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

Suspension of Certain Requirements Resulting from Hurricane Ian: On September 28, 2022, the Alabama Department of Revenue (Department) issued two Executive Orders temporarily suspending certain requirements because of the state of emergency resulting from Hurricane Ian. The first Order temporarily suspended the requirements associated with the International Registration Plan (IRP) and International Fuel Tax Agreement (IFTA) for any motor vehicle engaged in interstate disaster relief efforts which will be traveling through the State of Alabama as part of the disaster relief. The Department made it clear that nothing should be construed to allow a vehicle to operate in Alabama without valid registration and insurance from its base state, nor should it be construed to allow any vehicle to exceed weight limits posted for bridges and like structures, among other requirements. The second Executive Order temporarily suspended the licensing requirements associated with the Alabama Terminal Excise Tax for motor fuel exporters, importers, or transporters supporting disaster relief efforts by engaging in the export of motor fuel from Alabama to other states impacted by Hurricane Ian. The Department states in this Order that nothing shall be construed to permit any waiver of additional requirements under the Alabama Terminal Excise Tax, including the requirement for suppliers to collect and remit the destination state tax, among other requirements. Both Orders are effective until 30 days after signing. More information can be found here and here.

District of Columbia – Updates Reported

Veterans Homestead Deductions Start October 1, 2022: On September 30, 2022, the Office of Tax and Revenue (OTR) published an announcement that, effective October 1, 2022, residential real property owned by a veteran who has been classified by the United States Department of Veterans Affairs as having a total and permanent disability as a result of a service-incurred or service-aggravated condition or is paid at the 100 percent disability rating level as a result of unemployability, is eligible for reduction in assessed value of $445,000, provided that various conditions are satisfied. These conditions include:

• The property must be occupied by the disabled veteran and contain no more than five dwelling units (including the unit occupied by the owner);
• The property must be the principal residence of the disabled veteran;
• The disabled veteran must have at least 50 percent ownership of the property as shown by deed;
• The disabled veteran must be domiciled in the District; and
• Total household income cannot exceed the limit Senior/Disabled Tax Relief limit, which is $139,900 for tax year 2022.

Information regarding the application processes is also set forth in this announcement. More information can be found here.

Florida – Updates Reported

Hurricane Ian Resulted in Suspension of Second Installment Payment for Estimated Taxes: Among the multitude of emergency measures issued by the State of Florida in regard to Hurricane Ian, the Florida Department of Revenue (Department) issued Emergency Order No. 22-001 on September 27, 2022. That Emergency Order suspended various time requirements for certain local governmental agencies with respect to millage hearings, budgets and many other deadlines. Additionally, the Order suspended the September 30, 2022, due date for the second installment payment for those taxpayers who have elected to pay the applicable taxes by the installment method. The Department states in this Order that the tax collector is authorized to accept the September 30 installment payment and allow the taxpayer a discount applicable to the installment payment through and including October 14, 2022. More information can be found here.

Georgia – Updates Reported

Temporary Waiver of IRP/IFT Requirements Due to Hurricane Ian: On September 30, 2022, the Georgia Department of Revenue (Department) issued Policy Bulletin MVD-2022-01which stated that due to Hurricane Ian, the Department and its Motor Vehicle Division were waiving certain motor carrier and related requirements. According to that Bulletin, temporary waivers are in effect through 5:00 p.m. October 28, 2022, for motor carriers and individual truck drivers to comply with the requirements associated with the Georgia International Registration Plan and the International Fuel Tax Agreement trip and fuel permits. The Department noted that the Georgia requirements associated with the IRP and the IFTA trip and fuel permits are waived for vehicles providing direct assistance with relief efforts relating to Hurricane Ian. The Department further stated that the waiver shall not be construed to allow any vehicle to operate in Georgia without a valid vehicle registration and insurance as required by the base state, and that carriers are required to maintain compliance with all driver, owner, vehicle and carrier compliance requirements that may fall outside this waiver or with any other rule, statute or requirement. Further, the waiver does not apply to motor carriers or drivers that are currently subject to state and federal out-of-service orders. The waiver automatically terminates at 5:00 p.m. on October 28, 2022, unless renewed by the Department. More information can be found here.

Louisiana – Updates Reported

Tax Implications of Federal Student Loan Forgiveness Program: On September 14, 2022, the Louisiana Department of Revenue (Department) issued Revenue Information Bulletin 22-017 dealing with the Louisiana tax implications of the federal student loan forgiveness program. In this Bulletin, the Department noted that on August 24, 2022, President Biden announced a plan that in part provides up to $20,000 in student loan forgiveness to Pell Grant recipients on loans held by the U.S. Department of Education and up to $10,000 in student loan forgiveness to non-Pell Grant recipients. The Department noted in this Bulletin that, for federal purposes, taxpayers who have either a federal filing status of single and earn less than $125,000 or a federal filing status of married filing jointly and earn less than $250,000, are eligible for the forgiveness. After reviewing background information regarding the Student Loan Tax Relief Act, the Department stated in this Bulletin that, for Louisiana tax purposes, the starting point for determining Louisiana's tax table income is the taxpayer's adjusted gross income, which is defined as the adjusted gross income of the individual for the taxable year that is reportable on the individual's federal income tax return. The Department went on to state that because Louisiana largely conforms to federal tax law for purposes of individual income tax, amounts that are exempt from federal tax, and therefore not includable in the taxpayer's adjusted gross income, will automatically be exempt from Louisiana tax without further action. The Department also indicated that for taxpayers qualifying for federal student loan forgiveness pursuant to the President's plan, any amount so forgiven will likely be automatically excluded from a taxpayer's adjusted gross income and exempt from Louisiana tax. More information can be found here.

Maryland – Updates Reported

Shop Maryland and Save for the Holidays: On October 3, 2022, the Comptroller of Maryland (Comptroller) launched the annual "Shop Maryland and Save for the Holidays" campaign. The Comptroller noted that small businesses have begun to recover from the pandemic but now are facing inflationary costs and an array of other challenges that make it especially important to support local retailers. Further, he indicated this is a great opportunity for consumers to save during challenging financial times and a much needed boost for mom-and-pop businesses that are the backbone of Maryland's economy. The Comptroller went on to provide other insights into the campaign and benefits of shopping in Maryland. More information can be found here.

Mississippi – Updates Reported

Third Party to Operate New Alcoholic Beverage Control Warehouse: On September 15, 2022, the Mississippi Department of Revenue (Department) issued an announcement that Senate Bill 2844, effective July 1, 2022, authorizes the Department to contract with a third-party operator for its Liquor Distribution Center in Gluckstadt, Mississippi. The Department stated in this announcement that procurement laws require it to first obtain approval from the Public Procurement Review Board before issuing a Request for Proposals (RFP). It further stated that it is seeking permission from the Board to issue an RFP for the operator and, after the RFP is issued, it will schedule a pre-bid conference with all interested potential operators. Proposals will be due from potential operators at the end of November, and the selection of the operator should occur in December. The Department stated that it will provide an update on the RFP process following the Board's October meeting. More information can be found here.

North Carolina – Updates Reported

Phase 2 Business Grants Issued: On October 3, 2022, the North Carolina Department of Revenue (Department) recently mailed checks to more than 3,900 North Carolina businesses awarded under Phase 2 of the Business Recovery Grant Program. According to the announcement, this Program provides payments to eligible North Carolina businesses that suffered significant economic loss during the COVID-19 pandemic. (See our April 25, 2022, newsletter.) The announcement referenced that Phase 2 of the program greatly expanded eligibility for businesses including gyms and fitness centers, as well as professionals such as barbers and cosmetologists, with the application period ending on June 1, 2022. The grant amount is a percentage of the economic loss demonstrated by the eligible businesses, and applicants that were not approved will be notified by mail. More information can be found here.

South Carolina – Updates Reported

Draft Revenue Ruling as to the Sale of Boats, Motors and Airplanes: On September 28, 2022, the South Carolina Department of Revenue (Department) issued draft Revenue Ruling #22-X addressing recent 2022 legislation regarding the application of the casual excise tax on sales of airplanes, boats, and boat motors when the sales and use tax has not previously been paid. In that regard, the draft Ruling references Code Section 12-36-2110(A), which concerns the sale of items subject to the maximum sales and use tax and maximum casual excise tax, as having been amended to add watercraft motors (that is, boat motors). According to this draft Ruling, sales of watercraft motors, effective July 1, 2022, are subject to the sales and use tax or the casual excise tax at a rate of five percent, with a limit of $500. Further, the draft Ruling states that, with this legislative amendment, sales of watercraft motors are exempt from all local sales and use taxes administered and collected by the Department effective July 1, 2022. The draft Ruling also updated various Q&As regarding the sale of boats, boat motors, and airplanes. Public comments as to this draft Ruling are due by October 14, 2022. More information can be found here.

One-Time Individual Income Tax Refund (Rebate) in 2022: On October 5, 2022, the Department issued Information Letter #22-18 addressing the one-time rebate as approved by the South Carolina General Assembly as part of the Comprehensive Tax Cut Act of 2022. According to this Information Letter, the one-time rebate is for each 2021 individual income tax return that reports South Carolina individual income tax liability. The rebate is equal to the amount of tax liability on the return, with a maximum rebate of $700. However, the Department may determine that there may be sufficient funds to increase the maximum rebate. The Department must issue the rebates by December 31, 2022. The Information Letter also reviewed North Carolina law relating to the rebate, as well as addressing various rebate information. For instance, South Carolina residents, part-year residents, and nonresidents who meet the following requirements qualify for the rebate: (i) the taxpayer filed a 2021 South Carolina individual income tax return on or before October 17, 2022, and (ii) the 2021 individual income tax return reported a South Carolina income tax liability after refundable and nonrefundable credits are applied. The Information Letter also discussed various other matters relating to the rebate. More information can be found here.

Tennessee – Updates Reported

Professional Privilege Tax Revised: In September 2022, the Tennessee Department of Revenue (Department) issued Important Notice #22-13 addressing the professional privilege tax. In that Notice, the Department referenced a new Tennessee law enacted during the 2022 Legislative Session which exempts physicians and osteopathic physicians licensed or registered under Title 63 (Professions Of The Healing Arts), Tennessee Code Annotated, as being exempted from the professional privilege tax effective June 1, 2023. The Department further referenced that, beginning June 1, 2023, the only professions that are subject to the privilege tax would be lobbyists; agents, broker/dealers, and investment advisors registered under Title 48 of the Tennessee Code; and attorneys. More information can be found here.

Texas – Updates Reported

Updated Information Regarding Property Taxes in Disaster Areas and During Droughts: On September 23, 2023, the Texas Comptroller's Office posted updated information regarding property tax assistance that may be available in disaster areas and during droughts. The Comptroller noted that Texas law allows a qualified property that is at least 15 percent damaged by a disaster in a governor-declared disaster area to receive temporary exemption of a portion of the appraised value of the property; however, the property owner must apply for the temporary exemption no later than 105 days after the governor declares a disaster area. The Comptroller noted that qualified property includes tangible personal property used for income production; improvements to real property; and certain manufactured homes. The Comptroller then set forth various information that will help determine whether property tax assistance is available in various circumstances, such as the potential for waiver of certain penalties and the availability of installment payment arrangements. With respect to small businesses, this information notes that an installment payment arrangement may be available for real and personal property damaged in a disaster or emergency that is owned or leased by a business entity that has gross receipts under a specified threshold which is adjusted annually by the Comptroller's Office. That threshold for the 2022 year is $6,707,468. More information can be found here.