Click here to read our February 2014 posts 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.

• Take Two: Colorado State Court Halts Out-of-State Seller Use Tax Reporting Requirements…Again
  A Colorado state district court issued a preliminary injunction preventing the Colorado Department of Revenue from enforcing Colorado’s out-of-state seller use tax reporting statutes and related regulations.
• The Crossroads of Taxation: Receipts from Intangibles Sourced to Indiana Based on Market Exploitation and COP
  The Indiana Department of State Revenue issued two letters of findings in which it concluded that a multistate corporation and its subsidiary were not entitled to source their receipts from franchise agreements based on costs of performance for corporate income tax purposes.
• SALT Pet(s) of the Month: Anthony, Dakota and Annabelle
  Meet Anthony, Dakota and Annabelle, the lovable orange tabbies belonging to Kathy Minde, Director of State and Local Tax at Lennox International.
• Maine Issues Federal NOL Modification Guidance for C-Corporations
  Maine Revenue Services issued a Guidance Document for C-corporations regarding state modifications to federal net operating losses.
• It’s True! Online Database Service Not Subject to Massachusetts Sales Tax
  The Massachusetts Department of Revenue determined that the sale of access to an online database was not subject to sales and use tax because the “object of the transaction” was nontaxable data processing services rather than taxable prewritten software.
• The Department Doth Protest Too Much: Michigan Court of Appeals Rejects State’s Failure of Proof Defense in Costs of Performance Case
  The Michigan Court of Appeals held that a provider of event planning and coordination services presented sufficient evidence to support its costs of performance sales factor sourcing method, under which it sourced services receipts to the location where the event occurred.
• Casino’s Litigation Gamble Pays Off: Mississippi Supreme Court Allows Tax Credits to Offset Combined Group’s Liability
  The Mississippi Supreme Court held that a casino operator was entitled to use tax credits—specifically, gambling license fee credits—earned by one combined group member to offset the entire combined group’s liability.
• Fore! New York Tees Off on QETC Credits for Hollow Metal Golf Ball Production
  The New York State Department of Taxation and Finance issued an Advisory Opinion regarding the availability of Qualified Emerging Technology Company (QETC) facilities, operations and training credits pertaining to purchases of patents and other property related to hollow metal golf ball production.
• Are New York Flat Vehicle Registration Fees Unconstitutional? Keep Your Eyes on the Road Ahead
  In an action challenging the constitutionality of two New York flat highway taxes, a New York trial court ruled in favor of the taxpayer, denying a motion to dismiss filed by the New York State Department of Taxation and Finance.
• In-and-Out in Oregon: Department Updates Rules on Apportionment and Adjustments
  In an administrative order, the Oregon Department of Revenue (1) repealed a rule related to Oregon’s Multistate Tax Compact (MTC) statute, (2) changed the method for utility and telecommunication providers to elect a double-weighted sales factor and (3) provided instructions on the time to adjust a return based on another taxing authority’s correction.
• Gotta Catch ‘Em All: Texs Regulation Broadly Redefines Scope of Taxable Cable Television Services
  The Texas Comptroller has amended its regulation governing the sales tax treatment of cable television services.
• Desperately Seeking Objectification: Virginia Exempts Taxpayer’s Electronic Document and Programming Services
  The Virginia Tax Commissioner ruled that a taxpayer’s provision of electronic document and programming services in conjunction with its delivery of printed materials was not subject to sales and use tax.