The Texas Comptroller ruled that, for Texas apportionment purposes, the sale for resale of mobile voice and data services, purchased from third-party mobile telecommunications carriers and sold to an out-of-state third-party retailer using the carrier’s network infrastructure, is characterized as the sale of telecommunications services and internet access services, respectively, not the sale of an intangible right to access a service. Accordingly, unlike receipts from the sale of an intangible asset which are sourced to the purchaser’s location, the taxpayer’s service receipts were sourced to the state to the extent that the Internet was accessed in Texas or the mobile voice services were provided in Texas. Private Letter Ruling No. 201711016L (Nov. 27, 2017).

During the second half of 2017, California expanded its partial sales and use tax manufacturing and research and development exemption to include electric generation and distribution equipment. The legislative changes are particularly favorable to businesses engaged in electric generation through the use of renewable energy sources.

The California Department of Tax and Fee Administration (CDTFA) has issued a notice inviting stakeholders to participate in an interested parties meeting (IPM) scheduled for April 11, 2018, to discuss whether the CDTFA should undertake a regulatory project to amend its corresponding regulation to implement and apply the statutory changes and, if so, to what extent.

In their article for Law360, Eversheds Sutherland attorneys Carley Roberts, Robert Merten and Jessica Allen summarize the sales and use tax exemption’s scope and qualifying requirements, the 2017 legislative changes to the exemption, the CDTFA’s proposed amendments and why stakeholders may want to participate in the IPM process.

View the full article.

Many states require or permit affiliated businesses to report their income to the state in a combined group return. In their article for Bloomberg Tax, Eversheds Sutherland attorneys Maria Todorova, Justin Brown and Samantha Trencs discuss some of the complexities of combined reporting related to the inclusion of foreign entities in a combined group, including trends among states intended to expand the combined group to include additional foreign affiliates.

View the full article.

On March 12, 2018, Idaho’s governor signed into law H.B. 463 (the Bill), which provides a series of changes to Idaho’s income tax law in response to H.R. 1, popularly referred to as the Federal Tax Cuts and Jobs Act (the Act). The main changes to Idaho tax law include:  (i) conformity, for tax years beginning after January 1, 2018, to the IRC as of January 1, 2018; and (ii) the add-back to federal taxable income of all amounts previously deducted on the corporation’s federal tax return under: (a) IRC § 245A (the 100% DRD for certain foreign-source dividend) and (b) IRC § 250 (containing the deductions for GILTI, IRC § 78 gross-up amounts related to GILTI, and FDII). The Bill also preserves the pick-up of the Act’s one time transition tax or repatriation tax under IRC § 965 for tax years beginning in 2017 and the add-back to federal taxable income the corresponding deduction in IRC § 965, which were enacted by H.B. 355 on February 9, 2018.

However, Idaho H.B. 659, currently pending, proposes to limit the add-back of amounts deducted under IRC § 250 to the deduction for GILTI and related IRC § 78 gross-up amounts, and H.B. 684, also pending, proposes to remove the add-back of amounts deducted under IRC § 965.

The Eversheds Sutherland SALT Team is always excited to see what kind of pets our clients and friends have. Our team features a different pet at the end of every month, and we want to feature YOURS! Featured pets will receive a fun prize from the SALT Team. The deadline for March submissions is Monday, March 26.

To submit your pet to be featured, visit the Eversheds Sutherland SALT Shaker App, click “Pet of the Month” in the drop-down, then click “Submit A Pet.”

Don’t have the app? It is available for download in the Apple App StoreGoogle Play and the Amazon Appstore.

View previously-featured furry friends.

The state and local tax (SALT) impact of the recently enacted federal tax reform is still being assessed. Because of states’ broad conformity to the federal income tax laws, many of these changes will have an impact on taxpayers’ SALT liabilities.

In their article for Bloomberg Tax, Eversheds Sutherland attorneys Jeff Friedman, Todd Betor and Michael Spencer focus on the SALT consequences stemming from the following international provisions of the Tax Cuts and Jobs Act:

• a one-time “transition tax” on untaxed accumulated earnings and profits of controlled foreign corporations and certain other foreign corporations.

• 100% dividends received deduction for certain foreign source dividends.

• current taxation of certain US taxpayer’s global intangible low-taxed income.

• deduction allowed to certain US taxpayers for foreign derived intangible income.

• a base erosion and anti-abuse tax imposed on certain US taxpayers.

View the full article.

Eversheds Sutherland is a proud Platinum Sponsor of the Tax Executives Institute (TEI) 68th Midyear Conference on March 25-28, 2018, in Washington, DC. The conference is held at the Grand Hyatt Hotel.

Eversheds Sutherland partners Jeffrey Friedman, Ellen McElroy, Maria Todorova, Susan Seabrook, Daniel Nicholas and attorney Jessica Eisenmenger present, and the details of their presentations are below.

As a Platinum Sponsor, Eversheds Sutherland hosts a reception for conference attendees Monday, March 26, 6:30-9:00 p.m. at the Grand Hyatt Washington, Constitution C, D, E.

Monday, March 26
11:30 a.m. – 12:30 p.m.
The New Revenue Recognition and Lease Accounting Standards – Practical Issues and Applications
Speaker: Ellen McElroy (Federal)

Tuesday, March 27
10:45 a.m. – 11:45 a.m.
IRS Appeals – New Faces, New Challenges
Speaker: Susan Seabrook (Insurance)

Tuesday, March 27
1:45 p.m. – 2:45 p.m.
State Tax Aspects of Cross Border Transactions
Speakers: Jeff Friedman and Maria Todorova (SALT)

Wednesday, March 28
8:30 a.m. – 9:45 a.m.
State and Local Issues in Contract Drafting
Speakers: Daniel Nicholas (Federal) and Jessica Eisenmenger (SALT)

Read our February 2018 posts on or read each article by clicking on the title. For the latest coverage and commentary on state and local tax developments delivered directly to your phone, download the latest version of the Eversheds Sutherland SALT Shaker app.


  • Videocast: SALT Scoreboard – 2017 Year in Review
    The quarterly Eversheds Sutherland SALT Scoreboard tallies significant state and local tax litigation wins and losses. In this videocast, Charles C. Capouet and Jessica N. Allen share 2017 year-end observations, including taxpayers’ performances in corporate income tax and sales and use tax cases and the Pennsylvania Supreme Court’s decision in Nextel. Stay tuned for upcoming 2018 editions of the Eversheds Sutherland SALT Scoreboard!


The quarterly Eversheds Sutherland SALT Scoreboard tallies significant state and local tax litigation wins and losses. In this videocast, Charles C. Capouet and Jessica N. Allen share 2017 year-end observations, including taxpayers’ performances in corporate income tax and sales and use tax cases and the Pennsylvania Supreme Court’s decision in Nextel. Stay tuned for upcoming 2018 editions of the Eversheds Sutherland SALT Scoreboard!

View the SALT Scoreboard Videocast.