Every year in December, RubinBrown is proud to host our Year-End Tax & Accounting Updates in Denver, Kansas City, and St. Louis.
Last December, a number of state and local tax issues for Missouri, Colorado, and Kansas were provided to our record number of attendees in all three cities. Sidebar2 Below you will find relevant updates on items originally discussed during December's update.
Please mark your calendars for the dates of this year's events. RubinBrown advisors will be providing in-depth updates on the below, as well as many new topics that will affect you and your businesses.
Originally, the Missouri Department of Revenue interpreted a deduction from income for new jobs created in Missouri as not applicable to S Corps or partnerships because these entities didn’t pay “income taxes.” At the same time, Schedule C filers and C Corps were allowed the deduction under the MO DOR’s interpretation.
The good news is that Missouri passed a law to correct this inequity. Today, S Corps and partnerships are now allowed to pass through this deduction to their shareholders and partners, respectively. Missouri Governor Jay Nixon signed this law into effect in July.
To view this new law, please click here.
In 2010, Colorado passed a law imposing notification and reporting requirements on out-of-state retailers making Colorado sales. The focus of this law was those doing business from outside of the state of Colorado or by use of the Internet. The law forced these businesses (unless they charged the sales or use taxes) to put a conspicuous notice on their invoices to their customers.
Moreover, the law required annual reporting of this information to Colorado and imposed substantial penalties for failure to provide the notice on invoices or not report to Colorado those who they didn’t charge sales or use taxes. Not long after the law was passed, the Direct Marketing Association of America, on behalf of impacted businesses, sued Colorado in federal court.
Recently, the federal court placed a permanent injunction on Colorado’s enforcement of this onerous law, citing the commerce clause and the need for a physical presence in Colorado of businesses before they could impose these notice and reporting requirements on out of state businesses. Colorado has appealed this decision to the federal appeals court.
To view the Direct Marketing Association decision, please click here.
Governor Sam Brownback recently signed a law which substantially reduced the Kansas individual income tax rate and eliminated much of these taxes on non-wage business income.
The new Kansas income tax rate for 2013 will top out at 4.9%, a drop from the current top rate of 6.45% In addition, this new law contains a new deduction. This deduction exempts from taxation all non-wage business income of S Corps, partnerships and Schedule C filers. Under Kansas Department of Revenue Notice 12-08, the new law disallows Net Operating Losses from being carried forward into tax years 2013 and forward for fiduciary and individual taxpayers.
To view the new law, please click here.
To view the Kansas Department of Revenue notice, please click here.
Under U.S. Treasury Department guidelines, we hereby inform you that any tax advice contained in this communication is not intended or written to be used, and cannot be used by you for the purpose of avoiding penalties that may be imposed on you by the Internal Revenue Service, or for the purpose of promoting, marketing or recommending to another party any transaction or matter addressed within this tax advice. Further, RubinBrown LLP imposes no limitation on any recipient of this tax advice on the disclosure of the tax treatment or tax strategies or tax structuring described herein.
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