Click here to read our September 2013 posts on stateandlocaltax.com or read each article by clicking on the title. A printable PDF is also available here.

• Litigation Over California Property Tax Rule May Lead to Higher Property Taxes for Many Businesses
  The California Supreme Court held that the State Board of Equalization violated the state’s Administrative Procedures Act when it promulgated Cal. Code Regs., tit. 18, § 474.
• What a HOOT! Illinois Rewards Loyal Hotel Patrons
  The Illinois Department of Revenue determined that the redemption of rewards points by a hotel patron was generally not subject to the state’s Hotel Operators’ Occupation Tax (HOOT) because the rewards program was operated by the hotel, and the HOOT was remitted upon a patron’s initial stays at the hotels.
• Isn’t It a Sham? Indiana Disallows Deduction for Interest Payments Made to Affiliate
  The Indiana Department of Revenue disallowed a taxpayer’s deduction for interest expenses accrued to a subsidiary because the Department considered the loan a sham.
• SALT Pet of the Month: Skip
  Meet Skip, the five-month-old Welsh Terrier of Sutherland State and Local Tax Associate Zack Atkins and his fiancé, Emily.
• In to Be Out: Indiana Tax Court Rules Captive Insurance Companies Must Be Physically Present to Be Excluded From Combined Report
  In a case involving the exclusion of captive insurance companies from combined reporting groups, the Indiana Tax Court held that a captive must be physically present in Indiana to be “subject to” the insurance premiums tax and therefore exempt from the corporate income tax.
• Add It Back: Virginia Denies Deduction for Royalties Paid to Affiliate
  The Virginia Tax Commissioner concluded that a taxpayer was not permitted to deduct a portion of the royalties it had paid to an affiliate by narrowly construing the “subject to tax” exception to the state’s addback statute.
• Now That’s Cold! Virginia Taxes Separately Stated Advertising and Training Fees as Part of Sale of HVAC Systems
  The Virginia Tax Commissioner determined that an out-of-state manufacturer was subject to use tax on “local marketing group” fees charged to its customers because the true object of the transaction was the sale of tangible personal property.
• Washington State Makes Tracks: Leased Railroad Cars Do Not Create B&O Tax Nexus
  A Washington Superior Court held that using leased specialized railroad cars to transport products in Washington did not rise to the level of “substantial nexus.”