VA: Corp President not held liable for unpaid sales

The 20% owner of a tire shop who performed the duties of shop foreman was relieved of personal liability for unpaid sales taxes because he proved that, despite his standing as the President of the corp, he did not meet the VA definition of a corp officer. He did not have enough ownership/authority to control business affairs. He had no actual knowledge that the taxes were not being paid. The duty of reporting and remitting sales taxes fell to others. These factors were taken into consideration and the VA commissioner ruled in his favor. Each state will look at different criteria and apply varying weights to items of evidence but this case provides some insight on who responsible parties might be in cases of unpaid sales taxes.

State Tax Reciprocal Agreements example

From January 2010. These may not always stay the same so please confirm before depending on the info! (DE has no reciprocal agreements of this nature.)

State States with State Tax Reciprocal Agreements Exemption Form


District of Columbia All non-residents who work in DC can claim exemption from withholding for the DC income tax. D-4A

Illinois Iowa, Kentucky, Michigan, Wisconsin IL-W-5-NR

Indiana Kentucky, Michigan, Ohio, Pennsylvania, Wisconsin WH-47

Iowa Illinois 44-016

Kentucky Illinois, Indiana, Michigan, Ohio, West Virginia, Wisconsin, Virginia 42A809

Maryland District of Columbia, Pennsylvania, Virginia, West Virginia MW 507

Michigan Illinois, Indiana, Kentucky, Minnesota, Ohio, Wisconsin - Employers may create their own exemption form or use the line on MI-W4 for claiming exemption from withholding. Employee should write "Reciprocal Agreement" and the state name on that line. MI-W4

Minnesota Michigan, North Dakota MWR

Montana North Dakota NR-2

New Jersey Pennsylvania NJ-165

North Dakota Minnesota, Montana NDW-R

Ohio Indiana, Kentucky, Michigan, Pennsylvania, West Virginia IT-4NR

Pennsylvania Indiana, Maryland, New Jersey, Ohio, Virginia, West Virginia REV-420

Virginia Kentucky, Maryland, District of Columbia, Pennsylvania, West Virginia VA-4

West Virginia Kentucky, Maryland, Ohio, Pennsylvania, Virginia WV/IT-104

Wisconsin Illinois, Indiana, Kentucky, Michigan W-220

Virginia: No deduction for taxes paid to MD in error

If you live in one state but work in another, your employer will generally withhold and remit taxes to the state where you are working - not where you are living. However, you will owe tax to your state of residence on all the income you earn, regardless of where you earned the income. Your home state will probably give you a credit for taxes paid to other states so you will only wind up paying tax to one state. For example, if you are a resident of DE working in MD:

• if you paid $150 to MD but DE would have charged you $100 on that income you will receive a $100 credit.

• if you paid MD $80 but DE would have charged you $100 on that income you will receive an $80 credit.

Some states will not give you the credit at all so you do wind up double paying. Some adjacent states have adopted reciprocity agreements. In these cases, your employer may withhold and remit only the tax for your home state. VA ruled that since reciprocity with MD is available if it is not taken advantage of (i.e. a VA resident working in MD still withholds and remits MD tax) VA will not offer a credit for the taxes paid in error. Hopefully the taxpayer in this case was able to obtain a full refund from MD!

Maryland renews and expands Enterprise Zones

Enterprise Zone Tax Credits

Real property tax credits – Ten-year credit against local real property taxes on a portion of real property improvements. Credit is 80% the first five years, and decreases 10% annually to 30 percent in the tenth and final year.

• Income tax credits – the one-time $1,000 credit per new worker. For economically disadvantaged employees, the credit is $6,000 per employee over three years.

 

Focus Area Tax Credits

Businesses in Baltimore City or Prince George’s County enterprise zones may be eligible for the following tax credits:

• Real property tax credits – Ten-year, 80% credit against local real property taxes on a portion of real property improvements. (does not decline as it does with the standard benefit).
• Personal property tax credits – Ten-year, 80% credit against local personal property taxes on new investment in personal property within a focus area.
• Income tax credits – a one-time $1,500 credit per new employee. For economically disadvantaged employees, the credit is $9,000 per employee over three years.

Here are some links to additional info:

http://www.choosemaryland.org/businessresources/Documents/Enterprise%20Zones/enterprisezones061512.pdf

http://www.choosemaryland.org/businessresources/Documents/Writeable%20Forms/EZQAProperty2011.pdf

http://www.choosemaryland.org/businessresources/Documents/Writeable%20Forms/EZQAIncome2010.pdf

 

NJ Nexus news - part 7

The Director of NJ Division of Taxation may, when necessary, regard a salesperson, representative, independent contractor, solicitor, trucker, peddler or canvasser operating in New Jersey as an agent of the dealer, distributor, supervisor, employer or person under whom the agent operates or from whom the agent obtains the tangible personal property sold by the agent, regardless of whether the agent is making sales on the agent’s behalf or on behalf of such dealer, distributor, supervisor, employer, or person, and that the director may so regard the agent and may regard the dealer, distributor, supervisor, employer, or person as a seller for purposes of the sales and use tax.

NJ Nexus news - part 6

NJ nexus news: Persons who is engaged in the business of selling tangible personal property, directly or through a subsidiary or other related entity, to purchasers in New Jersey by mail, telephone, the Internet or any other media, and who has a contractual relationship with an entity to provide and perform delivery, installation, assembly, or maintenance services for that person’s purchasers within New Jersey will be deemed sellers for purposes of being required to register to do business in New Jersey and collect/remit sales tax.

NJ Nexus News - Part 5

Persons who are engaged in the business of selling tangible personal property, specified digital products, or services, the use of which is subject to tax in New Jersey, and who use a trademark, service mark, or trade name that is the same as the trademark, service mark, or trade name used by an affiliated person in New Jersey will be deemed sellers for purposes of being required to register to do business in New Jersey and collect/remit sales tax.