Taxpayer, a fleet management company, leases vehicles to businesses pursuant to a lease agreement that contains a terminal rental adjustment clause (“TRAC”) which is a clause that adjusts the amount of rent due under the lease at the end of the lease based on the value of the vehicle at that time. Depending on the
Daniel Schlueter
2023’s Most Interesting State Tax (MIST) developments
We are eager to share our summary of SALT highlights from the past year, which was recently published in Tax Notes State.
2023 was an eventful year, and our Most Interesting State Tax (MIST) developments contain a mix of cases covering income tax, sales tax, and procedural issues.
With numerous states grappling with similar…
Manufacturer tax exemption: Missouri Supreme Court affirms applicability to telecommunications services
On April 18, 2023, the Supreme Court of Missouri affirmed the Administrative Hearing Commission’s (AHC) decision that replacement equipment used to provide telecommunications services was exempt from use tax under the State’s manufacturing exemption in effect in 2011 and 2012.
Like most States, Missouri exempts from sales and use tax equipment used in manufacturing or…
Rushmore rejected: California Court of Appeal finds Los Angeles County assessor improperly taxed intangibles when valuing hotel
The California Court of Appeal held that the Los Angeles County Assessor erred by failing to remove the value of certain nontaxable intangible assets when valuing a hotel for property tax purposes. Intangible assets are generally exempt from property tax in California. In valuing the hotel, the Assessor used the income valuation approach, which looks…
Illinois DOR issues guidance on taxability of computer software licenses and maintenance agreements
The Illinois Department of Revenue (IDOR) released a general information letter outlining the applicability of Illinois Retailers’ Occupation Tax (ROT) on computer software licenses and maintenance agreements.
The letter states that sales of “canned” computer software are taxable retail sales in Illinois and are considered to be tangible personal property regardless of the form in…
Virginia’s top court strikes down county tax relief program as unconstitutional
The Supreme Court of Virginia recently upheld a circuit court decision invalidating a county’s plan to claw back tax refunds because it violated the state constitution’s uniform taxation requirement.
The Isle of Wight County changed the valuation methodology for its machinery and tools tax (“M&T tax”), resulting in approximately $5.6 million in refunds for tax…
Something smells like a tax: California Supreme Court says waste management fee may be illegal tax
The California Supreme Court recently held that the City of Oakland’s waste management franchise fees may constitute illegal taxes that fail to meet the state’s constitutional voter approval requirements. Accordingly, the state supreme court upheld the reversal of a trial court decision sustaining the city’s demurrer.
The plaintiffs challenging the fees are owners of multifamily…
New York Court allows art sales tax False Claims Act suit to proceed
The New York State Supreme Court, Appellate Division, affirmed a New York trial court decision denying a taxpayer’s motion to dismiss a False Claims Act suit brought against the taxpayer in relation to its sales of artwork to an alleged art collector under a resale exemption. According to the complaint, an employee of the taxpayer…
Taxpayers buck the domicile presumption – Utah Supreme Court rules they are nonresidents
The Utah Supreme Court ruled for taxpayers John and Brooke Buck, finding they were not domiciled in Utah during tax year 2012. The Court held that the State Tax Commission had incorrectly applied Utah’s statutory domicile presumption that attaches when a taxpayer claims a residential exemption for property tax purposes. As addressed in more detail…
2021’s most interesting litigation developments
Courts returned to business in a big way in 2021, following the pandemic-related slowdown in 2020. Over the year, there were several noteworthy income tax and sales tax decisions, as well as two First Amendment cases from the highest courts in Maryland and Ohio that reached opposite results and could be headed to the U.S.…