Federal taxes are not the only tax liabilities impacted by COVID-19. Various state and local taxing jurisdictions are also grappling with how to balance the desire to help taxpayers navigate these difficult times with their need for tax revenue to continue offering the services and resources critical to citizens. While the federal government can spend more money than they take in, state governments do not have that luxury. Consequently, the tax relief being offered varies greatly by jurisdiction and by tax type. This blog post addresses how the State of Texas has responded to this crisis and what taxpayers can expect going forward. Many of the items discussed below are also discussed at the Comptroller’s website, where there is a dedicated COVID-19 resources page.
Starting in 2020, the Comptroller is changing its policy relating to the taxability of medical billing services. While insurance services have always been subject to Texas sales tax, the Comptroller previously took the position that medical billing services happen before any insurance claims are submitted, and therefore are not taxable insurance services. Effective January 1, 2020, the Comptroller will be taking the opposite position – preparation of a claim is an inherent part of the insurance claim process and medical billing services to prepare a medical insurance claim are taxable insurance services.
The 86th Texas Legislature did not pass many tax-related bills, but those that passed could have significant consequences.
The notion of starting work on a project without a license may seem unthinkable. But, in their rush to win bids and start work, many contractors have run afoul of licensing issues. Here’s how it can happen.
On May 1, 2018, Texas will begin a two-month tax amnesty program. If you have any potential exposure for any Texas back taxes, LGT would welcome the opportunity to discuss the program with you to determine whether it would be worth pursuing. Additional information about the program is below.
Joint ventures offer several potential advantages. They enable smaller construction companies to take on large projects while dividing the contractual and financial risks of such projects. Further, those projects could be in geographic locations that you otherwise would not be able to access. A joint venture can also enable you to increase your bonding capacity, provide an opportunity to learn about more sophisticated technologies, and access other contractors’ relationships.
Many business owners know that when they acquire another business entity that they will be assuming any potential tax liabilities of the acquired business, known as, “successor liability.” But Texas laws also allow for successor liability even if you purchase some — but not all — of another company’s assets. It is therefore important to make sure that you are aware of these laws, and how to avoid the most common pitfalls.
Not-for-profit organizations (“NFPs”) may not realize that operating outside their home state may create regulatory and tax compliance responsibilities. States have a vested interest in making sure that NFPs are operating for their intended charitable purposes, and are not fraudulently soliciting its residents for donations.