In case you missed it: Last week in Allyn Tax News

Did you know that more than 600 sales tax rate changes took place on April 1 in these states…

Alaska, Alabama, Arkansas, Arizona, California, Kansas, Louisiana, Minnesota, Missouri, Nebraska, Ohio, Oklahoma, Texas, Utah, Washington and Wyoming combined over 600 sales tax rate changes. These changes came into effect on April 1, 2022.

Maryland: purchases made from exempt organizations

The Maryland Court of Appeals determined that a for-profit organization was not entitled to a refund of the sales and use taxes it paid for purchases of cleaning products the company used to to provide services to its not-for-profit hospital clients. The court determined that the for-profit corporation was not a reseller of the exempt organization, nor was it acting as an agent for the hospital.

Arkansas: janitorial services deemed taxable

A sales tax audit resulted in a sustained assessment against the taxpayer declaring the taxability of the cleaning and janitorial work. Generally, services rendered are not taxable for sales tax purposes in various states. However, Arkansas law states that cleaning services (services to get rid of dirt, filth, or foreign matter) are taxable under the definition of janitorial services. Additionally, AK law does not allow a deduction for supply costs associated with janitorial services, as the taxpayer attempted to claim.

Maryland to waive sales and use tax on diabetic care products

Effective July 1, 2022, Maryland will stop collecting sales tax on a litany of products needed for diabetes care. Some of the items are already exempt from sales tax as medical equipment, but HB 1151 will explicitly state an exemption for these and other items used for the treatment and care of diabetes. While the bill is expected to reduce state revenue by about $2.2 million in 2023, state Rep. Alonzo T. Washington said the bill is a positive step to make diabetes care affordable for Marylanders.

Arkansas 2022 sales tax holiday

A sales tax holiday has been declared for Arkansas and will begin at 12:01 a.m. on Saturday, August 6, 2022 and end at 11:59 p.m. on Sunday, August 7, 2022. During this sales tax holiday, state and local authorities will not be charged on the sale of clothing or footwear with a retail price of less than $100, clothing accessories and equipment with a retail price of less than $50, school items or supplies , art supplies and school teaching materials. This holiday requires mandatory attendance of retailers selling qualifying merchandise and retailers are prohibited from collecting sales tax on these items.

The Arkansas Department of Finance and Administration has released a guide for retailers regarding the holidays. For more information on the Holiday Tour:

https://www.dfa.arkansas.gov/images/uploads/exciseTaxOffice/Sales_Tax_Holiday_Instructions_2022.pdf

What’s for dinner?

Complexity of Sales for Resale Determining whether a sale is for resale can be a complicated matter, as a leading restaurant recently discovered. The restaurant claimed that its purchases of dishes, utensils and glasses were not subject to sales tax since they were “resold” to its customers with the price included in the term “meal”. However, ownership is never exchanged between the restaurant and the customer. The small dishes remain the property of the restaurant since they are cleaned and reused when the customer leaves. The restaurant’s claim was properly denied.

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