The SALT Shaker – July 2016

July 1, 2016

By Keith Habel, CPA
Partner, SALT Practice Leader

Illinois

Drug-Releasing Implant Considered Medical Device Subject to Lower Tax Rate: In a recent Private Letter Ruling, the Illinois Department of Revenue determined that a sinus implant that provides patients with a sustained release of a steroid drug was eligible for Illinois’ 1% sales and use tax rate on medicines and medical appliances. ST 16-0002-PLR

Voluntary Disclosure Program for Unpaid HOOT Offered: Taxpayers and homeowners who rent out rooms or their homes to the general public are liable for the hotel operators’ occupation tax (HOOT). The Department of Revenue will waive late payment penalties to taxpayers who are registered if the taxpayer files amended returns reporting unpaid HOOT before September 15, 2016. Non-registered taxpayers can take advantage of the Illinois Voluntary Disclosure Program to register and remit past-due tax. Compliance Alert

Iowa

Application of Permanent Cosmetics: In a recent Policy Letter, the Iowa Department of Revenue determined that the application of permanent cosmetics is a taxable service, unlike traditional tattoo services. Even though a licensed tattoo artist must apply the permanent makeup, and this person need not be a cosmetologist, the service provided is subject to sales tax as barber and beauty services. Policy Letter 16300031

Geothermal Tax Credit Enacted: Available beginning in 2017, the new geothermal tax credit is equal to 10% of qualified geothermal heat pump installation expenditures. The credit is available for residential installations and is not refundable or transferable but unused amounts may be carried forward for up to 10 tax years. A taxpayer claiming the new geothermal tax credit may not also claim the existing geothermal heat pump tax credit for the same installation. House File 2468

Tennessee

Sales and Use Tax Economic Presence: Effective January 1, 2017, a proposed administrative rule filed by the Tennessee Department of Revenue would require out-of-state vendors to register with the Department and collect and remit sales tax if they have sales to Tennessee customers exceeding $500,000 in a calendar year. Administrative Rule 1320-05-01-.129

Wisconsin

Hospital and Medical Clinic Publication: The Wisconsin Department of Revenue has issued a new publication discussing taxable and nontaxable sales and purchases by hospitals and medical clinics. Publication 248

For more information or assistance on state and local tax (SALT), call 888-556-0123, email info@honkamp.com or submit our online form.

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