The Louisiana Court of Appeal, Second Circuit ruled that a city franchise fee imposed on a telecommunications company was discriminatory in violation of the federal Telecommunications Act of 1996 (the “Act”) where the fee was charged to a taxpayer pursuant to a bilateral contract but not charged to the taxpayer’s competitor.

The city brought a claim for breach of contract for failure by a telecommunications company to pay franchise fees that were imposed in exchange for the taxpayer’s use of public rights-of-way for cable, wire, fiber and other methods for telecommunications transmission. The taxpayer filed a counter claim that the franchise fee was discriminatory under Section 253 of the Act which authorizes state and local governments to require compensation for the use of rights of way. However, the federal law requires that the compensation must be reasonable and nondiscriminatory. The trial court found that the taxpayer was charged the franchise fee while its competitor was not. Based on this fact, the court of appeal found that the franchise fee was not applied on a competitively neutral and nondiscriminatory basis as required by Section 253 of the Act.

Shreveport v. CenturyTel Solutions LLC, No. 54,159-CA; Trial Court No. 591,661 (La. App. 2nd Cir. Nov. 17, 2021).

This week, members of the Eversheds Sutherland SALT team will participate in COST’s 2021 Intermediate/Advanced State Income Tax School on December 6-7.

Eversheds Sutherland SALT attorneys are presenting on the following topics:

  • Jurisdictional Nexus and Constitutional Limitations – Jonathan Feldman, Maria Todorova, Breen Schiller – Monday, December 6
  • The Corporate Income Tax Base and Advanced Domestic State Adjustments – Todd Lard and Justin Brown – Tuesday, December 7
  • Gross Receipts Taxes/Modified Gross Receipts Taxes Nikki Dobay – Tuesday, December 7

To register, click here.

In the December 3, 2021 issue of the Maryland Register, the Comptroller confirmed that it adopted regulations to the Digital Advertising Gross Revenues Tax on November 24, 2021. Despite robust comments provided to the proposed regulations (including those provided by Eversheds Sutherland), the Comptroller made almost no changes in the final version.  The Comptroller’s final regulations use a device-based apportionment fraction to determine when digital advertising is attributable to Maryland.


Effective on January 1, 2022, the digital advertising tax is imposed on the annual gross revenues of a person derived from digital advertising services in Maryland. Md. Code Ann., Tax-Gen. § 7.5-102(a). The General Assembly directed the Comptroller to “adopt regulations that determine the state from which revenues from digital advertising services are derived.” Md. Code Ann., Tax-Gen. § 7.5-102(b)(2).  In response, the Comptroller filed the proposed sourcing regulations on August 31, 2021.

Notice of Final Action

The Comptroller only made two “nonsubstantive changes” to the proposed regulations:

  • In addition to technical information, the proposed regulation allowed taxpayers to determine the devices’ locations based on “the terms of the underlying contract for digital advertising services.” The Comptroller revised the provision to instead refer to “nontechnical information included in the contract for digital advertising services.” The term “nontechnical information” is not defined.
  • The Comptroller added “industry standard metrics” to the non-exhaustive list of “technical information.” While the Comptroller does not expand on which industry standard metrics it would accept to determine device location, this change may present taxpayers with an option to use industry information to determine Maryland digital advertising.

The regulations’ effective date is December 13, 2021, which is shortly before the digital advertising tax’s January 1, 2022 effective date.

In this episode of the SALT Shaker Podcast policy series, host and Eversheds Sutherland Partner Nikki Dobay welcomes back guest Meredith Beeson, Director of State Government Affairs with the Global Business Alliance (GBA). Her colleague Alan Pasetsky, Tax Policy Consultant with GBA, also joins the conversation.

Together, they delve into the corporate provisions included in the Build Back Better Act as passed by the House on November 19. In particular, they focus on the various changes proposed to 163—specifically changes to subsection (j) and the inclusion of a new subsection, (n). Alan and Meredith then discuss GBA’s position on these changes and the implications of these changes at the state level. Finally, they wrap up their policy discussion with thoughts on the changes to GILTI.

This week, Nikki’s surprise nontax question is very timely – do you like the traditional Thanksgiving meal?

The Eversheds Sutherland State and Local Tax team has been engaged in state tax policy work for years, tracking tax legislation, helping clients gauge the impact of various proposals, drafting talking points and rewriting legislation. This series, which is focused on state and local tax policy issues, is hosted by Partner Nikki Dobay, who has an extensive background in tax policy.

Questions or comments? Email







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The New York State Department of Taxation and Finance recently released advisory opinion TSB-A-20(70)S, concluding that a taxpayer’s service of creating and hosting websites and applications (apps) for mobile devices is nontaxable. The taxpayer’s customers are retailers of consumer goods, and the customer’s users access the website or app to purchase items from the retailer. The taxpayer does not charge for website/app creation, and instead recovers its costs through the fixed monthly service fee it charges for website maintenance and hosting. The taxpayer embeds code in the websites/apps so that it can provide analytics services to each customer. The Department concluded that website development services, including consulting, designing, creation, and updating or hosting are not enumerated services subject to tax and do not involve the transfer of any prewritten computer software. The analytics the taxpayer provides are also not a taxable information service in New York, because the information is unique to each individual, and is not incorporated in reports provided to other clients.

An employee’s state of residency, and in some cases the city and/or county of residency, may significantly affect their employer’s withholding tax obligations. Given the expected increase in permanent remote work, residency complications may exacerbate an employer’s state withholding compliance burdens.

In this SALT@Work column for the November/December issue of Journal of Multistate Taxation and Incentives, Eversheds Sutherland Partner Charlie Kearns provides some common examples where employee residency can affect employer withholding, then addresses the extent of an employer’s obligations to document and/or verify an employee’s residency status for state withholding purposes.

Calling all trivia fans! Don’t miss out on a chance to show off your SALT knowledge!

We will award prizes for the smartest (and fastest) participants.

This week’s question: Where did the Multistate Tax Commission (MTC) hold its Fall Executive Committee and Uniformity Committee Meetings?

E-mail your response to

The prize for the first response to today’s question is a $25 UBER Eats gift card.

Answers will be posted on Saturdays in our SALT Shaker Weekly Digest. Be sure to check back then!

A New York Division of Tax Appeals administrative law judge determined that a California-based company’s sale of memberships to access its online medical technology platform was the provision of a nontaxable service rather than a taxable sale of prewritten software. The company offered membership-based “care navigation services” to patients of physician-owned medical practices through a web portal and a mobile device application, providing various services such as: medical provider selection; referral management; billing and insurance assistance; and access to medical records through a web portal and a mobile application, among others. While agreeing that the care navigation services were nontaxable, the Department of Taxation and Finance nevertheless asserted that the membership fees constituted receipts from sales of software because the memberships gave access to and the right to use the company’s software. The ALJ disagreed, concluding that the primary function of the membership was receiving care navigation services, which were not enumerated as subject to tax. The ALJ held that using software as one means of delivery was insufficient to characterize the overall service as the taxable sale of software. Finally, the ALJ noted that the Department’s assessment did not violate the Internet Tax Freedom Act because the Department was “taxing the prewritten software used in offering [the care navigation] services, as it would if the prewritten computer software was sold by other means.”

Matter of 1Life Healthcare, Inc., DTA No. 829434 (Div. Tax App., Nov. 10, 2021).

On December 1, Eversheds Sutherland Partner Nikki Dobay will present a multistate tax update for the Associated Taxpayers of Idaho during its 2021 ATI Taxpayers Conference.

In addition, Eversheds Sutherland Partner Jeff Friedman will present Hot Topics in Multistate Taxation for the North Carolina Bar Association on December 2.

Finally, Eversheds Sutherland is a sponsor of COST’s Pacific Northwest Regional State Tax Webinar on December 2. Speakers and topics include:

  • Partners Michele Borens and Jeff FriedmanDiscussion of State Tax Cases, Issues & Policy Matters to Watch
  • Partner Jeff Friedman – What’s New at the Washington Department of Revenue

View and learn more about past and upcoming events and presentations for the SALT team.

Currently, there is no California conformity to GILTI, and GILTI is not part of the tax law in California unless and until the California Legislature adopts it.

In this column for the November/December issue of Journal of Multistate Taxation and Incentives, Eversheds Sutherland attorneys Eric Coffill and Annie Rothschild discuss the California Legislature’s recent effort to conform to GILTI, which failed, and why future attempts should be rejected.