To E-file or not to E-file?

With the growing trend of emails, online banking, and everyone having access to a computer, the Internal Revenue Service (IRS) is encouraging taxpayers to e-file their taxes. Last year over 90 million people used e-file to do their taxes.

From the onset, there seems to be numerous advantages to e-filing. Some of the advantages include:
• a faster refund than using a tradition paper return (as quick as 10 days if you use direct deposit);
• electronic returns have fewer errors than the paper returns;
• you can file your taxes any hour of the day or night; and
• most importantly—you save paper.
As everyone knows or should know, the deadline to e-file a tax return or to e-file a tax extension is April 15. If you e-file a tax extension before April 15, then you are entitled to a tax extension deadline of October 15 for your tax returns. However, after October 15, you can prepare your tax return on efile.com but you must mail in your tax return. Therefore, October 15 is the last day to take advantage of e-file or the “Free File” program.
The “Free File” program is a fast, easy, and free way to prepare and e-file federal taxes online. The “Free File” program provides free federal income tax preparation and electronic filing for eligible taxpayers through a partnership between the IRS and the Free File Alliance LLC, a group of private sector tax software companies.
Two free filing tax preparation and e-filing programs are available to individual taxpayers. “Traditional Free File” is available for taxpayers with adjusted gross incomes of $56,000 or less. On the other hand, “Free File Fillable Forms” can be used by people who earned more than $56,000.

Sale for Resale Exemption Excludes Cable Reels

In an opinion issued by the Third Court of Appeals in Austin affirming the Travis County District Court ruling, the higher court agreed with the lower that purchases of cable reels by Houston Wire and Cable Company did not qualify for either the sale-for-resale exemption or manufacturig exemption.

FACTUAL AND PROCEDURAL BACKGROUND

The background facts are undisputed. HWC is a supplier of electrical wire and cable. HWC buys cable in bulk from suppliers and maintains the cable in its inventory. HWC cuts, spools, and delivers cable according to the specific needs of its customers, who are primarily electrical wholesalers and distributors. When HWC purchases cable from its suppliers, the cable is delivered on reels. When HWC receives orders from its customers, it cuts and respools the cable onto new reels. The reels used by HWC to respool the cable are the subject of this lawsuit. They are purchased by HWC to allow it to customize the cable assemblies for its customers. A customer's order could specify, for instance, the type, arbor size, color, coding, labeling, lagging, attachments, or fumigations requirements for the reels. In the process of respooling, HWC attaches the reels to the specific cable ordered by the customer.
The parties agree that purchases of the cable itself qualify for the sale-for-resale sales tax exemption. HWC contends that its purchases of the reels, likewise, qualify for the sale-for-resale exemption and, therefore, paid the sales tax under protest for the period in question, August 1, 1997, through December 31, 2001. The amount of the refund at issue is $160,596.03, which includes the tax paid on the reels plus statutory pro rata interest for the refund period.
HWC contends that it is entitled to a refund because purchases of the reels, like purchases of the cable, qualify for the sale-for-resale exemption. Alternatively, even if the reels are excluded from the sale-for-resale exemption, HWC argues that it is entitled to a refund because it qualifies for the manufacturing exemption. On both points, HWC challenges the legal and factual sufficiency of the district court's findings.
After the Comptroller denied its refund claim, HWC filed suit in district court. Following a trial de novo, see Tex. Tax Code Ann. §§ 112.054, .154 (West 2001), the district court granted judgment in favor of the Comptroller on all issues. This appeal followed.

Processing:

In affirming the lower court, the 3rd Court of Appeals agreed that Appellant was not engaged in "processing" as defined by the court and specifically defined under Comptroller Rule 3.300(a), which in summary is the "...physical application of the materials and labor necessary to modify or to change the characteristics of tangible personal property."

For further reasons, the court of appeals affirmed the lower courts ruling, and the Texas Comptroller's prior determination.

For the full opinion, click here:


Houston%20Wire%20%26%20Cable%20Co.%20vs.%20Texas%20Comptroller.pdf