DRS: 2013 Legislative Changes affecting DRS

2013 MAJOR TAX LAW CHANGES

{Picture of State Capitol Building}

 

The following is a quick summary of major 2013 legislative changes.[1]

 

TAX AMNESTY
  • Deficient & delinquent taxpayers as well as non-filers (except motor carrier road taxes) may apply from September 16-November 15, 2013 for amnesty in order to avoid increased penalties.

SALES & USE TAX

  • Sales tax collection pilot.  For taxable periods beginning October 1, 2013 & prior to April 1, 2014, taxpayers with established deficiencies will be required to provide for electronic remittance on all credit and debit card sales by the end of the second business day after each sale utilizing state approved processors.  DRS will evaluate the pilot program as well as other options for improving collections and report legislatively in 2014.
  • Non-renewal of tax permits & increased penalties .  Effective July 1, 2013, tax permits no longer renewed until outstanding tax liabilities are resolved.  (This also applies to cigarette & tobacco products licenses.)  Penalty for operating without a sales tax permit increases to $250 for first day and $100 for each day after.
  • Cigarette sales.  For sales after July 1, 2013, tax to be collected & remitted by wholesalers (other than net tax on mark-up by retailers).
  • Boats.   Effective July 1, 2013, (1) 7% luxury rate eliminated, (2) exempted if docked 60 days or less in any year, and (3) exclusion for dry dock storage extended to  October 1-May 31st.
  • Clothing & footwear.  Tax exemption restored for items less than $50 sold on and after June 1, 2015.
 

OTHER MAJOR TAX CHANGES

  • Earned income tax credit.  Reduced from 30% of federal EITC to 25% for 2013 income year and 27.5% for 2014 income year.
  • Corporation income tax.  Existing 20% surcharge continues until income year 2015.
  • Tobacco products.   Cigarette and other tobacco company national settlement funds allocated to increase enforcement tax evasion in distribution and sales.
  • Motion picture tax credits.   Moratorium on credits for new projects in fiscal years 2014 and 2015.  Existing credit caps on maximum insurance premium extended for income years 2013 and 2014.
  • Electric generators.  Existing tax continues through September 30, 2013.
  • Interest on refunds.  Refunds for overpayment of estate, gift, petroleum products gross receipts and certain public service company taxes made uniform to 91st day after filing due, filing made or amended return filed.
  • Petroleum products.  Previously enacted rate increases to 8.1% for petroleum gross receipts and 54.9 cents per gallon for diesel fuel effective for sales on and after July 1, 2013.  Effective July 1, 2013, sales of cosmetic grade mineral oil exempt.  For quarterly periods on and after July 1, 2015, credit for tax paid on products under NAICS code group 3255 exported.
  • Tax incidence analysis.  DRS funded to develop and provide tax impact analytics.

[1] Please note that this report is for information purposes only and should not be relied on as tax guidance.



Content Last Modified on 7/8/2013 2:21:44 PM