Items free of Sales Tax...read

In 2012, Texas shoppers get a break from state and local sales taxes on Aug. 17, 18 and 19 — the state's annual tax holiday. Lay-away plans can be used again this year to take advantage of the sales tax holiday. 

As in previous years, the law exempts most clothing, footwear, school supplies and backpacks priced under $100 from sales and use taxes, which could save shoppers about $8 on every $100 they spend.Backpacks under $100 and used by elementary and secondary students are exempt. A backpack is a pack with straps one wears on the back. The exemption during the sales tax holiday includes backpacks with wheels, provided they can also be worn on the back like a traditional backpack, and messenger bags. 

The exemption does not include items that are reasonably defined as luggage, briefcases, athletic/duffle/gym bags, computer bags, purses or framed backpacks. Ten or fewer backpacks can be purchased tax-free at one time without providing an exemption certificate to the seller.No exemption certificate is required - with one exception. 

If the purchaser is buying the supplies under a business account, the retailer must obtain an exemption certificate from the purchaser certifying that the items are purchased for use by an elementary or secondary school student. “Under a business account” means the purchaser is using a business credit card or business check rather than a personal credit card or personal check; being billed under a business account maintained at the retailer; or is using a business membership at a retailer that is membership based.

A word of caution: If you sell items that do not qualify for the exemption, you may not advertise or promise that you will pay your customers' sales tax. You are prohibited from advertising that you will not collect sales tax on items that do not qualify, but you may advertise that tax is included in the sales price of the taxable items that you sell.

Source: http://www.window.state.tx.us/taxinfo/taxpubs/tx98_490/tx98_490.html



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IRS revised rules is making more flexible terms to its Offer-in-Compromise Program so that  some financially distressed taxpayers can clear up their tax problems quicker.

What is an offer-in-compromise (OIC)?

An OIC is an agreement between a taxpayer and the IRS that settles the taxpayer’s tax liabilities for less than the full amount owed. The IRS looks at the taxpayer’s income and assets to determine the reasonable collection potential.

This initiative focuses on the financial analysis used to determine which taxpayers qualify for an OIC.

Here are some of the changes:

• Reducing the number of years in the calculation for a taxpayer’s future income. 
• Reducing the time it will take to paid in full the amount due. 
• Allowing taxpayers to repay their student loans Minimum payments on college student loans guaranteed by the federal government.
• Allowing taxpayers to pay state and local delinquent taxes. 
• Expanding the Allowable Living Expense allowance for basic necessities for citizens in similar geographic areas. 

More information on the “Fresh Start” initiative can be found at IRS.gov. or from your CPA professional of choice. 

(Source: http://www.IRS.gov)

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