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November 12,  2008

Federal Headlines

Free Trade Pact Should Not Be Linked to Economic Package, Perino and Podesta Claim

 

President Bush wants Congress to pass the Columbia Free Trade Agreement on its own merit, without linking it to legislation that would provide aid to automakers or stimulate the economy, according to a White House spokeswoman. Bush and President-elect Barack Obama, at a White House meeting on November 10, discussed a wide range of issues, both domestic and international, including the economy, White House Press Secretary Dana Perino confirmed.

 

Perino disputed newspaper reports that the president is willing to support a stimulus package or automobile-maker rescue plan if Congress passes the Columbia free trade pact. "They did spend some time talking about the economy, but in no way did President Bush suggest that there was a quid pro quo when it came to the Colombia free trade agreement or the other free trade agreements," Perino stressed at a press briefing.

 

Obama-Biden Transition Team Co-Chair John Podesta agreed that the free trade pact should pass or fail on its own merit and should not be linked with any other legislation. Podesta, at a presidential transition briefing on November 11, released new ethics guidelines for federal lobbyists in the Obama transition. The ethics rules prohibit federal lobbyists from making financial contributions to the transition or engage in any lobbying while they are working for the transition.

 

By Paula Cruickshank, CCH News Staff

 

State Headlines

Minnesota --Multiple Taxes: Governor Unveils Green Jobs Investment Initiative

 

Minnesota Governor Tim Pawlenty has released details of his new green jobs investment initiative for the 2009 legislative session that proposes to create a number of new corporate franchise, personal income, and sales and use tax credits, incentives, and exemptions. The Governor's proposed initiative contains a "Green JOBZ" program that would grant the same tax incentives contained in the state's current JOBZ program to qualifying green job projects. Businesses that support Minnesota's 25 x '25 renewable energy standard by improving energy efficiency and conservation, and by reducing emissions, pollution and greenhouse gases would be eligible to qualify for the Green JOBZ program.

 

The Governor's proposal also includes

 

-- a new job growth investment credit that targets green job projects designed to promote the state's renewable energy goals,

 

-- a new small business investment that will center on green job projects, and

 

-- incentives intended to expand the production and infrastructure for biomethane, solar and other renewable energy projects.

 

Subscribers to CCH Tax Research NetWork can view the full text of the Governor's release.

Press Release, Minnesota Governor Tim Pawlenty, November 11, 2008

 

Missouri --Sales and Use Tax: Renewals of Software License Agreements Taxable

 

Renewals of software license agreements for canned software are subject to Missouri sales or use tax if the original canned software is delivered in a tangible format and the agreement provides that updates are available in either a tangible format or an electronic format. The taxpayer is selling computer software in a tangible format, which is tangible personal property subject to sales or use tax when purchased. Renewal license fees are taxable if the original purchase of the canned program was a taxable event. Therefore, renewal fees are subject to tax whether the updates are available only in a tangible format or only in an electronic format.

Letter Ruling No. LR5143, Missouri Department of Revenue, September 26, 2008,

¶203-003

 

Other References:

 

Explanations at ¶60-310

Utah --Sales and Use Tax: Taxability of Implantable Birth Control Devices Revisited

 

The Utah State Tax Commission has issued a private letter ruling advising a medical clinic that sales and use tax does not apply to its purchases of implantable prescription birth control devices marketed under the names Implanon, Mirena, and Paragard.

 

Utah law exempts from sales and use tax drugs intended for human use when sold to hospitals or medical facilities or sold pursuant to a prescription. A "drug" is a compound, substance, or preparation, or a component of a compound, substance, or preparation, that is intended to affect a bodily function. The devices at issue in the ruling require intrauterine or subdermal implantation and they release either copper ions or hormones into the body.

 

The Commission found that because the devices have little or no clinical value other than to deliver drugs, the sale of the devices is essentially a sale of drugs that is exempt. A 2007 private letter ruling issued by the Commission held that the sale of surgically implanted permanent birth control devices is subject to sales tax. In the current ruling, however, the Commission noted the devices at issue in the earlier ruling did not release any drugs into the body. (See TAXDAY, 2007/12/05, S.18)

 

Subscribers to CCH Tax Research NetWork can view the letter ruling.

 

 

 

Private Letter Ruling, Opinion No. 08-001, Utah State Tax Commission, June 10, 2008

 
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