Click here to read our January 2014 posts on stateandlocaltax.com or read each article by clicking on the title. A printable PDF is also available here. To read our commentary on the latest state and local tax developments as they are published, be sure to download the Sutherland SALT Shaker mobile app.
- Finnigan, Begin Again: California Regulation Reflects Finnigan Sourcing Methodology
The California Franchise Tax Board amended its regulation governing the sourcing of sales of tangible personal property to reflect California’s statutory shift in 2009 to the Finnigan rule, effective for tax years beginning on or after January 1, 2011.
- Can I Order Catalog Storage in Indiana? Hold the Income Tax, Please
The Indiana Department of Revenue determined that storage of advertising catalogs in Indiana, for a taxpayer’s out-of-state clients, did not create corporate income tax nexus for such clients.
- 2013 SALT Pet(s) of the Year: We have a winner! (Well, winners, actually.)
We can’t resist man’s best friend, and four handsome hounds caught our eye…Layla, Romeo, Gracie and Rocky.
- Hold the Sales Tax Too, Please: Catalog Storage Does Not Create Sales Tax Nexus in Indiana Either
The Indiana Department of Revenue determined that the storage of advertising catalogs in Indiana, for a taxpayer’s out-of-state clients, did not create sales tax nexus for such clients.
- Massachusetts Governor Proposes Insurance Industry Pass-Through Tax
The Massachusetts Governor released his proposed fiscal year 2015 budget, which includes a tax provision that is targeted directly at the insurance industry.
- Sales Tax on Out-of-State Deliveries? Misery Is Spelled M-i-s-s-o-u-r-i
The Missouri Department of Revenue determined that a Missouri-based seller was required to collect and remit sales tax on sales to a Missouri-headquartered customer despite the fact that the items were shipped to the customer’s out-of-state locations.
- Missouri Department of Revenue Concludes Sales or Rentals of Streaming Video Content Are Not Subject to Sales or Use Tax
The Missouri Department of Revenue issued a letter ruling in which it determined that the sale or rental of streaming video content is not subject to Missouri sales or use tax.
- Live by the Sword: Tax Court Insists New Jersey Must Play by Its Own Rules for Throw-Out Purposes
The New Jersey Tax Court drafted a letter to the Superior Court of New Jersey, Appellate Division, to amplify the Tax Court’s August 9, 2013, taxpayer-favorable decision applying New Jersey’s “Throw-Out Rule” in Lorillard Licensing Co. LLC v. Division of Taxation, Docket No. A-2033-13T1.
- Where Credit Is Due: New York Securities Broker Sources Matched Principal Transactions Based on Production Credits
The New York State Department of Taxation and Finance issued an advisory opinion determining that a securities broker may source receipts from “matched principal transactions” based on the “production credit method” provided in New York tax law.
- Oklahoma Letter Rulings: Sales of Digital Products, Software Maintenance Renewals and Video Game Cards Are Not Subject to Sales Tax
The Oklahoma Tax Commission issued three Letter Rulings addressing the digital economy.
- Pennsylvania Supreme Court Deposits Bank’s Uniformity Claim in the Recycling Bin
The Pennsylvania Supreme Court held that treating a merger between two in-state banks differently than a merger between an in-state bank and an out-of-state bank did not violate the Uniformity Clause of the Pennsylvania Constitution.
- Compact Texas Trial Court Decision Denies MTC Three-Factor Election
A Texas trial court denied a taxpayer’s claim that it was entitled to use the Multistate Tax Compact’s three-factor formula election for the Texas Margin Tax.
- Margin [Tax] Call: Texas Appellate Court Holds COGS Deduction Eligibility Determined on Combined Group Basis
In the first appellate decision arising from a Texas Margin Tax audit, the Texas Court of Appeals ruled in favor of the taxpayer, holding that a combined group’s eligibility for the cost of goods sold (COGS) deduction is determined on a group-wide rather than a separate-entity basis.
- Would You Like to Add Fries to That? Virginia Denies Fast Food Company’s Request for Intangible Expense Add-Back Relief
The Virginia Tax Commissioner ruled a taxpayer’s licensing arrangements with a subsidiary intangible holding company did not meet the unrelated party exception to Virginia’s intangible expense add-back statute.
- Unlike Sandals Resorts, Virginia Add-Back Exception Not All-Inclusive
The Virginia Tax Commissioner ruled that the state’s intangible expense add-back exception is not all inclusive and does not apply to the gross amount of royalty payments made to a taxpayer’s affiliate based solely on the gross amount of the payments shown on another state’s tax return.
- The U.S. Supreme Court Limits Jurisdiction Over Foreign Companies
On January 14, 2014, the U.S. Supreme Court reversed the Ninth Circuit and held that due process prevents a state court from exercising general personal jurisdiction over a foreign corporation based solely on the business activities performed in the forum state by a U.S. subsidiary on behalf of the foreign parent.