State and local taxes impact almost every taxpayer, and developments in any one jurisdiction can be frequent and sometimes confusing. In this newsletter edition, we will briefly summarize certain SALT developments in several states which may be important to you.
Alabama – Updates Reported
Motor Vehicle Registration Deadlines Extended Due to COVID-19: The Alabama Department of Revenue (Department) published a notification on January 12, 2022 that relief was being provided to those who cannot register their vehicles or renew registrations because of license issuing office closures resulting from the spread of COVID-19. The Department stated registrants in counties where the county license issuing office closure during normal business results in the registrants having no access to make transactions, the deadlines to renew 2022 motor vehicle registrations on vehicles are extended to the last business day of the subsequent month that registrations are otherwise due. Further, the Department stated this extension applies to vehicle owners in all counties where the county courthouse or other license plate issuing offices and tax collection offices are closed for the entire month the registrations are originally due. More information can be found here.
District of Columbia – Updates Reported
COVID-19 Tests Exempt from Sales/Use Tax: The Office of Tax and Revenue (OTR) recently published Tax Notice 2022-02 stating at-home COVID-19 tests are exempt from the OTR's sales and use tax, and retail businesses should no longer add a sales tax to at-home COVID-19 tests purchases. More information can be found here.
Florida – Updates Reported
Internship Tax Credit For Corporate Income/Franchise Tax: The Florida Department of Revenue (Department) recently issued Tax Information Publication No.: 22C01-01 addressing the benefits and requirement of the Florida Internship Tax Credit Program (Program). As noted by the Department in this Publication, the Program allows a credit for up to five student interns for taxable year per corporation, during the 2022 and 2023 calendar years, with a credit amount of $2,000 per student intern (maximum of $10,000 for each taxable year). To be eligible for the Program, a corporation must be a "qualified" business, which means, according to the Publication, a corporation currently in existence and has been continuously operating for at least three years employing at least one qualified student intern in the 2022 or 2023 taxable years (at least 30 hours per week) for at least nine consecutive weeks. Additionally, and as noted in the Publication, the corporation must (i) show that 20 percent or more of its full-time employees were previously employed by the business as student interns, or (ii) have employed ten or fewer full-time employees on average for three immediately preceding taxable years and have previously hired at least one student intern. As further noted in the Publication, a qualified student intern is a person who has completed at least 60 credit hours at a state university or a Florida College System institution; is enrolled in a career center operated by a Florida school district or a charter technical career center; or is enrolled as a graduate student at a state university in Florida. The student intern must also satisfy other conditions as set forth in the Publication. The Department states in the Publication that verification and approval of tax credits will be made on a first-come, first-served basis, with a total of $2.5 million in credits available for each of the two years in the Program. More information can be found here.
Georgia – Updates Reported
Interest Rate Annual Adjustment Notice: The Georgia Department of Revenue (Department) recently issued Policy Bulletin ADMIN-2022-01, dated effective January 1, 2022, advising for the calendar year 2022, the annual interest rate will be 6.25 percent, accruing monthly. The Policy Bulletin states Georgia law requires refunds and past due taxes that accrue interest will do so at a rate equal to the bank prime loan rate as posted by the Board of Governors of the Federal Reserve System, plus three percent. The Department noted in the Bulletin that the interest rate of 6.25 percent was also applicable in the calendar year 2021. More information can be found here.
Louisiana – Updates Reported
Louisiana Individual Income Tax Reform Effective Beginning 2022: The Louisiana Department of Revenue (Department) recently issued Revenue Information Bulletin No. 21-032 regarding the individual tax reform effective for 2022 and future tax years. In this Bulletin, the Department noted Louisiana voters approved Constitutional Amendment Number 2 (CA2) which amended the Louisiana Constitution, resulting in income tax statutory changes effective in 2022. The purpose of this Bulletin, according to the Department, is to explain these changes to the individual income tax and to encourage taxpayers to review their withholding and estimated tax payments beginning with the 2022 tax year. The Department clearly states in the Notice there is no impact with respect to the 2021 tax returns which are due May 16, 2022. However, with respect to the 2022 tax year and thereafter, the Department states in the Bulletin that CA2 contains two major changes, one specific to the individual income tax and one applicable to all Louisiana income taxes: (i) maximum income tax rate for individuals is set at 4.75%; and (ii) federal income taxes paid may be deductible as provided by Louisiana legislation. The Department then describes in the Bulletin how the changes made by CA2, together with statutory changes, impact the computation of the individual income tax – such as the income tax rate reduction, the limitation on excess federal itemized personal deductions, and the repeal of the federal income tax deduction. Further, the Department in the Bulletin discusses revisions to the withholding tax tables and formulas, and provides guidance to individuals regarding their Louisiana tax obligations beginning in 2022. More information can be found here.
Maryland – Updates Reported
COVID-19 Extended Deadline for Certain Individual Income Tax Filings and Payments: The Comptroller of Maryland (Comptroller) recently issued a Tax Alert declaring a new state of emergency relating to the ongoing COVID-19 pandemic; and, as a result of the continued hardship and economic impact on individuals caused by that pandemic, the Comptroller has extended the due date for certain Maryland individual income tax returns and accompanying final payments. Pursuant to this Tax Alert, the extension is for individual income tax filings and final payments due with those returns for the tax year 2021; and such tax year 2021 returns otherwise due between January 24, 2022 and April 18, 2022 are now due on or before July 15, 2022. According to the Tax Alert, this extension applies both to resident and nonresident individuals with a tax year 2021 Maryland filing requirement. Additionally, the Tax Alert states the due date for individual returns from farmers and fisherman, originally due March 1, 2022, are also extended to July 15, 2022. The Comptroller also states in the Tax Alert there is reasonable cause to wave interest and penalties for late payment if the income tax due with respect to personal income tax returns for the tax year 2021 that otherwise would have been due between January 24, 2022 and April 18, 2022, inclusive, is paid by July 15, 2022. This extension according to the Tax Alert is automatic, and no filing or request is required to take advantage of the extended deadline. Additionally, the deadline to request an extension to file the 2021 individual income taxes has, according to the Tax Alert, been extended to July 15, 2021; and, upon approval of an extension request, the Comptroller will allow an individual taxpayer to file returns by October 17, 2022 – but extension payments due with the 2021 extension request are due by July 15, 2022. This extension of time to file a return and make payment of tax only applies to certain individual taxpayers; and the due dates for corporate, pass through entity, fiduciary income tax returns and payments are not affected. More information can be found here.
Mississippi – Updates Reported
Income Tax Return Due Date Extension: The Mississippi Department of Revenue (Department) recently issued Notice 80-21-005 stating Mississippi will follow the extended federal due date of February 15, 2022, extended from January 3, 2022, to file income tax returns for victims of Hurricane Ida. The Department states in the Notice this updated relief covers the entire State of Mississippi and applies to any individual income tax returns, corporate income and franchise tax returns, partnership tax returns, S corporation tax returns and quarterly estimated payments originally due between August 28, 2021 and February 15, 2022. Further, the Department states in the Notice taxpayers who had a valid extension to file their 2020 tax returns on October 15, 2021, will now have until February 15, 2022 to file their returns. However, the Department further states in the Notice the federal extension does not apply to the payments for these returns because the tax payments were due on the original due date. Further, this extension does not apply, according to the Notice, to other tax types or payments on prior liabilities. The Notice provides contact information for any taxpayer who receives a penalty notice. More information can be found here.
North Carolina – Updates Reported
Motor Fuels and Alternative Fuels Tax Rate For 2022: The North Carolina Department of Revenue (Department) recently issued a Memorandum stating the motor fuels and alternative fuels tax rate for the period of January 1, 2022 through December 31, 2022, will be 38.5 cents per gallon or gallon equivalent. The previous rate for 2021 was 36.1 cents per gallon. The Department also states in this Memorandum the inspection tax will remain at .0025 cents per gallon. More information can be found here.
South Carolina – Updates Reported
Sales/Use Tax Agriculture Exemption Card: The South Carolina Department of Revenue (Department) issued Farm Card Exemption Notice ST-8F, revised January 25, 2022, stating the Agricultural Exemption Certificate is being replaced with a new Agriculture Tax Exemption (SCATE) card issued by the South Carolina Department of Agriculture (SCDA). In this Notice, the Department states SCDA began accepting applications and issuing SCATE cards in February 2022, replacing the Department's Agricultural Exemption Certificate (ST-8F) which will no longer be available or accepted beginning April 1, 2022. This Notice also addresses who will be affected, what information affected parties need to know, what affected parties need to do, and where questions can be submitted in regard to the new SCATE card. More information can be found here.
Tennessee – Updates Reported
Sales Tax Exemption for Industrial Machinery: On February 1, 2022, the Tennessee Department of Revenue (Department) posted Revenue Ruling #21-12 to the Department's website, such Ruling addressing the question of whether the industrial machinery exemption applies to a quarry where raw materials are being mined. The facts in this Ruling involve a taxpayer that conducts mining operations at one location, with the mined raw materials being transferred from that location to a separate location where the materials are processed and manufactured into finished products sold to third parties. The Department had issued an industrial machinery exemption to the taxpayer for the second location but not the first location at which the mining operations were conducted. The industrial machinery exemption, as noted in the Ruling, applies to machinery that is necessary to and primarily for the fabrication or processing of tangible personal property for resale and consumption off the premises, and also includes mining machinery, apparatus equipment and materials, with all associated parts and accessories necessary to and primarily for specified mining activities. Based on the foregoing, the Department concluded the first location, as a mining operation, can qualify for the industrial machinery exemption with respect to equipment, machinery and materials necessary to and primarily for the mining/extracting of raw materials if that location is registered for sales and use taxes. If the location is not so registered, it must first become registered because a taxpayer, as noted by the Department, with multiple locations in Tennessee must separately register each location even if the multiple locations are part of the same manufacturing process. The Department then stated a registration certificate is not transferrable and cannot be used at a location different from the location for which the certificate was issued; and, likewise, each location must separately apply for industrial machinery exemption because such authority is granted or denied on a location-by-location basis. More information can be found here.
Texas – Updates Reported
2022 Due Dates for Taxes, Fees and Information Reports: The Comptroller's Office has recently published a chart showing the due date for numerous taxes, fees and information reports during the 2022 calendar year. This updated information also addresses the timing for making payments using a paper check, electronic data interchange, TEXNET, and electronic check and credit card payments. More information can be found here.
