Thomson Reuters revealed a sampling of 2011 quirky indirect tax law changes, emphasizing the importance of technology and expertise to help navigate the dynamic sales and use tax landscape.
“While some of the changes may seem odd, it highlights just how difficult the sales and use tax process can be,” said Carla Yrjanson, vice president of Tax Research and Content for Thomson Reuters. “Government continues to heavily rely on indirect taxes to address budget shortfalls, which in turn make it difficult for businesses to cost effectively achieve compliance with confidence.”
Thomson Reuters Indirect Tax provides a trusted tax platform used by leading global companies, service from a multidisciplinary team of tax experts and SAS 70 certified processes. Companies who have deployed indirect tax solutions from Thomson Reuters benefit from significant investment in the technology, security, and tax content, coupled with industry proven best practices, all of which enable them to seamlessly comply with tax changes immediately.
A few of the 2011 “quirky” indirect tax highlights include:
- While food for domestic home consumption under the federal food stamps program and Women, Infants, and Children program (7 U.S.C. § 2012(g)) is tax free, liquor-filled candy no longer qualifies as food. The short and sweet version of the letter is that if you buy rum balls in Colorado they will be subject to tax.
- Residents in Pennsylvania can breathe a little easier after an April ruling by the Commonwealth Court of Pennsylvania. In Air-Serv Group, LLC v. Commonwealth, No. 459 F.R. 2008 (2011), the Court concluded that air from the atmosphere is not subject to Pennsylvania sales tax.
- Maine offers a sales tax refund and exemption certificate for the purchases of parts and supplies for the maintenance, repair and supplies of windjammers used to carry passengers or cargo (LD 59, PL 2011, c. 425).
- Retroactive to January 1, 2004, Maine also passed LD 1325, PL 2011, c. 285 that states that the sale of watercraft is exempt when sold to non-resident purchasers and the craft remains in the state for less than 30 days. If the craft is in the state for 30 days or more, sales tax is due.
- In the state of Vermont, proceeds from an auction are exempt only if the auctioneer performs the auction on the premise of the property owner. If the auction takes place elsewhere, or if any other property is commingled with that of the owner, then the proceeds from the auction are subject to sales tax (Vt. Stat. Ann. 32 s 9741(48).
- In the United Kingdom, chocolate biscuits are subject to value added tax (VAT), but not chocolate covered cakes.
- In Germany, the cost to own a horse just got a little cheaper. The law was intended to cover horses for slaughter, however, an oversight has given German equestrian lovers a reduced tax on their companion or show horses as well.
- In Australia, pizza bread continues to escape the goods and services tax (GST).
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