Jan 11, 2016
From KPMG TaxWatch
The Maryland Tax Court recently flushed out a taxpayer’s arguments that charges for renting and maintaining portable toilets were not subject to sales tax. The taxpayer at issue was in the business of renting portable toilets. On the advice of its accountant, the taxpayer did not charge sales tax. As part of its rental business, the taxpayer transported
The court noted that under prior Maryland
The court next addressed the taxpayer’s argument that tax could not be imposed on portable toilet rentals occurring before 2013, which was when the Comptroller amended a regulation to specify that portable toilets rentals are subject to tax. The court disagreed, explaining that portable toilet rentals were subject to tax as rentals of tangible personal property long before the regulation took effect; the regulation did not make portable toilets taxable. However, the court abated all penalties assessed against the taxpayer because it found that the taxpayer acted in good faith, particularly by beginning to collect tax when informed by the Comptroller that its accountant’s advice was erroneous. It remains to be seen whether the taxpayer will appeal. For more information on T & T Sweeping Services, Inc. v. Comptroller, please contact Michael Riscili at 717-260-4719.
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The following information is not intended to be "written advice concerning one or more federal tax matters" subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.