Sales Tax Policy Changes

On January 1, 2025 Alaska eliminated the 200 separate transaction threshold for remote sellers, leaving only the dollar-based threshold of $100,000. This means that small sellers may deregister if they are below the dollar based threshold of $100,000 as of January1, 2025. In general states say that you must stay registered for 12 months after your nexus ends. This is called trailing nexus. When a state elminates thresholds some make you follow the trailing nexus guidlines while others (like Alaska) let you deregister immediately!

Pursuant to Am. Sub. H.B. 33 of the 135th Ohio General Assembly, the Commercial Activity Tax (CAT) underwent major changes beginning January 1, 2024.  For tax periods beginning on and after January 1, 2024, the CAT annual minimum tax is eliminated, and the exclusion amount is increased from $1 million to $3 million.  For calendar year 2025 and thereafter, the exclusion amount is increased to $6 million. 

Sales and use tax on leases and rentals begins Jan 1, 2025 in Illinois. This is a big change, as IL and Maine were the only two states not to tax rentals prior to this. Illinois issued guidance on the sales and use tax that applies to tangible personal property leased from retailers or service providers, which includes information on what and who is subject to the tax, registration requirements, sourcing rules and reporting requirements. Read more about this at: https://tax.illinois.gov/research/publications/bulletins/fy-2025-15.html

Massachusetts is launching a tax amnesty program on Nov 1, 2024. They have added FAQs to their webpage which you can view here. This program will run for 60 days ending on Dec 30, 2024.  Eligible taxpayers can request a waiver of penalties on outstanding taxes and interest paid during the amnesty period.

• If you have an eligible existing tax liability, you will receive an Amnesty Eligibility Letter. All you will need to submit for your Amnesty Request is your personal information, the Letter ID, and a valid payment method (e.g., bank account information, credit card).

• If you are filing a new return to report a tax due, you will need to complete your return to calculate your amount due. Once completed, you can complete your Amnesty Request using the information from the return. Don’t forget to either e-file or mail your completed return after you submit your Amnesty Request.

• If you are filing an amended return to report an increase in tax, you will need to complete your amended return to calculate your amount due. Once completed, you will need to sign on to your MassTaxConnect account to complete your Amnesty Request using the information from the amended return. Don’t have an account? No problem, it only takes a few minutes to register for MassTaxConnect. Don’t forget to either e-file or mail your amended return after you submit your Amnesty Request.

In general, a VDA is better than an amnesty due to its limited look back period. However, this amnesty has one as well making it a great option for those eligible. If you have any questions or would like assistance with this program and have receive an eligibility letter, please contact us at contact@salestaxandmore.com 

North Carolina recently repealed their transaction threshold effective July 1, 2024. Session Law 2024-28 was sent to the Governor’s desk on June 28, 2024. On July 1, he signed it and it immediately became effective.

There is no trailing nexus and now the remote seller threshold only includes a monetary threshold of 100k. Read more: https://www.ncdor.gov/sd-24-1-repeal-transaction-thresholdpdf/open

CO’s retail delivery fee will increase on July 1, 2024. The Department of Revenue makes an adjustment for inflation each year the rate of inflation is positive. The adjustment is the lesser of the actual rate of inflation or 5%. The retail delivery fee rate increases from $0.28 to $0.29 effective July 1, 2024.

For more information: https://tax.colorado.gov/retail-delivery-fee

On January 1 2024 Indiana elminated their 200 transaction threshold for remote sellers. However, they are still enforcing the 200 transactions for periods prior to 1/1/2024, so if you were over the 200 transactions in 2023 and were registered but not over the $100,000 threshold you can not deregister until 1/1/2025. To read more: https://www.in.gov/dor/business-tax/remote-seller-information/

We told you that we would let you know about any updates to the retail delivery in MN as we heard them. We are in receipt of some draft language. Here is what we believe based on language put out by the DOR. The actual language may change, but we believe the thought process will remain the same. Effective July 1, 2024, The Minnesota DOR will define "gross receipts" as the total amount received in money, by barter, or by exchange. It will exclude items that are not taxable that are listed separately on an invoice.

Rhode Island has made a major change to its annual sales tax reconciliation filing requirements for the tax year 2023 and beyond. Sales Tax permit holders are no longer required to submit the annual Sales and Use Tax Reconciliation Return (Form T-204R-Annual). Instead, a new form called Form RI-STR has been introduced, aligning Rhode Island's tax form with neighboring states and allowing taxpayers to reconcile sales periodically throughout the year.

The following is directly from the Alaska Municipal Sales Tax Program Quarterly News. “All digital goods and services delivered into ARSSTC jurisdictions should be assessed sales tax (following tax-exempt rules for entities). Digital goods and services include the categories listed below.”