork and prefinish it before installing it on their property. Revenue Notice No. 06-10, Minnesota Department of Revenue, September 11, 2006.

New Jersey: Information Provided on Space for Storage

The New Jersey Division of Taxation has provided information on recently enacted legislation imposing sales and use tax on the furnishing of space for storage of tangible personal property by a person engaged in the business of furnishing space for such storage, effective October 1, 2006. Charges for the service of storing all tangible personal property not held for sale in the regular course of business and the rental of safe deposit boxes or similar space remain subject to tax. The distinction is that the new law extends the tax to transactions where the facility merely provided the space, but not any services. On and after October 1, 2006, charges for a "self-storage" or "miniwarehouse" unit are subject to sales tax. Rental payments made prior to October 1, 2006, are not subject to sales tax with respect to rental periods that end on or before September 30, 2006. Tax Notes, New Jersey Division of Taxation, August 31, 2006.

New Jersey: Cities Authorized to Collect Certain Local Taxes

Any city imposing a hotel use or occupancy tax is authorized to collect both the real property tax and the hotel use or occupancy tax on hotels located in those cities. Ch. 97 (A.B. 3191), Laws 2006, effective September 13, 2006.

New York: Refund Allowed on Uncollectible Credit Card Accounts

A retailer or lender may claim a New York sales tax refund, deduction or credit when sales tax is paid up front on the entire amount of the sales price of a taxable item in an installment or credit sale and a portion of the purchase price is charged off as uncollectible for federal income tax purposes.

Pennsylvania: List of Taxable and Exempt Property Updated

The Pennsylvania Department of Revenue has updated the list of taxable and exempt property for Pennsylvania sales and use tax purposes. Licenses to use canned computer software are added to the list of taxable business supplies and equipment.

Under the category for food and beverages sold from other than a caterer or establishment selling ready-to-eat food, nontaxable items include caramel corn, cold bottled and flavored coffee, party trays, pumpkins for food, and soy milk. Kettle Korn, Kool Aid, pumpkins for decoration, and sports drinks are taxable.

Under the category of medicine, drugs and medical supplies, and prosthetic and therapeutic devices, the list of taxable property includes MRI equipment and teeth whitening strips. The list of nontaxable property includes alcohol swabs and wipes, glucose tablets, lancets, and medicated powder. The description of nontaxable stair gliders for persons having physical disabilities is amended to add that the gliders must be installed in the purchaser's home under a physician's prescription. The description of nontaxable wheelchairs is amended to provide that wheelchairs may be motorized or manual and to include scooters. Nontaxable Mercurochrome is removed from the list.

Under the category for miscellaneous items, new nontaxable items and services include investment metal, body tattooing and piercing, health club membership fees, investment coins, parking fees, and tanning booth fees. Taxable items include Christmas trees, dispensed compressed air, corkage fees, global positioning satellite equipment and service, and hot tubs and spas regardless of physician recommendation.

Under the category for pets, farrier services for pet horses and veterinarian equipment are taxable, and the taxable sale or rental of pets includes adoption from shelters and fees for shots and spaying or neutering.

Under the category for restaurant equipment and supplies, chef hats and work uniforms are not taxable while disposable trays, latex gloves, placemats, and toothpicks are taxable.

Under the category for sporting equipment, clothing, supplies, and recreational equipment, taxable items include hunting accessories, skate sharpening, and the purchase and rental of bowling shoes. Nontaxable hunting clothing includes camouflage and blaze orange (previously, hunting wear, reflecting orange, was taxable). Under the category for utilities and fuel, corn pellets are taxable.

Texas: Sales Tax Regulations Updated

Several Texas sales and use tax regulations have been amended to make technical changes.

• The regulation regarding auctioneers, brokers, and factors has been updated to reflect the new title of another regulation referenced therein.
• The regulation regarding gold, silver, coins, and currency has been update to delete obsolete provisions and references.
• The regulation regarding the oyster sales fee has been updated to make references to the Seafood and Aquatic Life Group (formerly, Seafood Safety Division) and to the Department of State Health Services (formerly, Department of Health)
• The regulation regarding repair, remodeling, maintenance, and restoration of tangible personal property has been updated to reflect the new titles of other regulations referenced therein and to make clarifying changes.

Washington: Rule Explaining Research and Development Incentives Updated

A Washington rule explaining the sales and use and business and occupation (B&O) tax incentives for businesses engaged in high-technology research and development or pilot scale manufacturing is updated to reflect legislative changes made in 2004 and 2005. The incentives apply to businesses working in the fields of advanced computing, advanced materials, biotechnology, electronic device technology, and environmental technology. As amended, the rule explains the computation of the B&O tax credit on or after July 1, 2004, and for other periods under prior law. The amended rule also describes changes in the sales and use tax deferral program as of June 10, 2004. WAC 458-20-24003, Washington Department of Revenue, effective October 1, 2006.

Alabama: Local Tax Rates Increased

• Auburn Raises Lodgings Tax Rate. The Alabama Department of Revenue has announced that effective February 1, 2006, the city of Auburn in Lee County increased its local lodgings tax rate from 4% to 7%.
• Coffee Springs Increases Tax Rates. Effective October 1, 2006, the town of Coffee Springs in Geneva County increases its local Alabama sales tax general rate and rate for the retail selling price of food sold through vending machines from 1% to 2%. The general use tax rate is increased from 0.5% to 2%. The rate for farm machinery and equipment, manufacturing machinery, and automotive vehicles and trailers remains at 0.5.
  

Arizona: Electronic Payments, Local Tax Changes Discussed

• The city of Litchfield Park increased its local transaction privilege tax rate for construction contracting from 2% to 4%, effective June 17, 2006. Preexisting contracts continue to be reported at the 2% tax rate.
• The town of Gila Bend removes the two level tax structure on big ticket items by deleting option V, effective November 1, 2006. Thus, the full cost of items costing over $1,200 will be taxed at the rate of 3%.
  

Florida: Orange County Increases Tax Rate

The local option tourist development tax rate in Orange County, Florida, is increased from 5% to 6% effective September 1, 2006. The increase brings the total tax rate on living and sleeping accommodations in the county to 12.5%.  

Georgia: County Rates Unchanged for Fourth Quarter of 2006

The Georgia Department of Revenue has announced that county sales and use tax rates for the fourth quarter of 2006 are unchanged from the previous quarter's rates.

Hawaii: County Surcharge Tax May Be Passed On to Customers

Sellers may pass on to their customers the 0.5% Hawaii county surcharge tax, which will be imposed by the city and county of Honolulu on the island of Oahu beginning January 1, 2007. On Oahu, the maximum rate of the state general excise tax and county surcharge tax that sellers may pass on to customers is 4.712%. This rate is equal to the 4% general excise tax rate plus the 0.5% county surcharge tax rate, divided by 95.5%.

For purposes of calculating the tax rate that sellers may pass on to customers, the tax rate on Oahu is divided by 95.5% because the tax is levied on the seller's gross receipts, and "gross receipts" are defined to include any tax that the business passes on to the customer. Thus, gross receipts of a seller on Oahu consist of two parts: (1) the tax, which is 4.5% of gross receipts and (2) the price, which is 95.5% of gross receipts. A seller on Oahu has the option of passing on no tax to the customer, passing on the state and local taxes at the rate of 4.5%, or passing on the state and local taxes at the optimum rate of 4.712%.

Missouri: Local Tax Rate Changes Announced

The following Missouri local sales tax rate changes are effective October 1, 2006.

• Atchison County imposes a 0.5% law enforcement sales tax. Its total sales tax rate is 6.475% and its total use tax rate is 6.475%. The county rate change affects the following cities in Atchison County (total sales tax rates are in parentheses): Fairfax (7.475%); Langdon (6.475%); Phelps City (6.475%); Rock Port (8.225%); Tarkio (7.975%); Watson (6.475%); and Westboro (6.475%).
• Boone County imposes a 0.20% capital improvements sales tax. Its total sales tax rate is 5.55% and its total use tax rate is 4.225%. The county rate change affects the following cities in Boone County (total sales tax rates are in parentheses): Ashland (7.05%); Centralia (7.55%); Columbia (7.55%); Hallsville (6.55%); Harrisburg (6.55%); Hartsburg (6.05%); McBaine (5.55%); Midway (5.55%); Prathersville (5.55%); Rocheport (7.05%); Sturgeon (7.55%); Wilton (5.55%); and Village of Pierpont (6.05%).
• Jackson County imposes a .375% capital improvements sales tax. Its total sales tax rate is 5.35% and its total use tax rate is 4.225%. The county rate change affects the following cities in Jackson County (total sales tax rates are in parentheses): Atherton (5.35%); Blue Springs (6.85%); Blue Summit (5.35%); Blue Vue (5.35%); Buckner (7.35%); Grain Valley (7.35%); Grandview (7.85%); Grandview Crossing Community Imp. District (8.85%); Green Valley (5.35%); Greenwood (7.35%); Independence (7.6%); Kansas City (7.725%); Three Trails Community Improvement District 38000 (8.225%); Performing Arts Community Improvement District 38000 (8.725%); 39th Street Community Improvement District 38000 (8.225%); Westport Community Improvement District 38000 (8.225%); Martin City Community Improvement District 38000 (8.225%); Brookside Community Improvement District 38000 (8.225%); Lake Lotawana (5.35%); Lake Lotawana Community Improvement District 39980 (6.35%); Lake Tapawingo (5.35%); Laurel Heights (5.35%); Lee's Summit (7.725%); Levasy (6.35%); Lone Jack (7.35%); Oak Grove (7.85%); Raytown (7.35%); River Bend (6.35%); Sibley (5.35%); Sugar Creek (7.35%); Tarsney Lakes (5.35%); Unity Village (7.6%); and Westport (5.35%).
• Belton and Humansville each impose a 0.25% city fire protection district tax.
• Bethany (0.375%), Lawson (0.50%), Owensville (0.25%), Queen City (0.50%), and Steelville (0.50%) each impose a storm water/local parks tax at the indicated rate.
• Bridgeton, Bridgeton (X1), Bridgeton (X2), Bridgeton (T1), and Bridgeton (T2) each impose a 0.50% city miscellaneous tax.
• Butterfield and Morrisville each impose a 1% city sales tax.
• Cottleville imposes a 0.50% capital improvements tax. Marston imposes a 0.50% capital improvements tax and also imposes an additional 0.50% capital improvements tax.
• Diggins, Kingdom City, Norborne, and Pilot Grove each impose a 0.50% public mass transportation tax.
• Truesdale imposes a 0.50% capital improvements tax and expires a 0.50% city sales tax.
• Unity Village imposes a 1% city sales tax, a 0.50% capital improvements tax, a 0.50% public mass transportation tax, and a 0.25% storm water/local parks tax.

Nebraska: Local Tax Rate Changes Announced

• Effective January 1, 2007, the cities of Arnold, Dannebrog, Hyannis, and Sargent will begin imposing a local Nebraska sales and use tax of 1%, the city of Valentine will begin imposing a tax of 1.5%, and the city of Broken Bow will increase its tax from 1% to 1.5%.
• Effective October 1, 2006, the cities of Bennet, Dodge, Loomis, and Malcolm will begin imposing local taxes of 1%, the city of Ralston will begin imposing a tax of 1.5%, and the cities of Albion and Ord will increase their taxes from 1% to 1.5%.

Oklahoma: Change in Local Tax Ordinance Discussed

The Oklahoma attorney general determined that as a general rule, a city's governing body may amend a local Oklahoma sales tax ordinance to provide that funds collected may go to a service provider other than the entity that was designated in the ordinance approved by voters if (1) the rate and purpose of the tax remain unchanged, (2) the action of the local government is based on articulable standards and is not arbitrary, and (3) the ordinance does not specifically exclude other service providers without a vote of the people. However, the determination of whether a particular local sales tax ordinance excludes other service providers involves questions of fact that cannot be addressed in an attorney general opinion.Oklahoma Attorney General Opinion, No. 06-31, Oklahoma Attorney General, August 31, 2006.

Oklahoma: Local Rates Changed

The following Oklahoma local sales and use tax rate changes are effective January 1, 2007:

• Ardmore increases its sales and use tax rate from 3.25% to 3.75%.
• Canute increases its sales and use tax rate from 3% to 4%
• Covington increases its sales and use tax rate from 3% to 4%
• Eldorado imposes a use tax at a rate of 2%
• Carter County increases its sales and use tax rate from 0.25% to 0.5%
• McClain County imposes a sales and use tax at a rate of 0.5%
• Muskogee County imposes a use tax at a rate of 0.15%

Texas: Local Rate Changes Announced for Fourth Quarter 2006

Texas local sales and use tax rate changes have been adopted by various cities and special purpose districts, effective October 1, 2006.

New City Taxes: Additional city sales and use taxes for economic and industrial development, municipal street maintenance and repair, and/or property tax relief have been imposed by the following cities, resulting in the total rates shown:

• Anna (Collin County), 2% (8.25%)
• Bayou Vista (Galveston County), 1.75% (8%)
• Carmine (Fayette County), 1.5% (8.25%)
• Chillicothe (Hardeman County), 1.25% (8%)
• Elkhart (Anderson County), 1.25% (8%)
• Floydada (Floyd County), 1.75% (8%)
• La Porte (Harris County), 1.75% (8%)
• Munday (Knox County), 1.75% (8%)
• Oak Point (Denton County), 1.75% (8%)
• Primera (Cameron County), 2% (8.25%)
• Ransom Canyon (Lubbock County), 0.5% (7.25%)
• Roscoe (Nolan County), 2% (8.25%)
• Sonora (Sutton County), 1.75% (8%)
• Talty (Kaufman County), 1.75% (8%)
• Trophy Club (Denton County), 2% (8.25)
• Troy (Bell County), 1.5% (8.25%)
• Westlake (Denton County), 2% (8.25%); Westlake (Tarrant County), 2% (8.25%); Willis (Montgomery County), 2% (8.25%); and Winona (Smith County), 1.5% (8.25%)
  

Repealed City Taxes: Additional city sales and use taxes for municipal street maintenance and repair have been repealed by the following cites, resulting in the total rates shown:

• Anna (Collin County), 8.25%
• Bloomburg (Cass County), 7.25%
• Normangee (Leon County), 7.75%
• Normangee (Madison County), 7.75%

New SPD Taxes: The following special purpose districts (SPDs) have imposed a local sales and use tax:

• Baytown Crime Control and Prevention District (0.125%)
• Baytown Fire Control, Prevention, and Emergency Medical Services District (0.125%)
• Harris County Emergency Services District (1%)
• Jasper County Development District (0.5%)
• Montgomery County Emergency Services District (2%)

Repealed SPD Tax: A special purpose district (SPD) sales and use tax has been abolished in the Forest Hill Crime Control and Prevention District (formerly, 0.25%).

Utah: Midway Adopts Resort Community Tax

The municipality of Midway has adopted a 1% local Utah resort community sales tax, effective October 1, 2006.

All States: SST Board Adds Members; Acts on Purchaser Relief, Other Amendments

The Streamlined Sales Tax (SST) Governing Board added Rhode Island and Vermont as members and took action on several outstanding items, including relief from liability for purchasers, during a meeting in Bismarck, North Dakota. The SST Implementing States and the State and Local Advisory Council (SLAC) also met during the four day session that ran August 28-31, 2006.

Nebraska: Guide Updated to Include SST Information

A Nebraska Department of Revenue information guide concerning Nebraska and local sales tax is revised to clarify that out-of-state retailers who do not have nexus with Nebraska, and who are not required to obtain Nebraska sales tax permits, may voluntarily register through the Streamlined Sales and Use Tax Central Registration System. Information Guide 6-352-1994, Nebraska and Local Sales Tax, Nebraska Department of Revenue, September 2006.

California: Telecommunications References, Definitions Updated

For purposes of California telecommunications taxes, the Public Utilities Act is amended to provide definitions for "mobile data service," "mobile paging service," "mobile satellite telephone service," and" mobile telephony service." References to "commercial mobile radio service" are replaced with "mobile telephony service," and references to "wireless and cellular telephone corporations" are replaced with "providers of mobile telephony and mobile satellite telephone service."  Ch. 198 (A.B. 3073), Laws 2006, effective January 1, 2007.

Indiana: Hotel Phone Charges Subject to Local Lodging Tax

A hotel operator's charges to guests for telecommunications services were subject to Marion County, Indiana, innkeepers' tax because telecommunications services were essential to the furnishing of a hotel room. Since 1993, a Department of State Revenue regulation has interpreted the hotel tax as applying to gross receipts from rendering services that were essential to the furnishing of an accommodation. Hotel guests expected telephones with access to local and long distance service just as they expected a bed and sink. The taxpayer's assertion that the county innkeepers' tax was limited to charges for lodging and that the Department improperly expanded the imposition of the tax was rejected. Letter of Findings No. 09-20050182, Indiana Department of Revenue, August 2006.

Alabama: Evidence Showed That Restaurant Collected Tax

A restaurant was allowed to back out Alabama sales tax from its gross receipts from sales of meals, even though the restaurant's menu board did not indicate that sales tax would be added to prices and there were no tickets, sales receipts, or other records showing that the restaurant had charged and collected sales tax from its customers, because the presumption that sales tax was not charged could be rebutted by competent evidence that tax was included in the price and collected from customers. In this case, tickets given to customers were for lump-sum amounts greater than listed board prices. Further, waitresses carried cards showing the price of meal combinations with and without tax and the amount due if customers ordered drinks. However, the restaurant was not allowed to back out sales tax from its gross receipts from sales of drinks because there was no evidence that additional charges for drinks included sales tax.
Niki's Finley Avenue, Inc. v. Alabama Department of Revenue, Alabama Department of Revenue, Administrative Law Division, No. S. 05-270, August 10, 2006.

Indiana: Tire Re-Treading Equipment Not Exempt

A taxpayer who re-treaded tires for customers was ineligible for a manufacturing exemption from Indiana sales and use tax for rim repair and tire analyzing equipment, paint, shot blasting tools and supplies, and other items because the items were used for maintenance rather than directly in the direct production of tangible personal property.

The taxpayer's contention that its process on tire rims was so precise and extensive that it constituted processing rather than mere maintenance was rejected. The items at issue were not used in a process that produced entirely new marketable products, such as a process that reworked worn out, useless ball bearings into usable ball bearings. Rather, the taxpayer's work merely perpetuated the useful life of tire rims and therefore was a maintenance function. Letter of Findings No. 04-20040455, Indiana Department of Revenue, August 2006.

Florida: Installation Labor Provided to Governmental or Nonprofit Entity Taxable

A taxpayer was required to collect Florida sales or use tax on any materials, fabrication labor, or fabrication overhead on installation labor it provided as part of its contract with a governmental entity. Although the taxpayer did not install the roof structures under the same contract that it used to sell the roof structures, the taxpayer both installed and sold roof structures and, as such, the taxpayer was considered a "contractor.” The taxpayer was also required to pay Florida use tax on the sale of tangible personal property to an exempt entity. Although the taxpayer sold tangible personal property to the exempt entity, that sale was of an item that will become part of a real property improvement installed by the taxpayer. The taxpayer, therefore, must pay use tax on the fabricated cost of items of tangible personal property that will be incorporated into the project.  Technical Assistance Advisement, No. 06A-023, Florida Department of Revenue, August 4, 2006.

Massachusetts: Commercial Office Buildings Incorrectly Categorized, Overvalued

A taxpayer demonstrated that his real property assessments were excessive for purposes of Massachusetts property taxes because the assessor assigned an incorrect highest and best use for the property which inflated the value of the buildings for the two years in question. The assessor found the property's highest and best use to be medical offices despite the fact that only about 10% of the available space was leased as traditional medical office space. The assessor testified that medical office rents were ordinarily higher than non-medical office rents. The taxpayer was able to prove that the actual highest and best use was as a multi-tenanted commercial office building with some limited medical uses. Culbert v. The Board of Assessors of the Town of Brookline, Massachusetts Appellate Tax Board, Nos. F274830 and F278507, September 11, 2006.

Missouri: Ignorance of Local Use Taxes No Defense

An out-of-state taxpayer that sold furniture and flooring to Missouri customers was liable for unpaid local use taxes on its sales to Missouri customers. The taxpayer's unawareness of local use taxes validly imposed in counties and municipalities in which the taxpayer made sales was no defense to the imposition of those levies. The taxpayer did not dispute the validity of the taxes or that sales had been made to Missouri customers in localities that imposed such a tax, but instead argued that it was unaware of the local use taxes. Individuals, however, are presumed to know the law and ignorance of the law is no excuse for failure to abide by it. As such, the taxpayer was liable for its failure to collect and remit the local use taxes. T. Ormans Furniture & Flooring, LLC v. Director of Revenue, Missouri Administrative Hearing Commission, No. 04-1103 RS, August 8, 2006.

Ohio: Corporate Treasurer Liable for Unpaid Tax

A corporate treasurer was a responsible party liable for unpaid Ohio sales tax owed by the corporation. Although the corporation's stores were being operated by another person pursuant to a management contract with the corporation, the management contract did not alter the treasurer's liability. Under the management contract, the corporation retained all ownership rights to the stores. Consequently, the treasurer was still a responsible party liable for the unpaid tax.  Novak v. Tax Commissioner, Ohio Board of Tax Appeals, No. 2005-H-410, September 1, 2006.

Florida: Sales of Candy Through Vending Machines Sponsored by Nonprofit Are Exempt

Sales of food and drinks, including candy, sold for human consumption for 25 cents or less through coin-operated vending machines sponsored by a nonprofit corporation under IRC Sec. 501(c)(3) or (c)(4) are exempt from Florida sales and use tax. Technical Assistance Advisement, No. 06A-017, Florida Department of Revenue, July 18, 2006.

Illinois: Chicago Amusement Tax Ordinance Amended

The city of Chicago's amusement tax ordinance has been amended, effective September 1, 2006, to define a "reseller's agent" as a person who, for consideration, resells a ticket on behalf of a ticket's owner or assists the owner in reselling the ticket. The term includes an auctioneer, broker, or seller of tickets for amusements and applies whether the ticket is resold by bidding, consignment, or other means and whether the ticket is resold in person, at a site on the Internet, or otherwise.

New York: Airline's Purchase of Galley Carts Not Taxable; Pillows, Blankets, and Safety Cards Taxable

A commercial airline's purchases of galley carts and parts for galley carts for installation on its commercial aircraft are exempt from New York sales and use tax as machinery and equipment under Tax Law Sec. 1115(a)(21). However, pillows and blankets purchased for passenger comfort and laminated passenger seat-pocket safety instruction cards delivered in New York are subject to sales and use tax because such items are not considered to be equipment installed on the aircraft or property used for the maintenance or repair of the aircraft. TSB-A-06(22)S, New York Commissioner of Taxation and Finance, August 22, 2006.