The Florida Department of Revenue recently issued a Tax Information Publication (TIP No. 17A01-08) offering guidance on the new sales and use tax exemption for animal and aquaculture health products that came into effect on July 1, 2017. Under the new exemption, animal health products administered to, applied to, or consumed by livestock or poultry to alleviate pain or cure or prevent sickness, disease, or suffering are exempt from sales tax. In addition, aquaculture health products that are used by aquaculture producers to prevent fungi, bacteria, and parasitic diseases in the production of aquaculture products are also exempt from sales tax. To be eligible for these exemptions, the purchaser must furnish the seller with an exemption certificate stating that the purchased item is exclusively for an exempted use. The TIP provides details on the contents of the exemption certificate.
Earlier this month, the Tax Court rejected an argument by the IRS that in order to establish good faith reliance on a tax advisor, for purposes of avoiding penalties, the taxpayer, a foreign corporation, needed to have (1) conducted an independent investigation into the tax advisor’s background and experience instead of merely relying upon the recommendation of the tax adviser by the taxpayer’s US legal counsel, and (2) hired a tax expert that specialized in international tax law or an attorney with an LL.M. degree. The Tax Court found that the IRS attempted to impose greater conditions on the taxpayer than what is required under existing law. The Tax Court ruled that the taxpayer reasonably relied upon the recommendation of its legal counsel in hiring the tax advisor. Furthermore, the standard is not whether the tax advisor was an expert in international tax law or an attorney with an LL.M. degree, but instead whether the tax advisor was “a competent professional who had sufficient expertise to justify reliance.”
The opinion in the case, Grecian Magnesite, Industrial & Shipping Co., S.A. v. Commissioner, 149 T.C. 3 (2017), can be found here.