KPMG reports - Arizona (transaction privilege tax); Kentucky (corporate tax); Minnesota (sales tax); Federal (remote retailers) 

February 18:   KPMG’s This Week in State Tax—produced weekly by KPMG’s State and Local Tax practice—focuses on recent state and local tax developments and features a series of short podcasts presented by KPMG tax professionals. Text of the podcasts is also available.

Today’s edition, for February 18, 2013, includes the following topics (listen to the podcasts; to read text, click on the links below).


  • Arizona [PDF 23 KB]: Recently introduced legislation (House Bill 2657) is intended to simplify Arizona’s transaction privilege tax (TPT) rules. House Bill would revise the way the tax is imposed on construction contracting services and materials, by imposing tax in the jurisdiction where the materials were purchased.


  • Kentucky [PDF 23 KB]: Legislation has been proposed to decouple from the IRC section 199 deduction beginning in 2014; to replace the costs of performance test for souring service and intangible income with market-based sourcing rules; and to revise other corporate income tax provisions such as requiring mandatory combined reporting, providing a throwback rule, and defining business income to include all income apportionable under the U.S. Constitution.


  • Minnesota [PDF 23 KB]: Minnesota’s governor budget recommendations include tax changes that would reduce the current sales and use tax rate from 6.875% to 5.5% and expand the sales and use tax base to include a broad range of services that are currently not taxed in Minnesota. All service transactions would be subject to the sales tax unless specifically exempted.


  • Federal [PDF 22 KB]: In Congress last week, legislation was introduced that would authorize the states to require remote retailers to collect sales and use taxes on sales to in-state customers. If enacted, the legislation would authorize states that are members of the Streamlined Sales and Use Tax Agreement (SSUTA) to impose a sales tax collection duty on out-of-state remote sellers. The bill would also grant the same authority to states that are not SSUTA members, but only if the state adopted and implemented certain minimum simplification requirements.


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