On June 7, 2013, the Supreme Court of Texas issued its ruling in Combs v. Health Care Services Corporation, which upheld a government contactor’s refund claim for sales taxes paid on purchases of tangible personal property used by the contractor in performing nontaxable services for the government. The decision should cause similarly situated contractors to consider if they have potential refund claims for open tax periods. However, the decision’s impact is limited by the Texas legislature’s enactment of legislation in 2011 narrowing the types of service contracts for which a government contractor can make tax-free purchases. The refund claims at issue in the case were for tax periods prior to 2011.
The main issue in Combs v. Health Care Services Corporation was whether the taxpayer’s purchases of tangible personal property, such as chairs, printers, and office supplies, were exempt from sales tax because Continue reading »
At their Annual Dinner on June 6, 2013, the Montgomery County Chamber of Commerce presented Lexy Kessler, a partner in Aronson’s Government Contract Services Group, with the Chairman’s Award. Also receiving awards that evening were U.S. Congressman Christopher Van Hollen, Johns Hopkins University, and the U.S. Small Business Administration.
In a press release issued prior to the event, MCCC Chairman Ori Reiss, President & CEO, GlobalNetServices, Inc., remarked, “Lexy is an exemplary member of the Chamber’s Board. It is my pleasure to present her with the Chairman’s Award at the 54th Annual Dinner.”
Lexy is deeply involved with the Montgomery County Chamber of Commerce and the GovConNet Council, which Continue reading »
On May 2, 2013, Governor Martin O’Malley signed into law the Cybersecurity Investment Incentive Tax Credit. The Governor proposed the credit earlier this year as part of his proposed FY 2014 budget. The credit takes effect July 1, 2013, and applies to tax year 2014 through 2018.
Based on Maryland’s biotechnology investment credit, the new cybersecurity credit allows an investor who invests at least $25,000 in a qualified Maryland cybersecurity company to claim a credit in the amount of 33% of investments made in a Maryland cybersecurity company. An investor can receive a refund if the credit exceeds tax otherwise payable for the taxable year. An eligible investment is a contribution to a qualified cybersecurity company in exchange for stock or ownership interest as long as the investor does not acquire an ownership interest in a company that exceeds 25%. Continue reading »
A recent Virginia sales and use tax ruling illustrates how ignoring basic sales and use principles can be costly for businesses. The concept is simple – a sales tax is a consumption tax imposed on the end user of a product. Thus, if your company purchases tangible personal property with the intent of reselling the property (i.e., not consuming it), it generally should not pay sales tax on that purchase. This concept holds true for leases as well. However, a purchaser must notify a seller of this intent by providing a certificate to the seller indicating that the purchased product will be resold. Otherwise, the seller is obligated to collect sales tax.
The failure to apply this foundational sales and use tax concept had a costly result for Continue reading »
Federal courts have consistently ruled that retailers must have a physical presence in a state to be required to collect sales taxes. That has allowed online retailers to offer many customers tax-free shopping. Equally important, the physical presence requirement has allowed smaller businesses using common carriers to expand their customer base without the administrative burden of collecting sales tax. But, with Congress making headway on federal legislation that would eliminate the physical presence rule for many retailers and a recent New York State Court of Appeals decision going against Amazon and Overstock.com, the sales tax collection obligations for retailers may soon become more burdensome.
On March 19th, 75 U.S. Senators supported a non-binding vote of approval for the Marketplace Fairness Act of 2013, a heavily-debated bill that is backed by a coalition of brick-and-mortar retailers such as Wal-Mart and Best Buy and vehemently opposed by certain online retailers such as eBay. Although the vote was only a preliminary approval of a vague summary of the bill that was an amendment to a budget bill, the bipartisan nature of the vote suggests that remote seller legislation could be voted into law this year.
If enacted as is, the bill would allow states to require remote sellers with over Continue reading »
Aronson LLC joined The Howard County Chamber of Commerce (HCCC) and fellow members of the GovConnects Advisory Council to celebrate the launch of a new business-to-government initiative on Wednesday, February 20, 2013. GovConnects will help businesses benefit from significant growth in the cyber security industry and other related federal contracting opportunities.
“Business is generated by the physical presence of U.S. Cyber Command, NSA, and defense contractors in and around Howard County,” said Maureen Thomas, the newly-appointed Executive Director of GovConnects. “Businesses in this region need a resource for specialized training and a forum for networking focused specifically on this niche. GovConnects will meet this need by providing targeted events and current information guided by experienced contracting participants.”
The taxation of cloud computing services is an evolving area of sales and use tax. Cloud computing, which includes a wide variety of service offerings, generally allows businesses the potential to reduce IT costs by outsourcing hardware and software maintenance and support. Still, remote access to software, or “software as a service” (SaaS), is only a small part of what is referred to as “cloud computing.” The term also includes offerings such as Continue reading »
On November 29, 2012, the D.C. Court of Appeals issued a decision upholding a corporate franchise tax exemption for a high-technologies government contractor performing services for the federal government (District of Columbia Office of Tax and Revenue v. BAE Systems Enterprise Systems Inc., TRC-800012-04, 11/29/2012). The case dealt with a high-tech company’s qualification for exemption under the “New E-Conomy Transformation Act” (NET 2000), which grants certain high-technology companies a temporary exemption from the DC’s corporate franchise tax. To qualify, a company must have Continue reading »
The IRS announced it is granting relief to benefit plan sponsors affected by Hurricane Sandy. This relief also includes plan providers whose services impact the filing of Form 5500. In general, plans in the affected areas will have until November 7, 2012 to file returns that otherwise would have been due October 31, 2012.
Relief is automatic, with no action required by plan sponsors. In the event a notice for delinquent filing is received, then the impact of Hurricane Sandy should be referenced in the plan sponsor’s reasonable cause statement. As additional details emerge regarding the storm’s impact, additional filing relief Continue reading »
The conference Workshops provide businesses with access to experts and information about procurement opportunities and best business practices. Continue reading »
What We Are Writing
- A Marriage of Inconvenience: GSA Schedule Contracts & The Contractor Code of Business Ethics & Conduct Clause
- Emerging Small Businesses: To Grow Your Business, You Must Plan For Growth
- Government Contracting: Look Before You Leap!
- GSA Schedules – Strategies for Success
- New Employee vs. Independent Contractor Considerations
- Pay on Display – Understanding the Executive Compensation and Subcontractor Data Reporting Requirements & Ramifications
- The GSA Schedule: Your Ticket to the Federal Market (May 2010)
- The New FAR Codes of Conduct and Compliance Program Provisions
- The Seven Deadly Sins (of contract compliance)