The Texas Comptroller of Public Accounts (the “Comptroller”) will initiate the Texas Tax Amnesty Program (the “Program”) this week. The Program will run from May 1, 2018 to June 29, 2018 and covers all state and local taxes and fees administered by the Comptroller, including Texas franchise tax and sales/use taxes. The Program applies to all tax reports originally due before January 1, 2018, and is designed to allow participants to “wipe the slate clean” by filing all past due reports or by amending reports that underreported taxes. Program participants benefit from a 100% waiver of both penalties and interest. This is the first Texas amnesty program since 2012, when an earlier amnesty program ran from June 12, 2012 through August 17, 2012.
Just over a month ago, the U.S. Supreme Court surprised many in the state tax community when it announced that it granted certiorari in South Dakota v. Wayfair, Inc., Docket No. 17-494; appealed from 901 N.W.2d 754 (S.D. 2017). Granting cert. in Wayfair means that the U.S. Supreme Court may be willing to overturn precedent that, for over fifty years, has provided and continues to provide a bright-line physical presence nexus standard applicable to states’ ability to impose sales and use taxes. See National Bellas Hess Inc. v. Illinois, 386 U.S. 753 (1967), affirmed in part by Quill Corp. v. North Dakota, 504 U.S. 298 (1992). The U.S. retail economy and its transition from brick-and-mortar storefronts to e-commerce retailers have thus been shaped by the expectation that physical presence within a taxing state is required before that state may impose sales or use taxes on a retailer.
On September 22, 2017, the Massachusetts Department of Revenue (the “Department”) officially promulgated a remote vendor sales tax nexus regulation, 830 CMRH.1.7: Vendors Making Internet Sales (the “Regulation”). The Regulation sets forth the following bright-line nexus threshold:
An Internet vendor with a principal place of business located outside the state that is not otherwise subject to tax is required to register, collect and remit Massachusetts sales or use tax with respect to its Massachusetts sales […] if during the preceding 12 months […] it had in excess of […]” (1) “$500,000 in Massachusetts sales from transactions completed over the Internet […]”; and (2) “made sales resulting in a delivery into Massachusetts in 100 or more transactions.
The Delaware Secretary of State recently finalized its estimation regulations without any substantive change to Delaware’s proposed estimation practices. The final version of these regulations, which became effective July 11, 2017, acknowledges that the state received numerous public comments criticizing the proposed regulations, including the state’s practice of extrapolating unclaimed property liability to Delaware based on all unclaimed property reported in the base period, including property that was escheatable to other states. However, as anticipated, the Secretary of State “decided to not make [any] suggested changes”. The Secretary of State’s finalized estimation regulations can be viewed here: Abandoned or Unclaimed Property Voluntary Disclosure Agreement Program.