November 7, 2019

2019 Budgetary New Tax Requirements

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As of October 1st, a number of new laws and tax/fee increases have gone into effect. Many of these new items will impact you, your family, your business, and/or our community.

In an effort to continue to keep you informed, I have highlighted several of those items below:

New Tax Legislation
** I did not support the biennium budget passed this legislative session, which featured many of the tax items listed below**

Digital Goods Tax
On October 1, 2019, the rate on digital goods will increase from 1% to 6.35%. This increase applies to a wide range of online services, including, but not limited to, TV streaming services (e.g. Netflix, Hulu), online music (e.g. Spotify, Apple Music), eBooks, and in-app purchases made on smartphones.

Excise Tax on Alcohol
For all alcoholic beverages other than beer, there is a rate increase of 10% for sales on or after October 1, 2019. Because of the rate increase, alcoholic beverage retailers will need to pay a floor tax by November 15, 2019, based on their inventory as of October 1, 2019.

‘Prepared Meals Tax Increase’
Despite the recent change in scope for the definition of the ‘prepared meals tax,’ many items will still apply within this policy and therefore be taxed at the new 7.35%.

A sample of those items include:
• Salads sold at salad bars; Salads sold in containers of less than eight ounces
• Coffee, tea
• Sandwiches and grinders
• Fountain drinks, shakes, bottled or canned juices and drinks, containers of milk, and non-carbonated mineral or spring water sold in containers of 16 fluid ounces or less
• Donuts, muffins, rolls, bagels, and pastries (five or fewer)
• Single pieces of fruit
• Pizza, whole or by the slice
To view a complete list of items included on the 7.35% ‘prepared meals tax’ list, click here.

Additional taxes include:

Motor Vehicle Trade-In Fee –The vehicle trade-in fee has increased from $35 to $100. Instead of being rewarded for trading in their old cars for new, more efficient vehicles, car buyers are being punished with a tax increase. This tax hurts not only families looking to upgrade their cars but also businesses that rely on fleets of vehicles to facilitate their everyday operations.

Short-Term Rental Facilitators – As of October 1, 2019, facilitators of short term home rentals will be required to collect and remit the room occupancy tax on behalf of the operators renting their homes.

Craft Breweries – On October 1, 2019, the alcoholic beverages tax on beer sold to-go at craft breweries will be reduced by 50%, and starting January 1, 2020, the exemption for beer served at a brewery taproom will be limited to the first 15 barrels a year.

Tobacco 21 – The legal age for purchasing cigarettes, tobacco products, and vaping products has been raised to 21. Starting October 1, 2019, there is a new tax on vaping products: 40¢ per milliliter for closed products, like Juul, and 10% of the wholesale price on the “juice” and vaporizer for open products. The cigarette dealer annual licensing fee also increases to $200 on October 1, 2019.

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