Month: October 2016

STATE TAXATION ON MAIL ORDER

Quill Corp. vs. North Dakota

On May 26th, 1992, United States Supreme Court held that a mail order house, may have the minimum contacts necessary in accordance with the due process clause of the constitution with the taxing state relative to imposition of tax, yet lack the substantial nexus, as required by the Commerce Clause, with the state to have such tax imposed. Therefore, mere lack of physical presence in a taxing state does not in and of itself bar the taxing state from asserting a tax against such company.

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TAX TIPS

On August 5th, 1997, President Clinton signed the Tax Relief Act of 1997.  The majority of the changes apply for years beginning after December 31st, 1997.  Exceptions to this include the Capital Gains Tax relief and the new exclusion for sellers of their principal residence.

HIGHLIGHTS OF NEW TAX ACT

TAX CREDIT FOR EACH QUALIFYING DEPENDENT CHILD UNDER AGE 18.

Beginning in 1998 parents get a tax credit equal to $400.00, $500.00 after 1998, for each qualifying dependent child under age 18.  A phase out of the tax credit applies for joint taxpayers whose adjusted gross income exceeds $110,000.00.

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IRS Debt

What the IRS Giveth the IRS Taketh Away

In a prior column I wrote extensively on the usage of private annuities to sell one’s business, real estate or any large assets with the current incurrence of income tax.  IRC §72 and Rev. Rul. 69-24, 1969-1 C.B. 43.  Case law supported this view point and there had not been much if any current litigation on this issue.  Bell v. Comr., 60 T.C. 469 (1973), 212 Corp. v. Comr., 70 T.C. 788 (1978).

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