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We have heard that some states have "home-rules" where you may need to file by city/county/district. How many returns that would entail?

Full Question: Hello, we have been doing business in a number of states (renting goods), which gives us nexus and are considering expanding nationally, but have heard the administration is more than just filing 50 returns. I've learned that some states have "home-rules" and those cities/counties can force you to file returns by city/county/district. I was wondering if you know how many returns that would entail. I can't seem to find anywhere that says if you filed everywhere in the US, you would need to file a total of 100 or so returns. Do you know?

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Answer:

Diane Yetter photoYou are correct that there are states that do authorize home rule authorities that can administer their own taxes. Generally the states that allow this are Alabama, Alaska, Arizona, Colorado, and Louisiana. However, since you are renting property, there could be other states that have some special rental returns. The City of Chicago imposes a rental tax that it administers separately from the state of Illinois. Without knowing the type of property you rent, there could be other jurisdictions. Many jurisdictions impose separate automobile rental taxes (short and long term). In terms of a total number of general sales and use tax returns, the number is not necessarily consistent. Alabama unfortunately has changes virtually every month in terms of the administering authority. Currently AL looks to have about 385 home rule jurisdictions. However, a large group (around 250) are filed with one collector and about 15 are filed with 2 other consolidating organizations. In Louisiana, generally you will file a Parish level return which will include the cities and special purpose district taxes that exist within the parish. Louisiana has 63 parishes. Alaska has about 60 municipalities that administer a sales/use tax. Colorado has about 65 cities/counties that self administer their taxes and Arizona has 17 non-program (home rule) cities. These numbers do change but should give you a rough estimate.

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