72 and Sunny

[00:00:08] Speaker A: Well, hello and welcome to Taxing poetic. I'm your host, Jenny. [00:00:12] Speaker B: And I'm Tim. [00:00:14] Speaker A: And today is one of our regional series. We're going to talk about our west coast friends, california, Hawaii, Oregon, Washington, and Alaska. And we are calling this series 72 and sunny. [00:00:29] Speaker B: Is that really accurate, 72 and sunny? I mean, I'm originally from Washington, and we're recording in July. We're usually wearing sweatshirts this time of year. [00:00:38] Speaker A: Yeah, I think Washington not so much with the sunny. And I was wondering, JB, when you named this episode, if you really thought that Alaska and Hawaii were next to each other, like how they have on the weather maps on TV, because it. [00:00:55] Speaker B: Could not be further than the truth. [00:00:57] Speaker C: I just stopped thinking about it after Hawaii. 72 and sunny. That sounds good. [00:01:02] Speaker A: That sounds fantastic. Sounds great. [00:01:04] Speaker C: Sun and Oregon. [00:01:05] Speaker A: Yeah. Alaska, maybe Hawaii. Yeah. And Washington. [00:01:09] Speaker B: Maybe we should call it 72 and moldy. [00:01:14] Speaker A: I love it. I know. [00:01:15] Speaker B: Anyways yeah. [00:01:16] Speaker A: Gross. Anyway. Okay, so it's not so sunny in Alaska or Washington, but California, Hawaii, Oregon. [00:01:23] Speaker B: Fantastic. [00:01:24] Speaker A: Yeah. [00:01:24] Speaker B: Right on. [00:01:25] Speaker A: Anyway, yeah, alaska, they have some decent sales tax news because there is no state sales tax. Right? [00:01:32] Speaker B: Absolutely. One of the original no sales tax states except for at the locals. [00:01:37] Speaker A: Exactly. [00:01:38] Speaker B: So it's a little distinctive. Makes remote seller laws into Alaska. An awful lot of fun with having to do the filings every single month there with all the individual little tribal communities and little cities and stuff like that, they have to report tax in. So you would think it would be easy because there'd be no state sales tax, but throwing the local in is definitely a mess. [00:01:56] Speaker A: Yes, it's a little difficult. [00:01:58] Speaker B: Absolutely. [00:01:59] Speaker A: We will get into that for sure. [00:02:00] Speaker C: Well, before we do anything, we actually got our first email from a user called taxi Mctaxface. [00:02:07] Speaker B: Are you serious? Yeah, absolutely. Which is great. [00:02:10] Speaker C: Thank you. We asked for thank you, taxi. We asked for content. It's a weird email, but it's an email nonetheless. Okay. So I'm just going to read it verbatim. I'm not making any of this up. Okay, so I have a question. Honestly, I think you guys are making this stuff up. My grandmother was having a party for her pet ferret. She asked for ten gallons of lemonade. I went through the drive through of my local QuickServe a week ago, bought ten gallons of lemonade and some snacks, and I paid tax on all of it. Then Gammy calls me back after I left, and she needed ten more gallons of lemonade. [00:02:42] Speaker B: What are you doing with 20 gallons of lemonade? She says, don't ask. That's a heck of a party. [00:02:47] Speaker A: I have so many questions. [00:02:48] Speaker C: There's so many gallons of lemonade. And why would you buy them at dress? But it doesn't matter. Ten gallons of lemonade a fairy. I go into a grocery store and buy them, and they do not charge me sales tax like what gives? This sounds like complete. And you guys are making these rules up as you go. [00:03:04] Speaker B: Whoa, hey, tone down the language. [00:03:06] Speaker C: No, I'm going to have to that's. [00:03:08] Speaker B: A little aggressive beep. [00:03:09] Speaker C: Our first email okay. [00:03:11] Speaker A: Our first email was going to be an angry person with ferrets. I know. [00:03:15] Speaker C: Taxing MC tax days. Okay, so I guess the question here is why is their sales tax in a drive through and not at a grocery store? [00:03:25] Speaker B: Oh, Jenny, can I take it? [00:03:27] Speaker A: Tim, that is totally you. Yeah, I don't know. [00:03:31] Speaker C: Where are they? [00:03:32] Speaker B: If gammy's living in California okay, which I'm guessing this individual would probably be calling about, more than likely they're talking about the 80 80 rule in California. And California has this really weird thing where basically if greater than 80% of your sales in a food establishment are considered to be taxable, then you should tax 100% of your sales. So if you're buying stuff from if you go into an arby's or if you go into a sonic and you want to get taxi here, if you wanted to get some gallons of something from gallons of lemonade from the store, well, 80% of the sales and transactions that occur at that location are actually considered to be taxable. So they would tax you excuse me, on the gallons themselves. But if you're buying the gallons of tea or gallons of lemonade, whatever, at a grocery store, groceries in California are typically exempt, and the majority of the sales in a grocery store would be exempt, so you would not pay tax on it. It's just something weird that California has that you have the option, if you want, as a food establishment, to track these sales separately, and you can tax them and non tax them as long as you justify the taxation of it. It's a really convoluted process. But that's why most food establishments go with the 80 80 rule, and they say, hey, we're just going to tax everything, and it makes our life really easy. [00:04:52] Speaker A: Why is it called 80 80? [00:04:54] Speaker B: It's 80% of your sales. I mean, I don't know why they call it the 80 80 rule. Yeah. I was always like, well, should it be 80 20? [00:05:01] Speaker A: Yeah, that's what I'm thinking. Like, it's 80 20. So where does the 20 come in? [00:05:05] Speaker B: They call it the 80 80 rule. When you look it up, it's called the 80 80 rule. [00:05:08] Speaker C: If there's one thing I know about taxes, it's that the numbers aren't important. [00:05:12] Speaker B: And also the naming conventions typically don't make any sense either. [00:05:15] Speaker A: Yeah, that makes no sense. [00:05:16] Speaker B: You have a gross receipts tax, but there's a ton of deductions. Well, it's not really gross receipts then, is it? Yeah, right. [00:05:21] Speaker A: So, okay, aggressive gammy, ferret caller. What we're saying here is we don't make the laws, okay? We just have to abide by them. [00:05:31] Speaker B: Yeah. Basically. [00:05:33] Speaker A: And what, we're trying to keep you out of prison, right? [00:05:35] Speaker B: Yeah. Hey, and that's the famous joke. What do you call a creative accountant? A felon. [00:05:41] Speaker A: Right. Yeah. That's all we're trying to do is keep you aware of the laws. [00:05:47] Speaker B: That's exactly. So, yeah, don't shoot the messengers. [00:05:50] Speaker A: Yeah, exactly. Shoot Tim. That's fine. [00:05:53] Speaker B: So you got any nerdy news? [00:05:54] Speaker A: Do I have nerdy news? [00:05:55] Speaker B: Oh, and thanks, Taxi MC Taxpays for writing in, aside from the awesome name the username, which is going to be great, hopefully we'll get to hear from you more or hear from some other users out there on interesting questions. And if you are going to ask a question, make sure you tell us where you're actually writing from. That would be kind of a good point. [00:06:12] Speaker C: And that's on you, Taxi Mcdax. [00:06:13] Speaker B: That is exactly on you. We're just inferring, so hopefully you're in California. [00:06:17] Speaker A: But yes, exactly. [00:06:18] Speaker B: Not inferreding. We're inferring. [00:06:24] Speaker C: Taxi MCX to our list of people we will apologize. [00:06:27] Speaker A: I know. Well again. It is on Taxi Mcaxe. [00:06:29] Speaker B: Well, he or her was awfully aggressive in their email. [00:06:31] Speaker A: They should apologize. That's the famous thing that we always say about sales tax, depends on the state. [00:06:36] Speaker B: That's exactly it. [00:06:37] Speaker A: If we don't know where you're calling from, then if you're in Montana, it doesn't matter. [00:06:40] Speaker B: We're taking a guess. [00:06:41] Speaker A: Yeah. [00:06:42] Speaker B: Congratulations. All right, so on to nerdy news. What do you got? [00:06:45] Speaker A: So our next segment is nerdy news. From time to time in these segments, we'll offer you some current legislative updates. And yeah, for 72 and Sunny, we've got some. Our first one is for California, so California love. Awesome. I'll try not to get sued or just offer me a record contract. It's fine. Okay. [00:07:05] Speaker B: If anybody has any spare earplugs in. [00:07:07] Speaker A: The audience, please send your I know. Turn your earphones off. I had to sing that. [00:07:13] Speaker B: I know. You did it's. [00:07:14] Speaker C: Given I know. [00:07:14] Speaker A: There aren't any songs about Oregon. I don't think so. Okay. So for California, this is the latest Nerdy news I have that the California Court of Appeals has ruled that the provision under the Keep Groceries Affordable Act. [00:07:27] Speaker B: Of 2018 got to love the titles of these things. [00:07:30] Speaker A: I know. Awesome. I mean, I'm all about keeping groceries affordable. I've got teenagers. So anyway, it penalized charter cities for imposing local soda taxes, and they ruled as unconstitutional. So Tim Tax poetic about that for a moment. [00:07:45] Speaker B: Yeah. So basically, if you're looking at digesting this so there was a provision, I guess, that was actually put in by the state that was the Keep Groceries Affordable Act that eliminated sin taxes on sodas. Right. So basically had to get rid of there used to be specific taxes. Actually, there still are. Like city of Chicago has one. I think San Francisco has one. There's a number of different cities that actually penalize, quote unquote, individuals for, or should I say people for actually consuming sugary beverages. And what this basically said is that the court said that this grocery or keep Groceries Affordable Act was unconstitutional for penalizing cities for having those taxes. So it's kind of like a double negative. So it's basically someone brought up the case and said, hey, we're going to go ahead and say that you cannot penalize a city for having a syntax. And so the cities are technically allowed to have the syntax, and they're going to keep those syntaxes in place. [00:08:44] Speaker A: Got it. [00:08:45] Speaker B: So it's not really saving anybody any money. The Keep Groceries Affordable Act was going to try to save people money and get rid of these syntaxes. But guess what? Not so much. [00:08:54] Speaker A: Not so much. [00:08:56] Speaker B: Tim GPT. [00:08:57] Speaker A: Yeah, I know. Tim GPT. Yes, I know. Our own version of Chat GPT right here. There was a great Parks and Recreation episode about this, too, about soda taxes. Really fun. Yeah, you have to check it out. [00:09:08] Speaker B: I'll have to check it out. [00:09:08] Speaker A: Yeah. It's a great show. [00:09:09] Speaker B: Love it. [00:09:10] Speaker A: Okay, so next, let's go to Oregon again. I don't have a song for Oregon to sing. [00:09:14] Speaker B: But why is Oregon even in here? They don't even have taxes. They don't even have sales tax. I mean, they have taxes, folks. I mean, sorry, that was a lie. They do have tax. They have property tax. They have a gross receipts tax. [00:09:27] Speaker A: Right. But anyways, they're one of the nomads, right? [00:09:29] Speaker B: That's right. They're one of the nomads. Well, the o. [00:09:31] Speaker A: The reason why Oregon is in here, Tim, is that local voters in Josephine County voted down a proposal for a 3% seasonal sales tax. [00:09:42] Speaker B: Boy, that would have been fun to implement. Oh, my gosh, what was the period on that? What is that? April through November? [00:09:47] Speaker A: Yeah, April through November. [00:09:49] Speaker B: Taking care of those people. Wanting to go to sunny Oregon beaches. [00:09:53] Speaker A: I know, nice where it's sunny in 72. [00:09:55] Speaker B: You ever vacationed in Oregon? [00:09:56] Speaker A: I've never been to Oregon, actually. [00:09:57] Speaker B: I can tell you I vacationed there as a kid, and I remember having photos. My family took me in Cannon Beach, Oregon in August, and we were in long sleeve shirts and pants and rain gear because it was pouring down rain. It was like, 67 degrees. [00:10:11] Speaker A: That sounds amazing. [00:10:14] Speaker B: Beachgoers aren't real big in the Northwest. It's kind of interesting. But I will tell you, the beaches are beautiful there. [00:10:19] Speaker C: That's where they film the Goonies. [00:10:20] Speaker B: That's it, man. Astoria, Oregon. [00:10:22] Speaker A: Oh, no way. [00:10:23] Speaker B: Yeah. The Goondocks. [00:10:24] Speaker A: I didn't know that. [00:10:24] Speaker B: Absolutely. Oh, I used to go fishing out of Astoria. We used to go catch sturgeon on the Columbia River. [00:10:29] Speaker A: You were probably in the Goonies. [00:10:30] Speaker B: I am a goonie. [00:10:31] Speaker C: Kind of catching slack for this, but it doesn't hold up. I watched it recently. I didn't like it. [00:10:36] Speaker B: Are you kidding me? [00:10:37] Speaker C: Just keep it in your childhood. [00:10:40] Speaker B: We have an open position for a new producer. Someone willing to come and take JB's Spot would be absolutely fantastic. No, there are dude, I watch that every time. It's on TNT. And I love it. [00:10:50] Speaker A: There are several movies that I loved as a kid that I've tried to show my own kids and I've rewatched them as an adult. I'm like, yeah, these are terrible. [00:10:57] Speaker C: The never ending the never ending story. [00:10:58] Speaker B: Exactly. [00:10:59] Speaker C: Leave it in your couldn't. [00:11:02] Speaker B: I will agree with that. [00:11:03] Speaker C: Somebody told me that and I didn't listen, and then I was like, why have I done this? [00:11:07] Speaker A: We'll have to discuss later because yeah, that was a big wow. Yeah, that was terrible. [00:11:11] Speaker B: Oh, my God. [00:11:12] Speaker A: Back on tap, Oregon. Okay, so Tim, moral of the story is they could have had a sales tax. Now if they had passed it, we would have had to file just one local jurisdiction return, right? [00:11:22] Speaker B: That's basically it. [00:11:23] Speaker A: Yeah. Which would have kind of sucked. [00:11:25] Speaker B: Would have been a lot of fun. And you only calculate it and collect it for effectively seven months out of the year, which is awesome. [00:11:30] Speaker A: Yeah. So. Thank you. Oregon voters. [00:11:32] Speaker B: Thank you, Josephine County. [00:11:33] Speaker A: I know, that was really nice of you for voting that down. [00:11:35] Speaker B: Awesome. [00:11:35] Speaker A: Sorry you don't have the extra revenue, though. You'll get it somewhere else. Hey, maybe with a soda tax. How about that? [00:11:41] Speaker B: Okay, don't give many. [00:11:43] Speaker A: Okay, so all right, next one. Hawaii. Oh, it's my dream to go there. Okay. So I can't pronounce. Okay. Maui, Hawaii. Kauai. Is that how you say that? [00:11:52] Speaker B: So with the apostrophes, you're supposed to put an emphasis on the second syllable. Supposed to be Hawaii and Kauai and stuff like that. [00:12:00] Speaker A: Oh, my God, you're so annoying. [00:12:01] Speaker B: I'm just know for our fellow Hawaiian listeners, I made an attempt, even though my pronunciation was probably terrible, but anyways. [00:12:08] Speaker A: Obviously I butchered it. So there we go. Thanks, world traveler. Okay, so those counties that Tim just mentioned collaborated to streamline the payment process for the Tat tax. The tat tax. Transient accommodations tax. And they have a new online payment portal, which is huge. [00:12:26] Speaker B: Wow, that's pretty awesome. [00:12:27] Speaker A: Yeah. [00:12:28] Speaker B: Hey, way to be advanced. Hawai. That's fantastic. Even though, in all honesty, I've never even looked into the transient accommodations tax. But obviously it's going to be a big deal for our hoteliers and other folks that own resort establishments in Hawaii. So that'd be pretty interesting for them to take a look at that. [00:12:44] Speaker A: Did you put the right emphasis on hoteliers? It sounds now? Yeah. [00:12:50] Speaker B: My vocabulary is going to be under complete scrutiny every single time that we do this. [00:12:54] Speaker A: Just making sure. [00:12:55] Speaker B: You should look up the name of the state fish for Hawaii. It is amazing. It is. Wow. Triple word score. [00:13:05] Speaker C: I don't know why I know that. [00:13:07] Speaker B: To JV, but yeah. [00:13:08] Speaker A: Mela Kamiki maka no. Can I start singing that? [00:13:13] Speaker B: Please don't, please don't. [00:13:14] Speaker A: Okay. Damn it. [00:13:16] Speaker B: Okay, so all right, let's wrap this up. Give me one more state. Give me one more. [00:13:20] Speaker A: We have two more. No, don't rush me along. Come on. This is our regional series. We need to discuss every state. We only have two more. Just relax. Okay, so, Alaska on April 16, governor Mike Dunleavy said he is prepared to introduce the statewide sales tax as part of a long term budget plan for the state. Here we are just talking about, oh, Alaska doesn't have a state sales tax. [00:13:42] Speaker B: Neither does Oregon, and now both of them are trying to implement it. [00:13:44] Speaker A: I know. [00:13:45] Speaker B: Well, awesome. [00:13:46] Speaker A: Not really. I mean, a huge surprise revenue, right? [00:13:49] Speaker B: There you go. [00:13:49] Speaker A: Yeah. [00:13:50] Speaker B: Easiest way to raise it. [00:13:51] Speaker A: So they have proposed a 2% statewide sales tax as part of a long term state fiscal plan. [00:14:00] Speaker C: Is there a benefit to not having a sales? Why do the nomad states exist? [00:14:05] Speaker B: In all honesty, most of the states, even the nomad states today, have some form of sales tax or what we call a transaction based. Hampshire has a telecommunications based transaction tax. They have some other local like type taxes. Delaware has the gross receipts. Right? We all file the gross receipts on an annualized basis or a quarterly basis. In Delaware actually even have monthly filing requirements. I think for some of they do. [00:14:29] Speaker A: Wholesalers. [00:14:29] Speaker B: Yeah, wholesalers. But I don't know historically what their position was. I mean, they all had some form of taxation, higher income taxes, higher property taxes. But now they're starting to see, much like in Alaska. Oregon. That transaction taxes do generate a ton of money. I think that you'll eventually see these nomad states go away. [00:14:52] Speaker A: I agree. [00:14:53] Speaker B: Yep. [00:14:53] Speaker A: And like you said, we're getting a step closer there in Alaska. [00:14:56] Speaker B: There you go. [00:14:57] Speaker A: All right. Washington. The Washington excise tax advisory number 3191-2022, released at the end of the year last year, provides clarification and multiple examples on the treatment of rewards programs and the taxability of any associated, quote unquote, freebies. [00:15:18] Speaker B: So if you're talking about a freebie, what is that alluding to? Jenny? What would we be talking about with giveaways? [00:15:23] Speaker A: Yeah, like when companies want to give away items to market. [00:15:27] Speaker B: But what type of tax is that? [00:15:28] Speaker A: Oh, transaction tax. [00:15:30] Speaker B: Use tax. [00:15:31] Speaker A: Oh, use tax. I'm sorry. [00:15:33] Speaker B: Totally. Okay. But no, that's what they're trying to clarify. Right. [00:15:38] Speaker A: I got it. [00:15:38] Speaker B: Okay. [00:15:38] Speaker A: Yeah. [00:15:39] Speaker B: We used to have a big deal. There used to always be, like, a really big conversation in the quick service restaurant world around kids meals, toys right, right. And the fact that they would give away kids meals, toys, and whether the kid meal, like the toy itself, was included in the cost basis of the actual menu item, or if there should be a separate use tax that was paid on that. A lot of states would hammer quick service restaurants on that whole conceptual idea many years ago, but that's all been gone and basically kind of moved on. A lot of people made successful arguments that it was all part of the cost basis. But anyways, use tax and freebies and promo items is still a very big deal if you're a liquor distributor, right. And you're giving away T shirts and Koozies and neon lights and stuff like that to your distributors. Those distributors technically should be paying use tax on that stuff because there is a value on it. [00:16:33] Speaker A: I see where you're going with that. So with the freebies and the use tax, if you're taking it out of your inventory, it means you're not selling it and collecting the sales tax from a customer. [00:16:43] Speaker B: That's right. [00:16:43] Speaker A: So if I took a freebie, like a Koozie or whatever out of my inventory and gave it away to a customer for marketing purposes, that's why I have to pay the use tax on it. [00:16:52] Speaker B: And you typically would have to look to the imposition statute in a state. And when we talk about imposition statute, it's a state's right to impose a tax onto a company or a seller or a consumer. Okay. There's always a lot of questions on freebies and giveaways. Who is ultimately responsible? Is it the person who receives the free item, or is it the person who gives away the item? Well, the person who receives it doesn't really know what the cost of that item is. [00:17:17] Speaker A: Right. [00:17:17] Speaker B: So the imposition of the tax should actually be on the seller, the person who actually originally purchased it and then gave it away because they know what the cost basis is, and they should be the one who's actually responsible for remitting the use tax on it. [00:17:31] Speaker A: And traditionally, a sales and a use tax rate are usually the same. Right. [00:17:35] Speaker B: 100%. It used to be different. [00:17:37] Speaker A: Right. [00:17:37] Speaker B: You had some states that would have different use tax rates. Missouri is a famous one for that. They would have different use tax versus sales tax rates. That's all gone away. Most states now just have the same exact sales tax as use tax. Right. [00:17:49] Speaker A: Because it can be a violation. Right. Violation being of complete auto transit and the four prongs. [00:17:56] Speaker B: Isn't that uniform tax? [00:17:57] Speaker A: Uniform tax. Have there been some cases about that? [00:18:00] Speaker B: I think so. I mean, you could also look at it and say that people could make the argument that it's a different classification of tax so it wouldn't have to follow the uniformity rule and basically having to be a uniform tax as a sales tax because they're two separate buckets. But states caught so much flak for it being different and so confusing to actually abide by. Which is why I think you saw the movement away from those different tax rate bases. There still may be some jurisdictions out there. Honestly, I don't have all 10,000 plus jurisdictions memorized. Yeah, sorry. [00:18:31] Speaker A: That's ridiculous. But you could look them up if you needed. [00:18:36] Speaker B: 100%? Yes. I really don't think that there's any anymore. [00:18:40] Speaker A: Okay. [00:18:40] Speaker B: Yeah. [00:18:40] Speaker A: All right. Well, if you have questions about promos and freebies with your companies, just let us know. [00:18:46] Speaker B: So what about the Hawaii? What's so interesting about Hawai's tax regime, by the way. The get tax. [00:18:52] Speaker A: Oh, the get tax. Oh, yeah, the get lost tax. [00:18:56] Speaker B: Oh, great. I'm really going to offend some people. I know, but no, yeah, I'd love to get lost in Hawaii for a while. That'd be awesome. [00:19:03] Speaker A: I know. When are we going on location, right? I know. [00:19:06] Speaker B: JB general excise tax. That's why it's called the get, right? So you have the general excise tax, and it truly is more of a gross receipts base. And we talk about a gross receipts type tax. We're talking about a tax that is truly on the gross receipts of the actual transaction, the gross proceeds of a company for a given time period. And there's typically with gross receipts taxes, there's very limited deductions. Right. So Hawaii is a great case of that. There are very few deductions that are allowed from their tax. You can pass that tax on, and you can collect it from consumers. It is something that's completely allowed some other states, like, you know, saying, hey, you can't collect the business and occupations tax, which is their kind of excise tax, if you will, or part of their excise tax regime, which is their gross receipts tax. But Hawaii says, yeah, you can pass this on to a consumer, and you should collect it from them, or you can collect it from them, but there's very limited deductions. So you need to be very careful when you're doing work in Hawaii. Yes, that's the rule. They are audit happy, very audit happy. And just it's a interesting tax to abide by. That's what I'll say, to be polite. [00:20:15] Speaker A: Okay, there we go. So mahalo. Mahalo on that. [00:20:18] Speaker B: Mahalo. [00:20:19] Speaker A: Mahalo. We're going to take a quick break. [00:20:20] Speaker B: Awesome. [00:20:21] Speaker A: We'll be right back. [00:20:22] Speaker B: We'll be right back. [00:20:22] Speaker A: You know what's weird? Hi. We're back on taxing poetic, and we are ready for our next segment, which is, you know what's weird? [00:20:35] Speaker B: What's weird? [00:20:36] Speaker A: Besides you, obviously. All right, so we're going to cover each state here in our 72 and sunny series, which is some little tidbits of what's weird. And let's start off with Washington. We'll just start at the continental us. Upper left coast. So Washington has a litter tax. I know personally, I have my own client that pays a ton of litter, uh, because yeah, they produce beer and there's beer cans. [00:21:05] Speaker B: Yep. [00:21:05] Speaker A: So tell me a little bit about the litter tax. [00:21:08] Speaker B: Not that I'm all knowing, but from what I understand, washington imposes it on certain industries. It could basically be like retail food establishments, grocery stores. It can be manufacturers of certain types of products like cigarettes, beer. Beer. Anything that contributes per the state. Anything that actually contributes to litter within the state, they've decided to impose a litter tax. So whatever your gross receipts are, you take the gross receipts of your sales, multiply, it times this fractional percentage that they have. It's a very low percentage. But like you said, for a number of our clients, that number can be huge. It can be thousands of dollars. [00:21:55] Speaker A: Well, it's not just retail sales. It's also wholesale sales. [00:21:57] Speaker B: That's right, exactly. It's imposed on wholesalers. It's imposed on manufacturers. It can be imposed on retailers. Right. And they know other states have bag taxes. This is Washington's way of combating that, right? [00:22:10] Speaker A: Oh, yeah. Bag taxes. Well, real quick, that's like a plastic bag tax. [00:22:13] Speaker B: That's right. Save the dolphins, right? Yes. [00:22:15] Speaker A: They're important. [00:22:16] Speaker B: I mean, they are. [00:22:17] Speaker A: Yeah. Anyway. Tim. [00:22:22] Speaker B: Sorry. Flipper. [00:22:22] Speaker A: Yeah, sorry. Yep. We love our plastic bags. Just kidding. Okay, next date we're going to talk about Oregon. And speaking of animals, their cat. [00:22:33] Speaker B: Yeah, exactly. It's a corporate activity tax that they decided to impose. I think it was like two years ago that they came out and did it following Ohio and a couple of these other jurisdictions. [00:22:45] Speaker A: It was only two years ago. [00:22:47] Speaker B: Yeah, it was 2019. [00:22:49] Speaker A: Oh, really? [00:22:49] Speaker B: Yeah, and I think they implemented it in January of oh, I thought it. [00:22:53] Speaker A: Was older than that. [00:22:54] Speaker C: 2019 was four years ago. [00:22:56] Speaker A: Yeah. [00:22:57] Speaker C: Just so that everybody knows, we did not record this in 2021. [00:23:01] Speaker A: Tim does good at math. [00:23:02] Speaker B: Wow. [00:23:03] Speaker C: Has it really been four years hot in here. It's okay. [00:23:06] Speaker B: Holy smokes. [00:23:07] Speaker A: Did you get your CPA at the University of Samoa? [00:23:09] Speaker B: No, I did not. I swear to God. I am a licensed Georgia CPA. [00:23:13] Speaker C: So why is that cat? Why is that weird to corporate? [00:23:15] Speaker B: It's an OD way of imposing a tax. It's basically a gross receipts type tax on all corporations and corporate activity excuse me. Within the borders of Oregon. It's a lot like Ohio's commercial activities tax. There is some complexities it's kind of moonlight's excuse me. Is more of an income based tax. So you should consult your income tax provider, which Jenny and I are not. But it is quite an interesting tax regime that Oregon put in four years ago. Excuse me. Not so. Yes. [00:23:46] Speaker A: We have helped a couple clients, though, with the Oregon Cat. [00:23:48] Speaker B: Yes. [00:23:49] Speaker A: Just guiding them through guiding them through. [00:23:50] Speaker B: How to file it. And we have some great relationships with some firms up in Oregon. If you have any questions about it, these folks can definitely help you out. [00:23:58] Speaker A: Absolutely. Okay, our next weird segment here is for California. [00:24:03] Speaker B: Yeah. [00:24:04] Speaker A: Your favorite. So the manufacturing exemption, some changes or extensions? [00:24:10] Speaker B: Extensions. I mean, granted, it was supposed to expire. It was originally, I think, put in place from, like, 2017, 2018 through 2022, and they've now extended it to July 1 of 2030, which is seven years from now. Yes. Thank you. Seven years. It is quite an interesting manufacturing exemption, though, because it's only a partial exemption and it has a really OD rate. It's like 3.3175 or something like that. It's something really awkward. And you have to be very careful to look at the items that actually qualify underneath the exemption. Typically their items have to be items that have a useful life of greater than a year. They have to be directly used on the manufacturing machinery. It can't be like consumable items. It is definitely not one of the broader based manufacturing exemptions that we've seen. Still can afford some exemptions and opportunity for some of our clients, but very narrowly defined. Very I won't say difficult to qualify, but a little bit more difficult to navigate than most manufacturing exemptions. [00:25:18] Speaker A: So, yeah, if you're taking exemptions in California, what you're saying is check yourself before you wreck yourself. [00:25:24] Speaker B: Oh, my God. Yes, Jenny, that's exactly what I'm saying. [00:25:28] Speaker A: And that's a technical term. [00:25:29] Speaker B: Yeah. [00:25:30] Speaker A: Okay, good. All right. So. California. That was California. Alaska. I've got a couple for these with my research. So I did not know that Alaska is the only state that does not have a broad based personal income tax or a statewide sales tax. I think there are a number of states that have no state personal state income tax, but they also have sales taxes. [00:25:54] Speaker B: Yeah, like a know George's Hat and know Boots. You have Tennessee and Florida. They both do not have personal income taxes, but they do have large or should I say high, higher than normal sales tax rates. But, yeah, Alaska is kind of awkward that way. That's a good point. They do have a corporate based income tax. We spent some time debating that a little bit ago in our quirkiness of Alaska. But, yeah, you were right. It is the only state in the US. That does not have a personal income tax or a statewide sales tax. That is pretty awkward. [00:26:28] Speaker A: Yeah. And we touched on this earlier, just doing our little updates about the states, about how Alaska doesn't have a statewide sales tax we've already covered, but they do have local jurisdictions that have sales tax rates. And then even JB was giving us he's so smart now about sales tax, about remotes. He's all like, oh, remote sellers and physical presence and he doesn't even need us anymore. But, yeah, give us a little more about having economic and physical presence in the jurisdiction. Alaska. [00:27:00] Speaker B: Yeah. So you will trigger it's kind of interesting as a remote seller into Alaska, you can trigger the economic nexus base in Alaska by all of your sales within the state, but then you would have to register. Or you can go through the Alaska Remote Seller Commission, I believe is the name of the organization. I don't know. Don't hold me to that. It's something like that. But you basically go through this website and you file monthly based off of your sales to individual jurisdictions within Alaska. So once you trigger that economic nexus threshold, then you'll have to go in and you have to submit an online filing excuse me, each month. And if you're selling into Wasilla, if you're selling into Ketchikan or Sitka or any other or the North Pole or the North Pole. Believe it or not. Yep. You definitely know collection obligations within those. You know, JB, if you're selling ice up there in Alaska, you're going to definitely have to do some collections if ice is taxable. [00:27:58] Speaker A: And you're a dang good salesman if you can do that. [00:28:00] Speaker B: There you go, man. [00:28:01] Speaker C: Selling ice eskimos. [00:28:02] Speaker A: Yes. And so now on to the state that's right next to Alaska on the map when you look at the weather, hawaii. So hawai. What is weird is the get. So get. Tell us about that. [00:28:17] Speaker B: Just your general collection of the get is kind of awkward. I mean, you collect the tax from your consumer. If you're a company, you go in, you're collecting the four and a half percent. Great. But what happens is that Hawaii actually taxes you on your tax collections. So if you have $1,000 sale and you collected $45, then you would turn around and have to pay tax GE t would be calculated on the $1,045, which would mean you would owe like an additional $2 or something like that on top of what you had already collected from your customer. It's basically a privilege. It's a tax on the privilege of doing business within the state. That's how they state it in their form instructions, and they say, you're going to pay that a little bit of extra tax. [00:29:00] Speaker A: So sort of a BNO or not. [00:29:02] Speaker B: It's actually honestly, it's exactly like the. [00:29:04] Speaker A: BNO, but not a tax on tax. [00:29:07] Speaker B: It's not a tax on tax? No. You're allowed to collect the majority of the tax as kind of like a sales tax from a customer at four and a half percent, but you would still owe a fractional percentage above that as your cost of doing business. [00:29:20] Speaker A: I feel like that's the weirdest one because I still kind of don't get it. I don't get it. Oh, my gosh, I just got that. Oh, that's awesome. [00:29:27] Speaker B: Can we please take a break? [00:29:30] Speaker A: No, we must move on. I love it. [00:29:34] Speaker B: All right, and so time for our final segment, where we're going to actually grill the producer. I can't wait and see if JB has actually been awake this entire time. And folks, I can tell you he. [00:29:43] Speaker C: Has be there were some times when. [00:29:46] Speaker A: I only while Tim is talking, I assume. [00:29:49] Speaker B: Exactly. [00:29:50] Speaker C: What have we been doing? We'll see. [00:29:53] Speaker A: Do you have something for him? [00:29:54] Speaker B: Yeah, absolutely. Okay, so, JB, we mentioned that Washington has an interesting form of taxation and it's only on certain types of businesses. What was that form of taxation and what was it on? No, I don't even think I know. [00:30:12] Speaker C: Over one. We just talked about that. [00:30:19] Speaker A: I know. He kind of I thought he was reaching wave. [00:30:21] Speaker C: I thought it was just further back. [00:30:22] Speaker B: Exactly. And this isn't stump the schwammy, man. I'm trying to keep this simple. Throw a big donut on the board for JV for today. [00:30:29] Speaker A: Okay. [00:30:29] Speaker B: We're going to give him one more I got one. [00:30:31] Speaker A: Okay, so, JB, when we were talking about California, is it the 80 rule, the 80 20 rule or the 80 80 rule? [00:30:41] Speaker C: I got a multiple choice. I know it's the 80 80 rule because I also don't get why it. [00:30:47] Speaker B: Is called the 80. [00:30:48] Speaker A: That's my next question. Can you please explain that to me? [00:30:50] Speaker C: Yeah, I don't think anybody can. [00:30:52] Speaker A: I know that makes no sense. [00:30:54] Speaker B: I'm going to help you guys out. I just looked it up. Here it is for everybody out there listening, the 80 80 rule applies when more than 80% of your sales are food and more than 80% of the food that you sell is taxable. [00:31:07] Speaker A: So there is something to the other 80. They didn't just make that. [00:31:11] Speaker B: Did I say that? [00:31:12] Speaker A: They made good to know earlier. [00:31:14] Speaker B: Well, hello. I didn't just make it up. [00:31:16] Speaker A: I know. Well, I'm just saying otherwise. I've just been sitting here spinning all day. [00:31:20] Speaker B: Well, hey, you know what? We can go back and rerecord it, and I'll have to make you listen to it all over it. [00:31:25] Speaker A: No way. I don't want to listen to you anymore. [00:31:26] Speaker B: I love it. [00:31:27] Speaker A: Yeah. Okay. Yes. So, yes. Time to wrap up. Thank you for listening to our regional series 72 and Sunny. [00:31:34] Speaker B: Even though not everybody's in 72 and not everybody's Sunny. [00:31:37] Speaker A: I know, but it's okay. It's okay. That's all right. [00:31:40] Speaker C: Before we ask people to subscribe, we do have to apologize to a couple of groups. Taxi MC tax face. Just I don't know. I feel like it was our first time. Somebody wrote in, we got somebody, and. [00:31:49] Speaker B: We don't want to beat them up. [00:31:50] Speaker C: But I don't know. Okay, just let's apologize. [00:31:52] Speaker A: Taxi. [00:31:53] Speaker C: Taxpayer. [00:31:53] Speaker A: Sorry. Taxi. [00:31:54] Speaker C: Whoever owns the rights to California Love. [00:31:57] Speaker A: Oh, yeah. [00:31:57] Speaker C: Sorry. [00:31:58] Speaker B: Apologize for that. [00:32:00] Speaker C: The person who named the Keep Groceries Affordable Act, we kind of ripped on that person. The Goonies. The Hawaiian language. Dolphins and maps. [00:32:11] Speaker B: Oh, man. Yeah, dolphins. [00:32:13] Speaker A: Dolphins. Poor dolphins. [00:32:14] Speaker C: So you guys have to say sorry. [00:32:15] Speaker B: That's the point. Sean Williams. Scott you know, we got to apologize for him. Like a big part of the goonies. There you go. [00:32:21] Speaker A: What's Stifler? [00:32:23] Speaker B: Where's Sean Williams? [00:32:24] Speaker A: No, that's not Sean Williams, Scott. Sean Aston. [00:32:26] Speaker B: Sean. [00:32:26] Speaker C: Now we're going to have to apologize to Sean Aston. Rudy, I am very sorry. [00:32:30] Speaker A: Pop culture. [00:32:31] Speaker B: You know what? [00:32:32] Speaker A: I was like, what stifler was in The Goonies? [00:32:34] Speaker C: We're supposed to be apologizing, and we keep adding to the list of people we need to apologize to. [00:32:39] Speaker B: Oh, my God. I love it. People who watch Sean astin our fault totally, totally diminished your role in Lord of the Rings. [00:32:46] Speaker A: After this, you're going to have to listen to a pop culture podcast to get up to speed. [00:32:50] Speaker B: JB, that'll be grill the producer, aka me on that so awesome. Thank you all very much. Please like and subscribe and email us in with any questions that you have. [00:33:00] Speaker A: Yes. And just a reminder. You don't have to listen to these all in order. You can mix them up and you don't even have to listen to all of them. But it would make me really happy. [00:33:09] Speaker B: So exciting to jump from, like, episode eight to episode two to episode three. [00:33:13] Speaker A: Totally. And it would only hurt my feelings a little bit if you didn't listen to all of them, but we would love it if you would listen to all of our episodes. Love it. Super funny. And yeah, you can subscribe what? Follow us on what? LinkedIn. What else we got? [00:33:27] Speaker B: Instagram. [00:33:27] Speaker A: Instagram? Yep. So thanks for listening today. [00:33:30] Speaker B: Thanks a lot, y'all. Bye.