Crouse Company PC

Tax Alerts

Tax Briefing(s)

Middle Class Tax Relief and Job Creation Act of 2012

2011 Tax Year In Review

2011 reporting for 2010 conversions to Roth accounts explained
Taxpayers who convert a traditional IRA to a Roth IRA must include the amount transferred in their gross income and pay tax accordingly. For the 2010 tax year, the IRS created spec...

Auto/ truck maximum values updated for 2012 cents-per-mile/fleet-average valuation
Taxpayers whose employers provide company cars (or trucks and vans) for their personal use must factor that usage into their gross income. Personal use of a vehicle provided by an employer is consi...

IRS audits of higher income taxpayers increase
The IRS audited one in eight individuals with incomes over $1 million in fiscal year (FY) 2011. While the overall audit coverage rate for individuals remained steady at just over one percent, the a...

IRS eliminates tort test for exclusion of personal injury/sickness damages
Recent IRS regulations provide that damages received from a lawsuit or settlement as compensation for personal physical injuries or sickness may be excluded from gross income, even...

Tax gap grows to $450 billion; compliance rate holds steady
The "gross tax gap," or the amount of tax owed to the U.S. government that is not paid on time, climbed from $345 billion in Tax Year (TY) 2001 to $450 billion in TY 2006, the IRS has reported. (Be...

AL - Diesel fuel sold to charter fishing boats exempt
An Alabama administrative law judge (ALJ) held that sales of diesel fuel by two marinas to charter fishing boat operators were exempt from Alabama sales tax pursuant to Code of Ala...

AK - Native corporation’s properties qualified for charitable exemption
The Alaska Supreme Court ruled that four properties of a Native corporation qualified for the property tax charitable exemption because they were used exclusively for charitable pu...

AZ - Procedures specified for requesting extensions to file withholding returns
The Arizona Department of Revenue has released information on the current procedures for requesting extensions for filing annual withholding tax returns. Previously, the department...

AR - Standard mileage rate revised for second half of 2011
The Arkansas optional standard mileage rate used by individuals in computing personal income tax business deductions is 51 cents per mile for expenses paid or incurred during Janua...

CA - Independent contractor withholding webinar announced
The California Franchise Tax Board (FTB) is holding a free webinar on December 20, 2011, at 10 a.m. PST, for those who must withhold personal income tax on California source income...

CO - Time adjustment required when using comparative sales data
The Colorado appellate court reversed an order by a county board of assessment appeals that reduced the property tax assessment of vacant land because statutory assessment provisio...

CT - DRS addresses worker misclassification problem
The Connecticut Department of Revenue Services (DRS) has issued a notice encouraging employers that have misclassified their workers (e.g., as independent contractors rath...

DE - Governor proposes credit for hiring veterans
Delaware Gov. Jack Markell proposed to expand tax credits to Delaware businesses that hire veterans in his 2012 State of the State address. The governor made no additional tax prop...

DC - All retirement account distributions taxed at highest rate
Emergency legislation enacted by the District of Columbia amends the income withholding tax rules for retirement distributions. A distribution from a retirement account will be tax...

FL - Floating interest rate remains at 7% for first half of 2012
The floating interest rate on Florida underpayments (deficiencies), late payments, and overpayments for the period from January 1, 2012, through June 30, 2012, remains at 7% for, a...

GA - Corporation not devoted entirely to charitable pursuits denied exemption
An exempt nonprofit corporation that built and rented apartments to low-income persons did not qualify for a local Georgia charitable property tax exemption because the corporation...

HI - 2011 electronic filing handbook released
The Hawaii Department of Taxation has released its Handbook for Electronic Filers of Hawaii Individual Income Tax Returns for tax year 2011. The handbook is designed as a companion...

ID - Forestland tax redesignations may be made in 2012
Since the current 10-year Idaho forestland (property) tax designation period will expire at the end of 2012, during the coming year a forest landowner may change from the productiv...

IL - Credit not applicable to deferred property tax payments
The property tax credit against Illinois personal income tax does not apply to taxpayers who participate in the state’s senior citizens real estate tax deferral program. Unde...

IN - Extension guidance updated
The Indiana Department of Revenue has released an updated personal income tax information bulletin that outlines the procedures for obtaining an extension of time to file. Specific...

IA - Military pay exclusion rules and other provisions amended
The Iowa Department of Revenue has adopted a number of rules and rule amendments relating to personal income. The amendments reflect legislative changes made by the Iowa General As...

KS - Taxability of multistate direct mail transactions examined
An opinion letter issued by the Kansas Department of Revenue examines the sales and use tax implications of a Missouri-based direct mail advertising company soliciting Kansas custo...

KY - Interest rates set for 2012
The Kentucky Department of Revenue has announced the tax interest rates for 2012. For unpaid taxes, the interest rate will increase to 6% (currently, 5%). For interest due on a ref...

LA - Ballot measure to prohibit new tax or fee on immovable property approved
Louisiana voters passed a state constitutional amendment (Amendment 1) to prohibit the state or any political subdivision from levying a new tax or fee upon the sale or transfer of...

ME - 2012 withholding tables released
Maine Revenue Services has released the 2012 personal income tax withholding tables. In addition, a supplement to the withholding tables is available containing 2012 percentage met...

MD - Emergency status provided for green energy regulations
The Maryland Joint Committee on Administrative, Executive and Legislative Review (AELR) has granted emergency status for the corporate and personal income tax regulations pertainin...

MA - Conference bridging service taxable
Conference bridging service sold to Massachusetts customers by an out-of-state taxpayer is subject to Massachusetts sales and use tax because it falls within the broad definition o...

MI - Filing requirement for federally disregarded entities extended further
The Michigan Department of Treasury has revised a notice stating that while disregarded entities for federal tax purposes are required to file Michigan business tax (MBT) returns, ...

MN - Tax evasion involving recreational vehicles investigated
The Minnesota Department of Revenue is investigating cases involving the evasion of motor vehicle sales taxes required to be paid on recreational vehicles. The tax evasion cases in...

MS - Redemption period not extended due to bankruptcy
A Mississippi property tax sale was upheld because the prior owner of the property received adequate notice of the suit to quiet title and bankruptcy laws did not extend the redemp...

MO - Taxability of textbooks included in tuition discussed
A taxpayer's sales of required textbooks included as part of its tuition price are not subject to Missouri sales tax. The taxpayer is an accredited, postsecondary institution offer...

NE - Department reminds taxpayers of form due dates, e-filing
The Nebraska Department of Revenue is reminding taxpayers that copies of 2011 state income tax Forms W-2, W-2G, 1099-MISC, and 1099-R and the Nebraska reconciliation Form W-3N are ...

NV - Net proceeds of minerals tax regulations adopted
The Nevada Tax Commission has adopted regulations that revise the deductions used to determine the new proceeds of minerals tax. Effective January 1, 2012, the several deductions h...

NH - Home care association entitled to charitable exemption
On remand from the New Hampshire Supreme Court, the Board of Tax and Land Appeals (BTLA) considered two underlying issues as directed by the court and ruled that a home care ...

NJ - Madoff victims entitled to refunds
Taxpayers, who were victims of the Madoff Ponzi scheme, were entitled to file amended New Jersey gross (personal) income tax returns for 2005 through 2007 to claim refunds for inte...

NM - Residency established for pilot
A hearing officer with the New Mexico Taxation and Revenue Department (TRD) ruled that a taxpayer did not intend to abandon New Mexico as his home state and that he was a New Mexic...

NY - Application for award of administrative costs denied
A taxpayer was not entitled to an award of administrative costs under Tax Law §3030 with regard to a New York sales and use tax settlement, even though the taxpayer established tha...

NC - Guidelines issued on DOR’s authority to adjust net income or require filing of combined return
The North Carolina Department of Revenue has released a corporation income tax directive that addresses the Department’s authority to require corporate taxpayers to eliminate...

ND - Housing incentive fund contribution credit amount increased
The North Dakota corporate or personal income tax credit for contributions to the housing incentive fund is increased to 100% (previously, 20%) of the contribution. In addition, th...

OH - InvestOhio program registration period begins
The Ohio Department of Development reminds taxpayers that registration for the InvestOhio program, which provides for a personal income tax credit for eligible investors, begins No...

OK - Attorney General addresses economic development plans involving tax revenue-based compensation
The Oklahoma Attorney General has issued an opinion on whether a city that cannot legally require the annexation of a commercial property can contract with a commercial property ow...

OR - No good cause for representative’s failure to appear
Regarding a taxpayer’s Oregon personal income tax appeal, good cause did not exist for the failure by her representative to either attend a case management conference or expl...

PA - DOR updates bulletin on restricted credits
The Pennsylvania Department of Revenue (DOR) has issued a corporate income tax bulletin addressing the application of restricted credits and requirements for selling tax credits. S...

RI - Regulation on direct mail, filing requirements, and purchaser liability adopted
The Rhode Island Division of Taxation has adopted a regulation to conform with certain Streamlined Sales and Use Tax Agreement (SST) provisions regarding direct mail, relief from l...

SC - Notification requirement for agents and brokers of certain rental property explained
The South Carolina Department of Revenue has issued a sales and use tax notice to remind real estate agents, brokers, and listing services that it is their responsibility to notify...

SD - Appeal process guide for board of equalization members issued
The South Dakota Department of Revenue has issued a revised guide regarding the property tax appeal process for members of local, county, and consolidated boards of equalization. A...

TN - Poultry environmental control equipment exempt
Doors, diffusers, and inlets installed in a poultry building are exempt from Tennessee sales and use tax as part of a system for poultry environmental control when sold to a qualif...

TX - Showroom was key to proving taxpayer was a retailer
A taxpayer was eligible for the 0.5% rate when calculating its taxable margin for Texas franchise purposes because, using an SIC Code Manual analysis, 100% of its revenue was deriv...

UT - Allocation and apportionment rule amended
A Utah rule relating to the allocation and apportionment of net income for corporate income tax purposes has been amended to reflect legislative changes made by S.B. 136, Laws 2008...

VT - Health care reform financing listening sessions scheduled
The Vermont Agency of Administration is hosting four listening sessions across Vermont to help inform the design of future health care reform financing plans. The sessions will inc...

VA - Domestic production deduction properly allocated
A taxpayer that filed a federal consolidated corporate income tax return and a separate return for Virginia corporate income tax purposes properly claimed the IRC §199 deduction on...

WA - Taxability of insurers explained
The Washington Department of Revenue has updated an industry guide on the application of sales and use tax to the insurance industry. Insurers and affiliates are responsible for pa...

WV - Guidance on contractor entitlement to pass-through exemptions reissued
The West Virginia State Tax Department has reissued, with technical corrections, recent guidance on a contractor's right to assert consumers’ sales and service tax exemptions...

WI - Subtraction for child and dependent care expenses discussed
The Wisconsin Department of Revenue has issued a personal income tax notice discussing the child and dependent care expenses subtraction, which will be claimed on the 2011 Form 1 o...

WY - 2012 interest rate set
The 2012 annual interest rate on delinquent Wyoming sales and use and certain other excise tax accounts has been set at 7.25%, and the equivalent daily interest rate will be 0.0199...

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