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State Sales Tax Rate Change Announcements

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State Tax Rate Change Announcements: MN, OH, WV, ND & NM
5/2/2008

Minnesota --Sales and Use Tax: Local Transit Improvement Taxes Discussed

A Minnesota Department of Revenue release discusses the new local sales and use tax and vehicle excise tax for transit improvements that will be imposed in Anoka, Dakota, Hennepin, Ramsey, and Washington counties (the transit tax area) beginning July 1, 2008. The transit improvement sales and use tax rate is 0.25%, and the vehicle excise tax imposed on vehicle sales in lieu of the transit improvement sales tax is $20 per vehicle sale. The taxes are administered by the Department and reported at the same time state sales and use taxes are reported. The adoption of the taxes was previously reported.
The tax should be charged to customers from inside or outside the transit tax area who pick up items in the area for business or personal use, even if the items are taken out of the transit tax area. The tax should also be charged for taxable services performed in the transit tax area. However, the tax should not be charged on sales of taxable items that a retailer delivers outside the transit tax area using the retailer's vehicle, U.S. mail, or parcel post.
Transitional Provisions
The transit improvement tax does not apply to sales of tangible items for which there is a contract in force before July 1, 2008, if the items are delivered before July 31, 2008. The tax is also inapplicable to services provided through July 31, 2008, if there is a contract for the service in effect before July 1, 2008, if payment is made before that date. The transit improvement tax does not apply to lease payments that include periods before July 1, 2008, but it applies to lease payments beginning July 1, 2008, or later.
Construction contractors will claim an exemption on Form ST3, which will be revised and available on the Department's Web site in June 2008. Contractors will not need to apply for an ST8 exemption certificate, as previously required. The transit improvement sales and use tax does not apply to building materials for a lump-sum contract in force before July 1, 2008, if delivery is made before December 31, 2008.
Transit Improvement 0.25% Sales and Use Tax, Minnesota Department of Revenue, April 23, 2008
5/1/2008

Ohio --Sales and Use Tax: Local Tax Rate Changes Announced

Effective July 1, 2008, the sales and use tax rate in Summit County, Ohio is increased to 6.50%. The rate in Union County is increased to 6.75%.
The City of Dublin has become a member of the Central Ohio Transit Authority (COTA). Effective July 1, 2008, the COTA permissive sales and use tax will be imposed in the portions of Dublin located in Delaware and Union counties. As a result, the rates in both of those areas will increase to 7.25%. The rate in the portion of Dublin located in Franklin County will not change, as the area is already subject to the COTA tax.
Sales and Use Tax Rate Change Notice, Ohio Department of Taxation, May 2008
4/30/2008

West Virginia --Sales and Use Tax: SST Taxability Matrix Updated

West Virginia has updated its Streamlined Sales and Use Tax (SST) taxability matrix to reflect sales and use tax rate changes that take effect July 1, 2008, for sales of certain food and food ingredients intended for human consumption, and to reflect changes in the taxation of health care products for animals. The revised taxability matrix is available on the West Virginia State Tax Department's Web site at http://www.state.wv.us/taxrev/sst/matrix0408.pdf.
Food and Food Ingredients
The updated matrix reflects that effective July 1, 2008, the sales and use tax rate decreases from 4% to 3% for food and food ingredients, candy, and dietary supplements. The sales and use tax rate remains at 6% for food sold through vending machines, soft drinks, food sold in a heated state, food sold with eating utensils provided by the seller, and prepared food.
The rate reduction from 4% to 3% also applies to sales of the following prepared food options that are excluded from the definition of prepared food:
-- food sold without eating utensils provided by a seller whose primary North American Industry Classification System (NAICS) classification falls within Sector 311 (Food Manufacturing), except Subsector 3118 (Bakeries and Tortilla Manufacturing);
-- food sold without eating utensils provided by the seller in an unheated state by weight or volume as a single item; and
-- bakery items sold without eating utensils provided by the seller.
The decrease in the rate to 3% is part of a gradual reduction of the tax rate for food. Details of this decrease and the gradual reduction were previously reported.
Health Care Products for Animals
The revised matrix reflects that the following health care products for animals are taxable:
-- drugs for animal use with a prescription;
-- insulin for animal use without a prescription;
-- insulin for animal use with a prescription;
-- medical oxygen for animal use with a prescription; and
-- over-the-counter drugs for animal use with a prescription.
Taxability Matrix, West Virginia State Tax Department, April 2008
4/29/2008

North Dakota --Sales and Use Tax: Local Tax Changes Announced

The following local North Dakota sales and use tax changes are effective July 1, 2008.
The city of Cooperstown increases its sales, use, and gross receipts tax from 1% to 1.5%, and increases its maximum tax/refund cap from $25 to $50 per transaction.
The city of Drake increases its sales, use, and gross receipts tax from 1% to 2%.
The city of Glenburn imposes a sales, use, and gross receipts tax of 1%. Glenburn's ordinance includes a maximum tax/refund cap of $25 per transaction and provides for a contractor's limited exemption when a contractor's certificate is used. The ordinance does not provide for permit holder compensation.
Letter to North Dakota Sales, Use and Gross Receipts Tax Permit Holders, North Dakota Office of State Tax Commissioner, April 24, 2008

West Virginia --Sales and Use Tax: Food Tax Rate, Electronic Filing, Prepaid Wireless Changes Made

The West Virginia State Tax Department reminds taxpayers of upcoming changes regarding the sales and use tax rate for sales of food, the electronic filing of sales and use tax returns, and the taxation of prepaid wireless calling services.
Food Tax Rate Reduction
Effective July 1, 2008, the sales and use tax rate for the sale or use of food and food ingredients intended for human consumption decreases from 4% to 3%. However, the sales and use tax rate remains at 6% with respect to prepared food, food sold through vending machines, soft drinks, food sold in a heated state, and food sold with eating utensils provided by the seller.
The reduction to 3% is part of a phase-down of the tax rate on food. The original 6% tax rate for food was reduced to 5% on January 1, 2006, and was further reduced to 4% on July 1, 2007.
Electronic Filing
Beginning May 15, 2008, taxpayers who file a West Virginia Consumer's Sales and Service Tax Return (Form WV/CST-200) electronically must file through https://mytaxes.wvtax.gov. Paper copies of the form may be printed from http://www.state.wv.us/taxrev/uploads/cst200s.pdf.
Prepaid Wireless Calling Services
Beginning July 1, 2008, prepaid wireless calling services are subject to consumers sales and use tax at a rate of 6%. The change in the law is due to recently enacted legislation that includes the furnishing of prepaid wireless calling services for consideration in the definition of "sale" for purposes of West Virginia consumers' sales and service tax.
A "prepaid wireless calling service" is a telecommunications service that provides the right to use mobile wireless services and other non telecommunications services (including the download of digital products delivered electronically) that are paid for in advance and sold in predetermined dollars or units that decline with use in a known amount. Examples of such services include wireless airtime cards, prepaid wireless ring tone download cards, prepaid cellular phone cards, and prepaid cellular rechargeable minute cards.
Prepaid wireless calling services do not include prepaid land line phone cards or prepaid land line rechargeable minute cards. Also not included (if not sold for use with or by delivery through a mobile wireless services) are prepaid music download cards, prepaid game download cards, prepaid internet access cards, or gift cards.
Press Releases, West Virginia State Tax Department, April 25, 2008
4/28/2008

New Mexico --Sales and Use Tax: Sierra County Voters Approve Tax Increase to Fund Spaceport

In a special election, the voters of Sierra County, New Mexico, approved a 0.25% gross receipts tax increase to fund Spaceport America, effective January 1, 2009.
Press Release, New Mexico Governor Bill Richardson, April 22, 2008; E-mail, Sierra County Treasurer, April 25, 2008
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