Click here to read our July 2013 articles here on our website, or read each article by clicking on the title. If you prefer, you may also read a printable PDF version.

• Arizona: Software Licenses Determined to Be Personal Property Rentals
  The Arizona Department of Revenue determined that a taxpayer providing online backup and restoration services was subject to Arizona’s transaction privilege tax after concluding that the receipts from such services were taxable as rentals of prewritten software.
• Rent-a-Cloud: Arizona’s Transaction Privilege Tax Applies to Receipts from the Temporary Use of Online Software
  The Arizona Department of Revenue determined in a private letter ruling that gross receipts from “renting” prewritten software available online are subject to Arizona’s transaction privilege tax.
• Handle with Care: “Shipping and Handling” Fees Subject to Arizona Transaction Privilege Tax
  The Arizona Department of Revenue determined that shipping and handling fees were subject to Arizona’s transaction privilege tax.
• SALT Pet(s) of the Month: Juan Carlos and Felipe
  Meet Juan Carlos and Felipe, the furry royalty of Sutherland Tax Partner Robb Chase and his wife, Allie.
• California Court Melts Ice Cream Maker’s External Obsolescence Argument
  A California appellate court held that an ice cream maker’s property tax appeal involving an alleged failure to make an external obsolescence adjustment was subject to the “substantial evidence” standard of review.
• Colorado High Court Rejects Public Utility’s Request for Parity-Down
  The Colorado Supreme Court held that the Colorado Division of Property Taxation did not violate a public utility’s equal protection and uniformity rights by valuing and taxing its property differently than cable companies’ property.
• Ending the Storm Tax: Delaware Excludes Emergency-Related Work from Nexus Determination
  Under the Delaware Infrastructure Emergency Response Act, emergency work related to a declared state of emergency does not constitute legal presence, residency, or doing business in Delaware for purposes of state and local taxes, licensing, and regulatory requirements.
• Two States, One Compact: Michigan Joins California in Reviewing the Multistate Tax Compact
  On July 3, 2013, the Michigan Supreme Court granted International Business Machines Corporation’s motion for leave to appeal the Court of Appeals’ November 12, 2012, judgment in favor of Michigan in International Business Machines v. Department of Treasury, Michigan Supreme Ct., Case No. 146440.
• New Jersey SaaS It IaaS Going to PaaS on Imposing Sales Tax on Cloud Computing
  The New Jersey Division of Taxation concluded in a technical bulletin that sales of cloud computing services are not subject to sales and use tax in New Jersey.
• New York: Disallowance of Mandatory Combined Reporting Position Sustained
  In a case of first impression interpreting when substantial intercorporate transactions are present for purposes of New York’s mandatory combined reporting provisions, a New York State Division of Tax Appeals Administrative Law Judge concluded that the taxpayers could not file on a combined basis.
• New York Trial Court Trims the Fat but Keeps the Meat on False Claims Act Lawsuit
  A New York State trial court has denied a motion filed by Sprint Nextel Corporation and its subsidiaries to dismiss a claim brought under the New York False Claims Act alleging the company knowingly filed false tax returns and underpaid New York State sales taxes on fixed-rate monthly wireless telephone plans sold to New York customers.
• To Be Taxed or Not to Be Taxed? Ancillary Telephone Charges Examined for Purposes of Pennsylvania’s Gross Receipts Tax
  The Commonwealth Court of Pennsylvania held that gross receipts received by Verizon in connection with nonrecurring service charges—including telephone line installation, moves of or changes to telephone lines and service, and repairs of telephone lines—were not taxable under the Commonwealth’s gross receipts tax on telephone companies.
• Texas Reins In Its Comptroller: Specified Locations to Qualify as a Retailer’s Place of Business for Sales Tax Remittance Purposes
  Texas has clarified the Comptroller’s authority to disregard certain retail business locations in determining the situs of a sale for local sales tax purposes.
• Even the Refunds Are Bigger: Texas to Return Up to $50 Million in Sales and Use Taxes Paid by Cable, Internet and Telecom Service Providers
  Effective September 1, 2013, Texas will refund state sales and use taxes paid by providers of cable television, Internet access or telecommunications services on tangible personal property used in their businesses.
• Texas Apportionment: Think Outside the [Set-Top] Box
  The Texas Comptroller determined that receipts received for the delivery of satellite programming to Texas subscribers should be sourced to the site of the subscriber’s set-top box for apportionment purposes.

Feature Your Pet as Pet of the Month!
Submit a photo of you with your pet and any fun details you would like to share to SALTTeam@sutherland.com for consideration for future editions of the SALT Pet of the Month.