KYJ tax 뉴스레터에 나와있듯이 (http://www.kyjcpa.com/newsupdates/supreme_court_overturns_quill/), Wayfair에서,  미국 대법원이 타주에 있는 판매자 (remote sellers)가 판매가 이루어지는 주의 sales tax를 걷어야하는가의 유무에 대해 물리적 실재 (physical presence)기준을 사용하는 것을 무효화하였다. Wayfair 의 판례에 따라, 많은 주들은 타주에 있는 판매자들(remote sellers)로부터 해당 주의 물리적 실재 (physical presence)와는 상관없이 sales tax  를 걷도록 하는 법안을 이미 채택하거나 입법중에 있다.

2018년 10월 1일부터, 아래와 같은 주에 물건을 판매하는 타주에 있는 판매자 (remote sellers)들은  해당 주의economic nexus 한계를 만족한다면 sales tax를 걷어야한다.

• Alabama
• Illinois
• Indiana
• Kentucky
• Maryland
• Michigan
• Minnesota
• New Jersey
• North Dakota
• Washington State
• Wisconsin

위에 있는 주들 외에도 더 많은 주들이 Wayfair의 판례를 따라, sales tax nexus 기준을 새로 도입하거나 기존 법안을 수정할 것으로 보인다. 여러 주로 물건을 판매하는 판매자들은 각 주에서의 자신들의  상태를 확인하고, 각각의sales tax법안에 잘 준수하고 있는지를 평가해볼 필요가 있다. 아울러, 각 주의 sales tax 법안의 현황과 변화에 대해서도 주목해야할 것이다.

As discussed in our newsletter http://www.kyjcpa.com/news-updates/supreme_court_overturns_quill/ in Wayfair, the U.S. Supreme Court overruled the physical presence nexus standard in requiring remote sellers to collect sales tax.   Following the Wayfair, many states have adopted or are in process of adopting law that would require out-of-state retailers to collect sales taxes on their in-state sales without regard to physical presence in the state.

Effective October 1, 2018, remote sellers making sales to the following states are required to collect sales tax if they meet the state’s economic nexus threshold:

• Alabama
• Illinois
• Indiana
• Kentucky
• Maryland
• Michigan
• Minnesota
• New Jersey
• North Dakota
• Washington State
• Wisconsin

We expect more states will adopt or amend sales tax nexus standard in response to the Wayfair case. Multi-state retailers are recommended to assess its in-state footprint and assess the compliance requirement, and closely monitor legislative changes and current statutes.

The IRS issued proposed regulations regarding the first-year bonus depreciation under Section 168(k). Section 168(k) extends and modifies bonus depreciation, allowing businesses to immediately deduct 100% of the cost of qualified property in the year it is acquired and placed in services through 2022, generally.  The regulations address definition of qualified property, eligibility of used property for bonus deprecation, placed in service definition, and time and manner of making elections.

Qualified Property:   Property may be qualified property for bonus depreciation if it is of a specified type.  Property is of a specified type if it is a Modified Accelerated Cost Recovery System (MACRS) asset which had a recovery period of 20 years or less, generally.

Used Property:  Property may be qualified property if the original use of the property begins with the taxpayer or the taxpayer acquires used property that meets certain requirements.  An acquisition of property meets the requirements of the provision if the property was not used by the taxpayer at any time before the acquisition, and the acquisition is not between the related parties, among controlled group members, or where the nonrecognition provisions apply.

Acquired and Please-In-Service Date:  With an exception to long term contract, to be eligible for 100% bonus depreciation, the property must be acquired and placed in service after September 27, 2017 and before 2022.

Elections:  Consistent with prior law, taxpayers may make an annual election to elect out of bonus depreciation on a class-by-class basis, and it is irrevocable.  Additionally, taxpayers can elect to claim 50% bonus depreciation in lieu of 100% bonus deprecation

Additionally, the regulations provide that Section 754 optional basis adjustment related to 743(b) transactions allocated to qualified property of a partnership may qualify for the bonus depreciation.

The IRS issued proposed regulations regarding the qualified business income deduction under Section 199A.  Below is a quick summary of the provision and certain items contained in the proposed regulations that stand out.

Section 199A allows owners of partnerships, S-Corporations, trust, and sole proprietorships to deduct 20% of their qualified business income (QBI) starting in 2018.  The deduction is equal to the lesser of 20% of taxpayer’s QBI or 20% of taxable income minus capital gains.  Deductions for taxpayers with taxable income above $315,000 for joint returns and $157,500 for other taxpayers (the Threshold Amount) may be subject to the two limitations (Wage & Capital Limitation and Specified Services Limitation).

Limitation Based on Wages & Capital:  The deduction attributable to 20% of QBI is limited to the greater of (1) 50% of the taxpayer’s share of W-2 Wages paid with respect to the QBI or (2) the sum of 25% of the taxpayer’s share of W-2 Wages plus 2.5% of the unadjusted basis of qualified property.  The Wage & Capital limitation does not apply to taxpayers with taxable income not exceeding the Threshold Amount.

Specified Services Limitation:  The deduction attributable to 20% of QBI may be subject to the Specified Services Limitation if the taxpayer’s taxable income exceeds the Threshold Amount and derives income from specified service trade or business, as defined below.  In computing the QBI with respect to a specified service trade or business, the taxpayer takes into account only the applicable percentage of qualified items of income, gain, deduction, or loss, and of allocable W-2 Wages and qualified property. The applicable percentage with respect to any taxable year is 100 percent reduced by the percentage equal to the ratio of the taxable income of the taxpayer in excess of the threshold amount, bears to $50,000 ($100,000 in the case of a joint return).  A specified service trade or business means any trade or business involving the performance of services in the fields of health, law, accounting, actuarial, sciences, performing arts, consulting, athletics, financial services, brokerage services, or any trade or business where the principal asset of such trade or business is the reputation or skill of one or more of its employees or owners.

Additionally, regulations contain aggregation rules allowing separate trades or businesses to be grouped when applying the Sec. 199A rules. The regulations impose a duty of consistency that requires that once multiple trades or businesses are aggregated into a single aggregated trade or business under Sec. 199A, taxpayers must consistently report the aggregated group in subsequent tax years.

해외유보이익 강제송환 법안 관련 집중 세무조사 (campaign) 항목 공시

 2018년 7월 2일IRS의 대기업 및 국제기업을 담당하는 LB&I(Large Business & International)에서 세법 965에 대한 내용을 포함하는 5개의 집중 세무조사 (campaign) 항목을 추가 공시하였다.  IRS는 한정된 인적/물적 자원을 보다 효과적으로 사용하기 위하여 납세자들의 철저한 검토가 필요한 부분 및 규정불이행의 리스크가 있는 부분을 집중 세무조사 항목으로 지정한 바가 있다. 이를 기반으로, LB&I는 세무쟁점 중심의 감사 (issue-based examination)을 진행하게 되며, 이에 맞추어서 IRS 직원들을 훈련하고 감사 대상 선정 및 납세불순응을 선별하는 절차를 발전시켜, 납세자들의 보다 향상된 세법준수를 유도하는 것이다.

미국세법 965항에 따라, 미국투자자들은 2017년도 세금보고를 할 시에 특정조건을 충족하는 해외법인들의 유보이익에 대해서 미국으로 배당을 받은것으로 간주하여 세금을 납부하여야 한다. 이 항목에 대한 세수입이 상당할 것으로 예상되며, 이에 맞추어서 IRS에서는 이 내용을 IRS 집중 세무조사 항목에 추가하는 한편, 관련 세법조항에 대해서 여러가지 가이드를 제공하였다 (https://www.irs.gov/businesses/section-965-transition-tax 참조). IRS에서 발표한 내용에 따르면 납세자들은 세법 조항 965에 맞게 세금이 계산되었음을 증명할 적절한 자료를 보관하여야 하며, IRS는 이 자료를 기반으로 하여 초기 감사를 진행하며, 추후에 추가 자료를 요청하여 세법준수의 여부를 확인할 예정이다.

IRS에서 추가로 965에 대한 내용을 발표하는 등 이 이슈에 대해서 집중적인 관심이 쏠릴것으로 보임에 따라 이에 맞추어 납세자들의 세법준수 및 이를 증명할수 있는 자료를 준비해 두어야 할 것으로 보인다.

IRS 링크 참조:  https://www.irs.gov/businesses/irs-announces-the-identification-and-selection-of-five-large-business-and-international-compliance-campaigns

IRS Audit Campaigns - Section 965 Transition Tax

The IRS Large Business and International division (LB&I) updated list of audit “campaigns” on July 2, 2018, which now includes the Section 965 Transition Tax.  These campaigns are part of the IRS’s strategy to focus limited resources on areas in which the IRS believes scrutiny is needed or present risk of noncompliance.  LB&I ’s compliance campaigns have been implemented in an effort to move toward issue-based examination, train its agents and implement process to improve return selection, identify issues representing a risk of non-compliance and drive taxpayers’ behavior.

Section 965 requires United States shareholders to pay a transition tax by due date of 2017 tax return on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States.  As this provision is considered to be the single most largest revenue generator for the government, IRS has issued many guidance related to the provision, including External Communication https://www.irs.gov/businesses/section-965-transition-tax, and added the provision to its audit campaigns.   In its external communication, it stated that “taxpayers must keep adequate records to support the calculation of tax pursuant to section 956.  The IRS plans to monitor compliance with the provision of section 965.  Follow-up inquires may occur if the IRS determines that the required filings and/or payments are not made.”

As we expect increased scrutiny related to section 965 compliance, as evidenced by launched audit campaigns and many guidance and communications issued, we advise that you retain adequate records to support the section 965 tax computation.

Link to July 2 IRS announcement:  https://www.irs.gov/businesses/irs-announces-the-identification-and-selection-of-five-large-business-and-international-compliance-campaigns

States React to the Wayfair Supreme Court Case

In response to the Supreme Court Case, South Dakota v. Wayfair, Inc., which now frees up states to levy taxes on sales of goods and services regardless of whether the seller has a physical presence in state, many states have already implemented state legislatures or issued guidance, and here is what know so far:

Idaho

The Tax Commission stated that it will adopt a new law that would require out-of-state retailers to collect Idaho sales tax on their in-state sales when the total in-state sales exceeds $10,000 in the previous year effective July 1, 2018.

Iowa

The state enacted economic nexus standard effective January 1, 2019.  Under the economic nexus standard, remote sellers are required to collect the state sales tax if it has in-state annual gross sale of $100,000 or more, or completed more than 200 in-state sales.

North Dakota

The Office of State Tax Commissioner issued a notice stating that unless the seller meets the small seller exception, the remote seller is required to register and begin collecting the tax in the state on October 1, 2018.

Rhode Island

The Department of Revenue issued a statement confirming that the economic nexus standard (that is similar to that of South Dakota) enacted in 2017 will be enforced.

Texas

The Texas Comptroller stated that it will evaluate the outcome of the Supreme Court case and may need to update its rules, however it does not intend to retroactively apply the new law to remote sellers.

Vermont

The Department of Taxes stated that remote sellers meeting the economic nexus thresholds during any preceding 12-month period are required to register to collect and remit sales tax beginning July 1, 2018.

Mississippi

The Department of Revenue stated that the state requires any remote sellers who has annual gross sales greater than $250,000 to register and collect the tax from the in-state customers.

New Jersey

The state introduced to adopt an economic nexus rule (that is similar to that under South Dakota law).

Louisiana

Economic nexus rules similar to that of South Dakota was quickly introduced, if passed, would be effective August 1, 2018.

North Dakota

The Department of Revenue issued a statement confirming that the economic nexus standard (that is similar to that of South Dakota) enacted in 2017 will be enforced.

We expect more states will likely act quickly to amend their sales tax statutes to reflect the decision of the Supreme Court case and begin levying sales and use tax on any interstate sales that has substantial sales in the state without regard to the physical presence.  Multi-state retailers or service providers are recommended to closely monitor state legislative changes and current statutes to be compliance.

For additional detail on the Supreme Court Case, South Dakota v. Wayfair, Inc., please refer to our newsletter dated June 28, 2018.  http://www.kyjcpa.com/news-updates/supreme_court_overturns_quill/

온라인 쇼핑이 점점 더 커지고 있다. 온라인 쇼핑이 성장한데에는 여러가지 이유가 있겠다. 클릭 몇번으로 구매가 가능하고, 가격비교도 용이하며, 구매할 수 있는 물품의 가지수도 무한하다. 또한, 경우에 따라서는 세일즈 택스(sales tax)를 내지 않고 구매가 가능하다. 하지만, 지난 6월 21, 미국 대법원에서 이러한 세일즈 택스에 대해서 기존의 판례를 뒤엎는 판결을 내림에 따라서 온라인 판매업자들에게 변화가 예상된다.

기존의 판례(하단 *1 참조)에 따라서, 주(state)들은 재고자산, 창고, 및 사무실 등 물리적실재(physical presence)가 있는 회사에게만 세일즈 택스를 과세할 수 있다. 대신, 주 밖에서 사온 물건에 대해서는 소비자들이 유즈 택스(use tax)를 신고 및 납부하여야 하지만, 개별 소비자들이 이러한 규정을 따라 자발적으로 유즈 택스를 납부하는 경우는 매우 드물다. 이러한 경우, 소비자들에게는 조금 더 싼 가격에 물건을 구매할 수 있게 되고, 따라서 판매자가 영업하기에 더 좋은 조건이 될수도 있지만, 주에게는 세수손실이 발생하게 된다.

사우스 다코타(South Dakota)주 또한, 다른주와 마찬가지로 물리적실재가 있는 업체에게만 세일즈 택스를 부과해 왔으며, 이에 따라 발생하는 연간 세수손실은 약 사천팔백만불($48M)에서 오천팔백만불($58M)로 예상된다. 이와 같은 세수손실이 주 및 지방에서 이뤄지는 정부활동에 대한 자금부족과 맞물리기 때문에, 사우스 다코타주는 물리적실재가 없더라도 특정 요건을 충족하는 업체들에게 세일즈 택스를 부과하는 법안을 발표했다. 이러한 법안은 연간 1) 십만불($100,000)이상의 물건을 배달하는 업체 혹은 2) 200건 이상의 거래내역이 발생하는 업체에게 세일즈 택스를 부과하도록 한다.

이러한 법안이 기존 판례에 반대 되기 때문에, 사우스 다코타 주는 이 법안에 대해서 확인판결을 신청하였다. 이 재판의 상대는 Wayfair, Inc., OverStock.com, 그리고 Newegg, Inc.와 같은 사우스 다코타 주 안에 물리적실재가 없어 세일즈 택스를 납부하지 않지만 대 규모의 판매가 이루어 지고 있는 회사들이었다. 이와 같은 법안은 위헌이라고 사우스 다코타 법원이 판결하였지만, 연방 대법원은 이와 같은 판결을 뒤집고 사우스 다코타의 손을 들어 주었다.

대법원은 과거의 판례를 뒤집는데에 다음과 같이 3가지 이유를 들어 기존 Quill판결이 어떻게 헌법상 통상조항을 잘못 해석한 판결인지 설명했다.

1. 밀접한 연관이 있는(“closely related”) 업체에게 과세를 한다는 내용 중 밀접한 연관을 물리적실재의 유무로 판단하는 해석은 올바르지 않은 점.
2. 기존 판례는 시장경제의 왜곡을 해소시킨 것이 아니라 물리적실재가 없는 업체들에게 합법적 조세피난수단을 제공하는 등 이와 같은 왜곡을 더 극심화 시켰킨 점.
3. 임의적이며 형식뿐인 차별을 발생시킨 점. 이를 설명하기 위해 대법원 판결문이 든 예에 따르면, 사우스 다코타주에 창고를 갖고 있는 작은 사업체는, 그 창고와 실질적 매출의 상관여부와 관계 없이 세일즈 택스를 부과해야 하지만, 같은 품목을 온라인으로 판매하지만 사우스 다코타주에 물리적실재가 없는 업체는 판매금액이 아무리 크더라도 세일즈 택스의 대상이 아니다. 판결문은 이와 같은 차별은 말도 안되는 일(“this distinction simply makes no sense”)이라고 밝혔다.

반대의견을 작성한 대법관 John Roberts와 Breyer, Sotomayor, 그리고 Kagan은 지난 판례가 잘못된 것과 온라인 상권이 현재 경제에 큰 영향을 끼친 것은 동의하지만, 이러한 조정은 경제에 큰 영향을 끼칠 수 있기 때문에 이에 대한 내용은 의회에서 조정되어야 한다고 밝혔다. 이에 따라, 미국 전역에 단일 적용시킬 법안이 의회에서 발표 될 것으로 예상된다. 또한 이러한 판례를 통하여서 각 주에서 세수손실을 막기 위한 비슷한 법안들이 발표될 것으로 예상된다.

이에 따라, 온라인 판매를 하고 있는 회사들은 연방 및 주에서 관련한 규정에 대한 숙지와 대비가 필요하다. 여러 회사들은 그 동안 각 주에서 물리적실재가 없는 회사에도 세일즈 택스를 부과하는 경우 지난 판례를 사용하여 세일즈 택스의 의무를 피하는 스탠스를 취해왔다. 하지만, 이제 지난 판례들이 뒤집히게 됨에 따라, 이러한 스탠스는 세일즈 택스 전문가의 도움을 받아 재검토 되어야 한다.

대법원판결은 이곳에서 확인하실 수 있습니다: https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf

*1: National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753 (1967), and Quill Corp. v. North Dakota, 504 U.S. 298 (1992)

Supreme Court overturns Quill’s physical presence requirement

Whether it is because of the convenience, low prices, or wide selection we’ve been seeing more and more of online shopping in recent years. Online purchases can have another characteristic: online purchase can be sales tax free. This may now change after the Supreme Court ruled in South Dakota vs. Wayfair, Inc. on June 21, 2018.

Under previous rulings (*1), states may not require businesses to collect sales tax unless they have a physical presence to the state. Instead, in-state consumers are responsible for paying use tax at the same rate; but compliance with the use tax is low. This could provide more savings for customers and hence better operating environment for sellers, but this also means loss of revenue for states.

South Dakota, like many states, taxes only the businesses with physical presence in the state and it is estimated that the state loses between $48 and $58 million sales tax revenue annually. Concerned about the erosion of its sales tax base and corresponding loss of critical funding for the state and local services, South Dakota enacted a law requiring certain out-of-state sellers to collect and remit sales tax. The act only applies to sellers that, on an annual basis, i) deliver more than $100,000 of goods or services into the state or ii) engage in 200 or more separate transactions for the delivery of goods or services into the state.

South Dakota’s Legislature knew that its new act would be considered unconstitutional unless previous rulings were overturned. South Dakota filed a declaratory judgment action in state court against Wayfair Inc., Overstock.com, and Newegg Inc., all of which are large internet merchants that have no physical presence in South Dakota and do not collect sales tax. The law was first declared unconstitutional by South Dakota courts, then the Supreme Court granted certiorari.

In deciding to overrule the prior ruling, the U.S. Supreme Court stated that Quill banning sales tax collection when businesses lack “physical presence” in a state was an incorrect interpretation of the Commerce Clause. First, the Court criticized that the physical presence rule is not a necessary interpretation of the “closely related” nexus requirement. Second, the Court found that the prior ruling creates, rather than resolves, market distortions, calling it a “judicially created tax shelter for businesses that decide to limit their physical presence”. Third, the Court found that Quill imposes “arbitrary, formalistic” distinctions that run counter to the Court’s modern precedents under the Commerce Clause. The Court also provides an example: a business that has a warehouse, even though the warehouse has nothing to do with the sales, would be required to collect sales tax, while an online retailer with pervasive internet sales cannot be subject to the same tax for the sales of the same items. The Court states “this distinction simply makes no sense”.

In dissenting opinion, Chief Justice John Roberts, with whom Justices Breyer, Sotomayor, and Kagan joined, wrote that, although he agreed that previous ruling was wrongly decided, and that the internet commerce has improved the economy greatly, any alteration to those rules with the potential to disrupt the development of such a critical segment of the economy should be undertaken by Congress. Which may have put some pressure on congress to move ahead with legislation on this issue to provide a national standard for e-commerce. Also, it is expected that other states will now change their laws to take advantage of the decision.

Companies with remote sales should closely monitor current and potential state and federal legislation and related sales tax exposures. Before Wayfair, even though some states require sales tax responsibilities to remote sellers without physical presence in the jurisdictions, some companies chose not to comply with the regulations since they have favorable previous rulings. This position needs to be re-analyzed as the previous rulings were overturned. Companies should consult with sales tax experts.

Please refer to the Supreme Court Opinion: https://www.supremecourt.gov/opinions/17pdf/17-494_j4el.pdf

*1: National Bellas Hess, Inc. v. Department of Revenue of Ill., 386 U.S. 753 (1967), and Quill Corp. v. North Dakota, 504 U.S. 298 (1992)

IRS Notice 2018-122: 주정부세 및 지방세 납부 공제

세법개정에 따라 과세년도 2018년부터 2025년까지 개인이 지불한 주정부세 및 지방세에 대한 공제가 연 $10,000로 제한된다 (부부개별신고의 경우 $5,000).

이러한 제한에 대응하여, 일부 주정부에서는 납세자들이 납세의 형태로 지불하는것이 아닌, 주 정부 또는 지방 정부가 관리하는 펀드 및  주 정부가 지정한 다른 양수인에게  지불하는 방법을 허용하는 입법안을 고려하고 있거나 이미 채택하였다. 이러한 입법안들이 바라는 효과는, 납세자들이 주정부세 및 지방세 납부 의무를 다하는 동시에, 연방 소득세 계산 시 이와 같은 송금액을 공제대상인 자선 기부금으로 처리 할 수 있게 되는 것이다.

IRS가 Notice 2018-122를 통해 밝힌 바에 따르면, IRS는 추후에 이와 같은 주 정부 또는 지방 정부가 관리하는 펀드에 송금되는 금액에 대한 연방 소득세에 대한 규정을 발표할 계획이다. 이 규정을 통해 IRS는 실질 과세의 원칙 (Substance over Form)을 통해 이러한 송금액이 연방세법에서 규정하는 자선기부금인지가 결정될 것임을 밝힐 것이다. 이에 따라, 납세자들이 실질적인 납세금액을 공제받을 수 있는 자선 기부금으로 임의로 재특정 지을 수 없도록 제한될 것이다.

자세한 설명은 아래의 링크를 참고하시기 바랍니다.
https://www.irs.gov/pub/irs-drop/n-18-54.pdf