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NC Sales and Use Collections on Remote Sales

The North Carolina Department of Revenue issued directive SD-18-6 on 8/7/18 to interpret the North Carolina sales and use tax law as a result of the United States Supreme Court decision in South Dakota v Wayfair.

Remote Sales Subject to Tax

The rules are effective prospectively to sales after October 31, 2018 by remote sellers that do not have a physical presence in North Carolina.  This prospective treatment does not apply to sellers that have a physical presence or other obligation to collect and remit North Carolina sales and use tax.

Remote sellers having gross sales in excess of $100,000 sourced to North Carolina or 200 or more separate transactions in the previous or current calendar year are required to register, collect, and remit sales and use tax effective the later of November 1, 2018 or 60 days after the remote seller meets the threshold.  Remote sellers that do not meet the threshold may voluntarily register with the NCDOR and collect and remit sales and use tax.  Remote sellers may voluntarily begin collecting and remitting sales and use tax any time prior to November 1, 2018.

Engaged in business is defined, in part, as making a remote sale if one of the conditions in G,S, 105-164.8(b) is met, basically if they advertise or solicit business in NC in any way through the media, internet, or distribution of catalogs.

Remote sale is defined as “(a) sale of tangible personal property or digital property ordered by mail, by telephone, via the internet, or by another similar method to a purchaser who is in the State at the time the order is remitted, from a retailer who receives the order in another state and delivers the property or causes it to be delivered to a person in this state.  It is presumed that a resident of this State who remits an order was in this State at the time the order was remitted.”

Remote sellers can register completing an online application through the Streamlined Sales Tax Registration System.

Individual North Carolina Tax Law Changes – This May Affect You!

Tax laws are constantly evolving. Below you can find the most recent tax law change that will affect individual taxpayers in North Carolina:

The North Carolina 2016 Appropriations Act (H1030) was signed into law by the governor on July 14, 2016. While the majority of the Act is the state budget for the year there was one provision included that may affect your 2016 and 2017 individual tax returns.  The standard deduction amounts for 2016 and 2017 were increased by $1,000 for married individuals filing joint returns, $500 for single individuals and married individuals filling separate returns, and $800 for individuals filing as head of household.  So, if the standard deduction of $16,500 for married joint, $13,200 for head of household, or $8,250 for single and married separate is more than your itemized deductions consisting of medical expenses, real estate taxes, mortgage interest and charitable contributions in 2016 your tax may be reduced.

If you have questions, contact the LBA Haynes Strand team today for a no-cost consultation!

3 Keys To Staying Relevant With Your Clients

Staying relevant with your clients is the key to success. This applies to not only retaining your clients, but to also getting referrals from your clients. So, how exactly do you do that? What does staying relevant or becoming more relevant mean?

You talk to your client, you master the industry the client is in, and you provide timely advice and tips that lead to productive results for your client. Ultimately you are building a relationship with your client. One that is built on mutual trust and knowledge share. In North Carolina, especially in the Charlotte and Triad regions, there are dozens of CPA firms that can handle a client’s tax or accounting needs, however client service is where LBA Haynes Strand stands out from the rest. We create strong mutually beneficial relationships with clients. We stay relevant with our clients, and we do that by focusing on three main client service aspects:

1. Industry Acumen

Staying up to date on a client’s industry, including threats and opportunities is key. This includes making your client aware of any changes or updates that they need to be aware of relating to their industry. We pride ourselves in having a diverse team that is able to handle client needs in a number of industries. Most specifically: Charter Schools, Construction, Manufacturing, HOA, Non-Profit, and Entrepreneurs. Our team attends regular seminars, conferences, and other events in all of these fields to stay up to date.

2. Client Collaboration

We cannot stress this enough… work with your client! Your client should feel comfortable to come to you regarding any problem or issue they have and before important decisions are made! Something we have found helpful with our clients is to hold regular planning sessions. These can be monthly, quarterly, semi-annually or just annually – whatever the client feels is necessary. When you sit at the table on the same team with your client, then you are much more likely to provide real value to your client.

3. Client Insight

Focus on the client! Focus on the client’s vision, short-term and long-term goals, and strategic initiatives to meet those goals. You must understand your client in order to provide great service! This can greatly help you, especially when it comes time to offer useful advice to the client. You cannot fully help your client if you don’t understand them.  We highly recommend to take this last step seriously and really get to know your client.

These three steps can greatly increase your relevance with your clients. Thus, creating an excellent client experience and one that will be mutually beneficial for years to come. We know because this is how we handle our clients. If you would like to discuss your tax or accounting needs with a member of the LBA Haynes Strand team, contact us for your no-cost consultation!

NC House Budget Bill 117: Proposed Changes to Sales Tax, Corporate Tax, and More!

On Thursday June 11th, the North Carolina Senate version of the NC House Budget Bill (HB 117) was filed and included a number of changes from the original bill proposed by the NC House or Representatives. Among the changes are: lower personal income tax rates, a change in corporate taxes, a new formula for distributing sales tax revenue among counties, and a retooled jobs incentive program.

Remember, as of right now, all the changes are only proposed. You should, however, be aware of these changes and how they could affect you and/or your business.

New Sales Tax On Services:

The bill would broaden the sales tax base in order to help pay for new income tax cuts. Among the purchases facing sales taxes are: advertising, veterinary and pet care services, and repairs an maintenance work on personal property such as cars. Also this would mean that large non-profit organizations, such as hospitals, would lose a sales tax exemption.

Personal Income Tax Cuts:

The personal income tax rate would be cut from 5.75% to 5.5% beginning in 2016. The standard deduction would increase gradually over a four year period, meaning a married couple filing jointly wouldn’t owe taxes on the first $18,500 of income by 2020. A single person on the other hand wouldn’t owe taxes on the first $9,250 in income.

Corporate Taxes:

The bill proposes that over the next three years, the state would begin using the “single sales factor” formula for calculating corporate taxes. This means calculating the companies’ tax liability based entirely on sales instead of factoring in their payroll and property value.

Sales Tax Redistribution:

Included in the bill is a new distribution formula for allocating sales tax revenue among counties. Basically the state would distribute 20% of revenue based on where sales occur, and 80% would be based on the population of the county. This new version would allow counties to decide how to allocate revenue between their city and town governments.

Job Incentives:

The Job Development Investment Grant incentives would be capped under the new bill. This has been the state’s main job incentive program which has been out of money for months. The state could then offer up to $15 million each year and up to $30 million during a year in which the state lends a “high-yield project” bringing thousands of jobs.

Because House Bill 117 has already cleared the House, changes can no longer be made in public meetings. Instead members of the House can only approve the version passed by the Senate OR vote it down. In the event that it is voted down, legislators from both chambers would work out a compromise.

If you have strong feelings about this bill, you are encouraged to contact your senators. The Senate is expected to begin voting on this bill this week! To find contact info for your local representatives, please click here!

If you have questions about how budget bill 117 will affect you – reach out to LBA Haynes Strand today. Our team will be happy to walk you through the proposed changes and how they will affect you!