State and local taxes impact almost every taxpayer, and developments in any one jurisdiction can be frequent and sometimes confusing. ln this newsletter edition, we will briefly summarize selected state and local tax (SALT) developments in several states which may be important to you.

Alabama – Updates Reported

Guidance Regarding Exempt Overtime Pay: On August 4, 2023, the Alabama Department of Revenue (Department) issued a press release regarding guidance published by the Department for reporting overtime pay that will be exempt from income tax for the upcoming tax year. Frequently asked questions and other relevant information were also included with that guidance. The press release noted that for the tax year beginning on or after January 1, 2024, overtime pay received by a full-time hourly wage paid employee for hours worked above 40 in any given week is excluded from gross income and therefore exempt from Alabama state income tax. The release also noted that tied with this exemption are employer reporting requirements to the Department, including a requirement to report the total aggregate amount of overtime pay and the total number of employees who received overtime pay. That exemption, Act No. 2023-421, was passed by the 2023 Alabama Legislature on June 6, 2023, and signed by the Governor on June 8, 2023. More information can be found here.

District of Columbia – Updates Reported

Real Property Tax Sale: The Office of Tax and Revenue (OTR) has recently published a Notice that all real properties, described in that Notice, for which real property taxes or vault rents (including penalties and interest, if applicable) were levied and in arrears on October 1, 2022, for which Business Improvement District taxes (including penalties and interests, if applicable) were levied and in arrears before September 1, 2022, or for which any other tax certified by the OTR for collection hereunder remains unpaid, shall be sold at public auction to the highest bidder at the 2023 Real Property Tax Sale. That Sale began July 18, 2023, and continues (except Saturdays, Sundays, and legal holidays) until all the real properties available for sale are sold. More information regarding the foregoing Notice and the list of properties can be found here.

Florida – Updates Reported

Adoption of 2023 Internal Revenue Code: On July 28, 2023, the Florida Department of Revenue (Department) published Tax Information Publication No: 23C01-04, entitled "Adoption of 2023 Internal Revenue Code." As noted in the Publication, the Florida Legislature must consider each year the adoption of the current Internal Revenue Code to ensure certain tax definitions and the calculation of adjusted federal income will be consistent between the Internal Revenue Code and the Florida Income Tax Code. The Publication noted that the Florida corporate income tax "piggybacks" federal income tax determinations and uses adjusted federal income as the starting point for computing Florida's net income. The Publication then noted that as a result of a 2023 law enacted in Florida, the Florida Income Tax Code was amended so as to adopt the federal Code retroactively to January 1, 2023, meaning that Florida will continue to follow the computation of federal taxable income. However, Publication also noted that the Florida Income Tax Code requires modifications in certain areas to the federal taxable income, including in areas such as bonus depreciation, depreciation for qualified improvement property placed in service on or after January 1, 2018, business meal expenses, and film, television and live theatrical production expenses. The Publication then reviews specific information regarding the allowance and application of certain tax credits. More information can be found here.

Georgia – Updates Reported

Exemption for Qualifying Zoological Institutions: The Georgia Department of Revenue (Department) recently published Policy Bulletin SUT-2023-03 addressing the sales and use tax exemption for qualifying zoological institutions. As noted in the Bulletin, from July 1, 2023, until December 31, 2026, or until the aggregate state and local sales and use tax refunded exceeds $800,000, whichever occurs first, the sales or use of tangible personal property used for or in the renovation or expansion of zoological institutions is exempt from state and local sales and use tax subject to various qualifications. The Bulletin then reviews a number of such qualifications for the exemption, such as, what constitutes a qualifying zoological institution, what the qualifying items are, the effective dates of the exemption, and the refund administration procedures. More information can be found here.

Louisiana – Updates Reported

Reinstated Second Amendment Sales Tax Holiday: On July 26, 2023, the Louisiana Department of Revenue (Department) issued Revenue Information Bulletin No. 23-018 addressing the reinstated Second Amendment Weekend Holiday for sales and use tax purposes. As noted in the Bulletin, this sales tax holiday begins on September 1, 2023, and ends at midnight on September 3, 2023. This holiday provides a sales and use tax exemption on any consumer purchase of firearms, ammunition, and hunting supplies occurring during that exemption period. The Bulletin then addresses the types of purchases eligible for the exemption, the purchases that are not eligible for exemption, as well as conditions and special provisions relating to the exemption. More information can be found here.

Maryland – Updates Reported

Executive Organization Chart: On August 9, 2023, the Comptroller of Maryland (Comptroller) published an executive organization chart for the Comptroller's Office. This chart provides insights into the leadership structure within the Comptroller's Office, including information regarding the lines of management for the Chief of Staff, the Chief of Deputy Comptroller for Revenue Operations, and other information regarding leadership teams within the Comptroller's Office. More information regarding these and other enactments can be found here.

Mississippi – Updates Reported

Second Amendment Weekend Sales Tax Holiday: On August 1, 2023, the Mississippi Department of Revenue (Department) issued an Official Guide to the Second Amendment Sales Tax Holiday which takes place between August 25, 2023, and midnight on August 27, 2023. According to the Official Guide, sales tax is not due during that holiday period on the sale of firearms, ammunition, and certain hunting supplies as defined in the Guide. Additionally, the Guide sets forth eligible and non-eligible items for the sales tax holiday, as well as sets forth guidelines regarding terms and conditions under which the sales tax holiday applies. More information can be found here.

North Carolina – Updates Reported

Interest Rate Through December 31, 2023: The North Carolina Department of Revenue (Department) issued a notice that the interest rate to be in effect during the six-month period beginning July 1, 2023, through December 31, 2023, will continue to be seven percent. The Department in this notice stated that such a rate applies to refunds and assessments but does not apply to the International Fuel Tax Agreement. Tax rates for prior periods are also set forth in this notice. More information can be found here.

South Carolina – Updates Reported

Advisory Opinion Index: On June 30, 2023, the South Carolina Department of Revenue (Department) issued Information Letter #23-9 which includes an index of South Carolina Advisory Opinions issued by the Department through June 30, 2023. The Advisory Opinions are indexed under the major categories of administrative; alcoholic beverage licensing & regulations; income taxes; miscellaneous taxes; property taxes; and sales and use taxes. More information can be found here.

Tennessee – Updates Reported

Three Months of Grocery Sales Tax Savings: On July 31, 2023, Tennessee Governor Lee invited Tennessee families to save during the State's three-month grocery tax suspension, starting August 1, 2023, through October 31, 2023. According to the Governor, the State has cut taxes "because families should keep more of their own hard-earned dollars." As a prelude to the Governor's statement, the Tennessee Department of Revenue (Department) previously issued Noticed #23-09 addressing the sales tax holiday for food and food ingredients during the period from August 1, 2023, through October 31, 2023, and addressing in such Notice the definition of food and food ingredients together with reporting requirements for dealers during the tax holiday period. More information can be found here and here.

Texas – Updates Reported

Legislative Update: The Comptroller's Office has recently announced that readers should be on the lookout for the August 2023 edition of Tax Policy News, which will include a special legislative update resulting from the 88th Legislative Session which is now ended. The August edition of such publication was not released by the Comptroller's Office at the time of this newsletter, but when released can be found here.