On October 3, 2019, California’s Office of Tax Appeals (OTA) held that value-added tax (VAT) imposed on the provision of services is included in the sales factor of California’s apportionment formula. The taxpayer, filing on a worldwide unitary basis, included VAT in its sales factor denominator that it billed, and collected, to its customers in
California Court Rules that New Parcel Tax Needed Two-Thirds Vote
A California Superior Court ruled that a City of Oakland ballot measure seeking to impose a 30 year parcel tax to fund educational programs required a two-thirds vote. Ballot measure AA was the result of a citizens’ initiative. In publicly circulated materials prior to the election, the City Attorney indicated that passage of Measure AA
Swart Distinguished: Foreign LLC Doing Business in California by Virtue of its 50% Interest in Pass-through Entity
The California Office of Tax Appeals (OTA) found that a foreign single-member LLC domiciled in Georgia was “doing business” in California by reason of its 50 percent interest in a pass-through LLC operating in California (LLC) and thus, was subject to the state’s annual LLC tax. The OTA focused on California’s definition of “doing business”
Marketplace Monday: CDTFA Releases Initial Discussion Paper in Anticipation of Interested Parties Meeting on Marketplace Facilitator Act
On October 4, 2019, the California Department of Tax and Fee Administration (CDTFA) released its Initial Discussion Paper in anticipation of an Interested Parties Meeting (IPM) set for October 15, 2019 in Sacramento. The subject of both the IPM and the Discussion Paper is how to interpret, clarify and make specific the Marketplace Facilitator Act.
Marketplace Monday – California Legislation Pending on Marketplace Sellers
California Assembly Bill (AB) 1790 passed the Legislature on September 26, 2019 and was sent to the Governor. The Governor has until October 13th to act on the bill. The Legislative Counsel’s Digest for AB 1790 states the bill would require a marketplace, as defined, to ensure that their terms and conditions regarding commercial
It’s None of Your Business: California Office of Tax Appeals Rejects FTB’s Broad Test for Doing Business
The California Office of Tax Appeals (OTA) reversed the Franchise Tax Board’s (FTB) determination that an out-of-state limited liability company (LLC) had taxable nexus with California solely because it held an ownership interest in an LLC operating in the state that ranged from 1.12% to 4.75%. California imposes an annual $800 tax on LLCs “doing
CalTax Quarterly Board of Directors Meeting
Lawmakers in California have introduced bills set to generate $16.4 billion in new taxes and fees for the 2019-2020 legislative session. Last week, Eversheds Sutherland sponsored CalTax’s Board of Directors Meeting, which covered the Governor’s agenda, federal conformity, local tax initiatives, the pending litigation in San Francisco and some new statewide tax bills. To learn
Over-Hall: U.S. Supreme Court Holds States Retain Sovereign Immunity from Private Suits in Other States, Overturning Nevada v. Hall
In a 5-to-4 decision, the US Supreme Court held that states retain sovereign immunity from private suits brought by individuals in courts of other states, and therefore, overruled its prior decision in Nevada v. Hall, 440 US 410 (1979). The decision arose from a longstanding dispute brought by an individual taxpayer against the California
California, meet New York
Eversheds Sutherland welcomed local guests into our New York office to meet Sacramento lawyers Tim Gustafson and Eric Coffill and learn about developments in California state tax. The group then went to see the Padres meet the Yankees (where the visiting team eked out a win).
An Overview of the California Research and Development Credit
The California research and development credit is frequently a high-ticket item for taxpayers. Indeed, according to the California Franchise Tax Board’s (FTB) 2017 Annual Report, $1,440,103,626 of corporation tax research credits were allowed in 2016, which was 72.5% of total corporation tax credits allowed for that year.
In his article for the Journal of Multistate