Tax
California Sales Tax: Discussion on Tax Treatment of Goods and Shipping and Handling Fees
Addressing questions in sales tax handling for small wholesalers in California, this article analyzes the current practice of taxing the difference between UPS charges and customer charges, explores whether handling costs should be included in the difference, and whether the state views such differences as an additional source of revenue.
Analysis of Social Security and Medicare Tax Obligations for U.S. Citizens Employed Abroad by Non-U.S. Employers
U.S. citizens working abroad for non-U.S. employers are generally still required to pay U.S. Social Security and Medicare taxes (FICA taxes) on wage income, unless specific international agreements or exceptions apply. Using Kazakhstan as an example, this article analyzes the relevant tax obligations and considerations.
State Income Tax Treatment of Professional Services Provided Across State Lines: A Practical Guide for Treasurers and CFOs
Employees in the consulting industry often provide services to clients across multiple states throughout the year, creating complex issues with state income tax withholding and individual filing. This article outlines common practices at large firms: withholding taxes based on the employee's state of residence, with employees required to file separately in states where services exceed a specific time threshold (e.g., two weeks). Additionally, the article raises the potential impact of cross-state tax rate differences on employee compensation for financial decision-makers' reference.
Discussion on Methods for Tracking Use Tax Liabilities in Accounts Payable
When enterprises occasionally purchase goods or services from out-of-state or out-of-city suppliers, and the suppliers are not registered for local taxes and do not collect sales tax, the enterprise must self-assess and remit use tax. Based on real-world scenarios, this article outlines common practices such as accruing use tax during accounts payable entry, manual calculation at month-end, or querying supplier lists, and invites readers to share better solutions.
Analysis of the Statutory Statute of Limitations for Sales Tax Filing Errors
The statutory statute of limitations for sales tax filing errors varies by state, with most states typically looking back four years, but if an audit reveals significant discrepancies, the lookback period may extend to the date sales began in that state. This article is compiled from expert responses in a recent webinar.
Should Expense Reimbursements Be Included in 1099-MISC Reporting? Authoritative Answers and Practical Guidance
Whether reimbursed expenses should be included in 1099-MISC reporting is often questioned in practice. Based on available information, this article analyzes key rule points and notes that judgments should be made in light of specific circumstances and authoritative guidance.
Applicability of California Sales Tax in February 2016: Are Enterprise Software Sales and Support and Maintenance Agreements Subject to Tax?
This article addresses the California sales tax issue in February 2016, analyzing whether four business activities—enterprise software sales, support and maintenance agreements, remote installation, and customization services—are exempt from sales tax. Based on the typical operational model of California independent software vendors, and considering key factors such as electronic delivery and retention of intellectual property rights, it explores the applicability under current tax law.
Seeking U.S. Sales Tax Compliance Consultation: Tax Guidance for a Canadian Trade Show Company's Expansion
Brenda, a Canadian trade show business owner, plans to expand her business to the United States but is unsure in which states she needs to collect sales tax. She seeks professional advisors to help ensure compliance. This article outlines her needs and highlights the complexities of sales tax.
Corporate Compliance Risks of Unpaid Use Tax: Is CPA Advice Reliable?
A company's financial staff discovered that the company had not paid use tax on purchases where sales tax was not directly collected. After consulting an accounting firm, the CPA advised not to worry, as sales tax had already been paid on R&D-related portions with receipts retained, which could be leveraged during audits. Based on New York State tax regulations, this article evaluates the reasonableness of this advice, points out that it may mislead the company, and recommends formally filing for exemptions or paying the back taxes.
Washington State Sales Tax: Do Businesses Without Physical Presence Need to Register and File?
An Arizona company consulted an external CPA about Washington State sales tax obligations and was told it must register and file sales tax even without physical presence. The business doubts this and seeks confirmation.