High Net Worth Family Tax Report, Vol. 6, No. 2

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In This Issue:

Table of Contents:

California Enacts Legislation Requiring Out-of-State Retailers to Collect Use Tax; SEC Finalizes Rules Exempting Family Offices from Requirement to Register as Investment Adviser; Court Finds Defined Value Formula Clause Effective to Limit Gift Tax; The Six-Year Statute of Limitations: The Issue That Will Not Go Away; Phase in of Foreign Account Tax Compliance Act (FATCA) Requirements; Estate Prevails in Dispute Over Valuation of Interest in a Closely Held Business; Individual Achieves Business Bad Debt Deduction; Co-op Shareholder Cannot Deduct Amount of Assessment to Repair Damage; Loans from Corporations to Shareholders Must be Carefully Documented

California Enacts Legislation Requiring Out-of-State Retailers to Collect Use Tax

On June 28, 2011, Governor Brown signed ABx1 28, which will require certain out-of-state retailers to collect and remit California’s use tax. California imposes a use tax on purchases made outside of California for the purpose of using the item in California. The use tax is intended to back up the sales tax and stop people from purchasing items outside of California in order to avoid California’s high sales tax. The tax is imposed on the purchaser but the state has a lot of trouble collecting it because many people do not properly report their out-of-state purchases and pay the use tax that they owe on those purchases. The revenue loss for states has become very significant with the explosion of massive internet retailers such as Amazon. A lot of goods that consumers used to purchase in California subject to sales tax are now being ordered from companies like Amazon with no sales or use tax being paid.

Please see full report below for more information.

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Published In: General Business Updates, Finance & Banking Updates, Securities Updates, Tax Updates, Wills, Trusts, & Estate Planning Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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