Tax News

CCH (cch.taxgroup.com) reports:

  New Hampshire has enacted legislation that prohibits New Hampshire retailers from providing private consumer information to a state for use in the determination of a consumer's or a retailer's sales and use tax liability in that state with respect to a New Hampshire retail purchase transaction, unless that state has provided formal notice to the New Hampshire Commissioner of Revenue Administration of its intention to collect use tax on such transactions and the Department of Justice has determined that the state's sales and use tax statutes:

  -- impose upon its residents a requirement to individually pay sales or use tax on the use, storage, or consumption of goods or services purchased in any other state;

  -- specifically identify the goods and services to which the use tax applies;

  -- require that the retailer or its affiliates have adequate physical presence to establish nexus with that state for the imposition of an obligation of the retailer to determine, collect, and remit tax with respect to purchases by that state's residents;

  -- require every resident to submit an annual statement to that state identifying each item purchased outside the state for use in the state;

  -- require that state or its residents to provide the retailer at the time of a New Hampshire retail purchase transaction with information establishing whether the goods or services purchased are intended to be used, stored, or consumed outside New Hampshire, and provide that this information is irrefutably presumed to be correct and complete and may be relied upon by retailers;

  -- require that state's tax agency to annually audit, investigate, or examine at least 10% of the total use tax returns filed by its residents;

  -- require that state's tax agency to conduct its audit, investigation, or examination practices with respect to residents' use tax returns in a manner that ensures that such practices are applied equally regardless of the state in which the sales transaction occurs, and to file an annual public report demonstrating compliance with this nondiscrimination requirement;

  -- create an irrebuttable presumption that, in the absence of voluntary information by the resident, the goods or services purchased are intended to be used in the state in which they are purchased; and

  -- explicitly impose use tax collection requirements on out-of-state retailers with respect to retail purchase transactions that are completed in those other states.

S.B. 5, Laws 2009, effective July 9, 2009

CCH (cch.taxgroup.com) reports:

  The Louisiana corporate and personal income tax and franchise tax credit for research and development expenses is amended and extended. Specifically, the expiration date of the credit has been extended to December 31, 2013 (previously, 2009). Various definitions have also been amended.

CCH (cch.taxgroup.com) reports:

  The IRS may allow taxpayers to claim a casualty loss deduction for defective Chinese-made drywall, the Service indicated in a recent letter to Sen. Jim Webb, D-Va. Individuals in 21 states have complained of headaches and other health problems from noxious odors they claim are emitted from Chinese-made drywall. However, the IRS appeared to reserve making a final determination pending conclusion of a government investigation into the drywall.

Noxious Odors

  The U.S. Consumer Product Safety Commission (CPSC) has received complaints from more than 600 individuals about defective Chinese-made drywall. The majority of the complaints have come from individuals in Florida, Louisiana and Virginia. Residents of Alabama, Arizona, California, Georgia, Indiana, Kentucky, Louisiana, Michigan, Mississippi, Missouri, New Jersey, New York, North Carolina, Ohio, Tennessee, Texas, Virginia, Washington, Wisconsin, Wyoming and the District of Columbia have also reported problems with Chinese-made drywall.

  According to the homeowners, putrid odors from the drywall cause irritated and itchy eyes and skin, difficulty breathing, bloody noses and headaches. The odors have also reportedly corroded pipes and electrical equipment. The CPSC, the U.S. Environmental Protection Agency (EPA) and other federal agencies are collecting samples of Chinese-made drywall from affected homeowners. The CPSC indicated that laboratory analysis of the drywall should be completed my mid-September 2009.

Casualty Loss

  In June, Webb and several of his colleagues in the Senate asked the IRS if affected individuals could claim a casualty loss deduction under Code Sec. 165(h). "Taxpayer losses associated with Chinese drywall seem to meet the criteria for the deduction," Webb told the IRS.

  The IRS replied to Webb on July 2, and Webb made the letter public on July 10.

  The IRS noted the CPSC investigation. "If it is determined that Chinese-made drywall emits an unusual or severe concentration of chemical fumes that cause the extreme and unusual damage you describe, affected taxpayers can qualify for a casualty loss deduction," the IRS indicated.

  By George L. Yaksick, Jr., CCH News Staff

IRS Chief Counsel Letter Regarding Chinese-Made Drywall

CCH (cch.taxgroup.com) reports:

  The IRS has issued interim guidance on the procedures that manufacturers must use to certify a vehicle as eligible for the new specified qualified plug-in electric vehicle credit under Code Sec. 30. Guidance is also provided to purchasers of qualified vehicles regarding reliance on the manufacturer's certification in claiming the credit.

 
Code Sec. 30 provides a tax credit for 10 percent of the cost (up to $2,500) of a qualified plug-in electric vehicle placed in service by the taxpayer after February 17, 2009. However, the credit is not available for a vehicle placed in service before 2010 if the credit for a qualified plug-in electric drive motor vehicle under
Code Sec. 30D may be claimed for the vehicle. A qualified plug-in electric vehicle includes certain specified electrically powered two-wheeled, three-wheeled, and low-speed vehicles.

  A manufacturer's certification that a vehicle is eligible for the credit must include a statement that the vehicle is made by the manufacturer, as well as the make, model or other identifier of the vehicle. The certification must also include the vehicle's gross weight, the number of wheels, a statement that the vehicle is propelled to a significant extent by an electric motor that draws electricity from a battery, the kilowatt hour capacity of the battery, and a statement that the battery is capable of being recharged from an external source of electricity. With respect to low speed vehicles, the certification must provide a statement that the vehicle is a low speed vehicle within the meaning of federal regulations, and that the maximum speed attainable by the vehicle in one mile is more than 20 miles per hour but not more than 25 miles per hour on a paved level surface.

  The IRS will review and acknowledge the certification presented by a manufacturer within 30 days of receipt of the certification. A manufacturer's right to provide a certification to future purchases of a vehicle will be withdrawn if the IRS determines that a vehicle is not qualified for the credit. Purchasers who acquire vehicles after the withdrawal date may not rely on the certification. However, purchasers may continue to rely on a certification for a vehicle acquired before the withdrawal date even if the vehicle is not placed in service yet or the credit is claimed after the withdrawal date.

  Except for the withdrawal of acknowledgment by the IRS, purchasers of a qualified electric plug-in vehicle may rely on a manufacturer's certification for purposes of claiming the credit. The purchaser may claim the credit in the certified amount with respect to the vehicle if the following requirements are satisfied:

  the vehicle is acquired after February 17, 2009, and before January 1, 2012;

  the original use of the vehicle commences with the taxpayer;

  the vehicle is acquired for use or lease by the taxpayer, and not for resale; and

  the vehicle is used predominantly in the United States.

Notice 2009-58, 2009FED ¶46,424

Other References:

 
Code Sec. 30

  CCH Reference - 2009FED ¶4056B.01

  Tax Research Consultant

  CCH Reference - TRC INDIV: 58,010

Tax Analysts report: