Read our July 2018 posts on stateandlocaltax.com 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.

FEATURED PUBLICATIONS

  • Eversheds Sutherland SALT Scoreboard Publication–Second Quarter 2018
    This is the tenth edition of the Eversheds Sutherland SALT Scoreboard, and the second edition of 2018. Each quarter, we tally the results of what we deem to be significant taxpayer wins and losses and analyze those results. This edition of the SALT Scoreboard includes a discussion of the United States Supreme Court’s decision in South Dakota v. Wayfair, Inc., insights regarding Chicago’s taxation of streaming video, and a spotlight on New York cases.

INTRODUCING SALT SOCIETY

  • We at the SALT Shaker are serious about our mission to shake things up in state and local tax, which is why we are launching SALT Society. In addition to tracking legislation, analyzing cases and previewing upcoming presentations, we want to share the happenings that impact the lives of state and local tax practitioners.The SALT Society will allow us to not only celebrate your pets, but also to celebrate you! Please share with us pictures from your personal events such as a vacation, a favorite hobby, a new baby, wedding news or a house move. We plan to share our important happenings as well. Kicking things off are photos of Jeff Friedman’s summer trip to Cuba with his daughter and Maria Todorova’s adventures with her family in Alaska.

EVENTS – LEARN ABOUT OUR UPCOMING EVENTS

Meet Gunter and Ingrid, the dog duo belonging to Eversheds Sutherland SALT Associate Dennis Jansen and his partner, Michael.

Gunter is a five-year-old Chiweenie (Chihuahua/Dachshund mix), and Ingrid is a two-year-old black Labradoodle (Labrador/Poodle mix). Dennis adopted Gunter from a pet shelter while living in Minnesota, although Gunter is originally from a shelter in California. Ingrid was subsequently adopted when Dennis and Michael lived in Dallas, Texas. The pair now live in Washington DC’s Chinatown neighborhood, near Eversheds Sutherland’s office.

Gunter is the leader of the two dogs—he definitely has a Napoleon complex and has a very bad habit of knocking over trash cans that are twice his size. Ingrid is more laid-back, unless there is a tennis ball or squirrel within eyesight. She has yet to raid a trash can, and Dennis and Michael hope it stays that way.

We are so excited to feature Gunter and Ingrid as our July Pets of the Month!

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

 

 

 

We at the SALT Shaker are serious about our mission to shake things up in state and local tax, which is why we are launching SALT Society.

In addition to tracking legislation, analyzing cases and previewing upcoming presentations, we want to share the happenings that impact the lives of state and local tax practitioners. The SALT Society will allow us to not only celebrate your pets, but also to celebrate you!

Please share with us pictures from your personal events such as a vacation, a favorite hobby, a new baby, wedding news or a house move. We plan to share our important happenings as well.

Kicking things off are photos of Jeff Friedman‘s summer trip to Cuba with his daughter and Maria Todorova’s adventures with her family in Alaska.

Eversheds Sutherland SALT partner Jeff Friedman and his daughter in Cuba.
Eversheds Sutherland SALT partner Jeff Friedman and his daughter in Cuba.
Eversheds Sutherland SALT partner Maria Todorova adventures with her family in Alaska.
Eversheds Sutherland SALT partner Maria Todorova adventures with her family in Alaska.
Eversheds Sutherland SALT partner Maria Todorova adventures with her family in Alaska.
Eversheds Sutherland SALT partner Maria Todorova adventures with her family in Alaska.

Let us know how you spent your summer vacation!

The Minnesota Supreme Court held that the state’s standard apportionment method did not fairly reflect the taxpayer’s net income allocable to the state, reversing the Tax Court’s ruling. The taxpayer, a national financial institution, transferred its loan portfolios to two newly formed partnerships. For apportionment purposes, Minnesota requires financial institutions to include loan interest in their sales factor numerators, but does not require other entities to do so. Unlike the taxpayer, the partnerships were not financial institutions. The partnerships thus excluded loan interest and reported their receipts factors as zero. The taxpayer’s distributive share of the partnerships’ apportioned income, in turn, contributed no receipts to its own receipts factor.

The Commissioner argued that the partnerships’ application of the statutory apportionment method failed to account for the taxpayer’s Minnesota business activities and thus, distorted the taxpayer’s state income by excluding interest income paid by Minnesota borrowers. The Commissioner proposed an alternative apportionment method requiring the partnerships to follow the rules for financial institutions and include interest income in their receipts factors. The court agreed with the Commissioner, concluding that the statutory apportionment formula failed to recognize any of the taxpayer’s income from its Minnesota business activities. The court noted that the taxpayer’s transfer of  its loan portfolios to the partnerships did not change the management of the loans, and Minnesota borrowers continued to make their loan payments directly to the taxpayer as a collection agent for the partnerships. The statutory method therefore distorted the taxpayer’s in-state income. No. A7-0923.

On Tuesday, June 24, the Judiciary Committee of the US House of Representatives held a hearing on “Examining the Wayfair decision and its Ramifications for Consumers and Small Businesses.” The hearing was scheduled at the direction of Rep. Robert Goodlatte (R-VA), Chairman of the Judiciary Committee and did not address any specific pending or former legislation, but instead was informational and used to assist the committee in determining whether and how Congress should intervene.

View the full legal alert.

This is the tenth edition of the Eversheds Sutherland SALT Scoreboard, and the second edition of 2018. Each quarter, we tally the results of what we deem to be significant taxpayer wins and losses and analyze those results. This edition of the SALT Scoreboard includes a discussion of the United States Supreme Court’s decision in South Dakota v. Wayfair, Inc., insights regarding Chicago’s taxation of streaming video, and a spotlight on New York cases.

View our Eversheds Sutherland SALT Scoreboard results from the second quarter of 2018!

 

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 May submissions is Wednesday, July 25.

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 North Carolina Supreme Court recently held that the presence in the state of a trust’s beneficiary is not sufficient to establish income tax nexus for the trust. In the Kimberly Rice Kaestner 1992 Family Trust case, the trust’s beneficiaries were residents of North Carolina. There were no other connections between the state and the trust. The court held that the trust did not have sufficient minimum connections with the state of North Carolina to satisfy the due process requirements of the US Constitution and the equivalent due process requirements of the Constitution of North Carolina. The court emphasized that a trust is a separate and distinct entity from its beneficiaries, and a trust’s connections with the state are what matters for determining whether the tax violates due process. The court reasoned that the beneficiaries’ residency in North Carolina cannot be viewed as the trust conducting purposeful activities in the state because the trust and its beneficiaries are separate legal entities. Kimberley Rice Kaestner 1992 Family Trust v. N.C. Dep’t of Revenue, No. 307PA15-2 (N.C., June 8, 2018).

For more information on the lower court decisions in this case, please see our previous posts regarding the North Carolina Court of Appeals decision and the Wake County Superior Court decision.

Read our June 2018 posts on stateandlocaltax.com 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.

FEATURED PUBLICATIONS

  • The Sales Taxation of Virtual Currency
    Bitcoin and other virtual currencies may be the most controversial financial assets on the market right now and are certainly the most discussed. In their article for Bloomberg BNA, Eversheds Sutherland attorneys Jonathan Feldman and Christopher Beaudro examine the state sales tax implications of selling virtual currency.

FEATURED EVENTS

  • State Tax Reform Roundtables
    Eversheds Sutherland Partners Jeff Friedman, Todd Lard and Eric Tresh present on the Tax Executives Institute’s (TEI) State and Local Tax Committee’s series of State Tax Reform Roundtables. The series of calls will enable SALT professionals to stay abreast of state tax developments associated with the Tax Cuts and Jobs Act, to engage with subject-matter experts, and to hear from peers regarding their “boots on the ground” knowledge and experience.

EVENTS – LEARN ABOUT OUR UPCOMING EVENTS