Sales Tax Changes in 2016

Chicago will once again have the highest sales tax rate of any major US city starting January 1, 2016.  The rate will spike from 9.25% to 10.25%.  The rate hike is due to the increase in county sales tax.  The Cook County Board narrowly approved the increase to restore financial health to the county’s pension system, debt incurred from previous years and to boost spending on roads and bridges.

Washington State has amended their definition of retail sales to include businesses that provide recreational services or operate athletic or fitness facilities.  Businesses including but not limited to: amusement parks, batting cages, bowling, fishing, go-karts, hang gliding, hunting, paintball, skating, snow sports, swimming, and zip lining will be subject to the retail sales tax starting January 1, 2016.

New Orleans’ French Quarter residents approved a new quarter cent sales tax.  Along with the new tax the French Quarter Economic Development District was created.  The tax will go into effect on January 1, 2016 making the sales tax rate 9.25% for retail sales and close to 10% for restaurants.  The estimated $2 million generated by the sales tax will fund additional public safety measures.  Residents are asking for full-time state trooper presence in the Quarter.  Roughly 9 million tourists visit the French Quarter yearly.  They will end up paying the bulk of the sales tax.  The tax is due to expire on December 21, 2020.  However, voter approval can extend it.

The Maine Service Provider Tax currently applies to sales of several cable and satellite television services and telecommunications services.  Starting January 1, 2016 the list of services subject to tax will add the following: basic cable and satellite television service (currently only the ‘extended’ services are subject to tax), residential interstate and international telecommunication services (starting 1/1/16 only services sold to businesses will qualify for the exemption, whereas, currently it is exempt for all customers) and satellite radio services, including the installation and use of associated equipment.

Clark County in Nevada has approved a “More Cops” sales tax increase.  The .05 percent county sales tax increase will go to hire more police officers for Metro and police departments in Henderson, North Las Vegas, Mesquite, and Boulder City.  The sales tax increase will start on January 1, 2016.

North Carolina’s new budget includes an expansion in sales tax.  Beginning March 1, 2016 the North Carolina Department of Revenue will be tasked with determining specific services to be taxed.  The budget did not write the tax code, but the legislation states that sales tax should be collected by all repair, maintenance and installation service providers.  According to North Carolina’s Senator, Bob Rucho, the aim of the state is to get rid of income tax and move to a consumption based tax.  He stated that sales taxes are a more stable revenue source.  Estimates show the increase in sales tax will bring in an additional $160 million during the 2016-2017 fiscal years.

Many state and local rates will change starting January 1, 2016.  For information on a specific jurisdiction, please feel free to contact tax@allynintl.com.

 

Tips for the Taxpayer

Stay up-to-date with state and local tax rates.  In an audit, the taxpayer will be responsible for the correct tax rate.  Stay current with your state, county, and city legislation.  Look for planning opportunities and exemptions that might be applicable to your company.

For More Information

If you are interested in learning more about this topic or other tax topics, please visit our Tax Publications under News and Events at www.allynintl.com.

How Can We Help?

Allyn’s tax team is staffed with seasoned tax professionals experienced in all aspects of Federal, multi-state and local tax compliance and consulting for large US and global corporations.  We use that experience to your advantage.

Allyn files state and local sales and use tax returns in every US taxing jurisdiction.  We can manage your tax compliance, create a solid tax process, and provide audit defense for your company.

Contact us and we can provide a customized cost-effective solution to meet your company’s needs.  For further information on Allyn Tax services, please contact: tax@allynintl.com.

Publication Contributor: Jenny Opp

 

About Allyn International

Allyn International is dedicated to providing high quality, customer centric services and solutions for the global marketplace. Allyn's core products include transportation management, logistics sourcing, freight forwarding, supply chain consulting, tax management and global trade compliance.  Allyn clients range from small local businesses to Fortune 500 firms. Allyn conducts business in more than 20 languages and has extensive experience in both developed and emerging markets. Highly trained experts are positioned throughout North America, Europe and Asia and Allyn regional headquarters are strategically located in Fort Myers FL USA, Shanghai P.R. CHINA and Prague, CZECH REPUBLIC. For more information, log on to www.allynintl.com.