KPMG reports: Alabama (rental tax); Pennsylvania (sales tax on vehicle financing); Utah (reduced tax rates)

KPMG’s This Week in State Tax focuses on recent state and local tax developments.

KPMG’s This Week in State Tax focuses on recent state and local tax developments.

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.

  • Alabama: The Department of Revenue issued a notice requiring rental facilitators to remit rental tax for leases made to Alabama customers or to comply with certain notice and reporting requirements. “Rental facilitators” are persons that facilitate third-party rental transactions of property classified as Class II or Class IV for property tax purposes. Rental facilitators are required to apply for a special tax account irrespective of whether they choose to remit rental tax or comply with the state’s notice and reporting requirements.
  • Pennsylvania: The Board of Finance and Revenue denied a taxpayer’s claim for refund of sales tax for taxes paid on vehicle finance contracts written off as bad debts. Under Pennsylvania law, a vendor or lender is entitled to a refund of sales taxes when previously reported and paid to the Department of Revenue if certain conditions are met. For these purposes, a lender includes a person that owns or has owned a private label credit card account pursuant to a contract with the vendor that reported sales taxes. The Board of Finance and Revenue rejected the taxpayer’s argument that its vehicle financing agreements were akin to private label credit cards. 
  • Utah: Senate Bill 59—signed into law on February 11, 2022—reduces the corporate income tax rate to 4.85% (from 4.95%) effective for tax years beginning on or after January 1, 2022. The state’s flat individual income tax rate is likewise reduced to 4.85% (from 4.95%).

Read a February 2022 report prepared by KPMG LLP

 

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