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

• Down for the Count, But Not Out: Colorado’s Remote Retailer Reporting Requirements Expected to Be Challenged in State Court
  After the U.S. Court of Appeals for the Tenth Circuit denied an en banc rehearing on October 1, 2013, the Direct Marketing Association is expected to bring suit in Colorado District Court to challenge the constitutionality of the Colorado law that requires out-of-state retailers without a physical presence in Colorado to notify their customers of their use tax responsibilities.
• Florida Trial Court Rejects Satellite Industry’s Discrimination Claims
  A Florida trial court ruled that imposing different tax rates on cable and satellite television services did not violate the Commerce Clause or the Equal Protection Clause of the U.S. Constitution.
• Be Careful What You Ask For: Illinois Grants Request for Alternative Apportionment
  The Illinois Department of Revenue granted a taxpayer’s request to use an alternative apportionment method, determining that application of the standard single sales factor formula did not fairly represent the market for the taxpayer’s goods, services or other sources of income.
• SALT Pet of the Month: Raleigh
  Meet Raleigh, also known as Roo, the seven-year-old cuddly companion of Morgan Lendino (Time Warner Cable) and her husband, Tim.
• If At First You Don’t Succeed: Illinois House of Representatives Introduces Corporate Tax Liability Disclosure Bill After Senate Failure
  The Illinois House of Representatives recently held a contentious hearing on legislation introduced earlier this year that would require publicly traded corporations, and those that are at least 50% owned by a publicly traded company, “doing business” in Illinois to disclose certain tax information in an annual statement filed with the Secretary of State.
• Illinois Gets the Works: Wendy’s Captive Insurance Company Scores Another Win
  Although states continue to challenge the validity of captive insurance companies, Wendy’s has notched several taxpayer victories. In a win involving Scioto Insurance Company, Wendy’s captive insurance company, the Illinois Appellate Court held that Scioto constituted a bona fide insurance company that was properly excluded from Wendy’s combined report.
• No COP for You! Indiana Rules Out-of-State Information Service Provider Cannot Use COP Sourcing Method
  The Indiana Department of Revenue determined in a Letter of Finding that an out-of-state information service provider must apportion its receipts from sales to Indiana customers to Indiana in a market-sourcing-like manner, even though the majority of its costs were incurred outside Indiana.
• Short Shrift for the Short-Lived Tech Tax: Massachusetts’ Computer Design Services Tax Repealed in Less Than Two Months
  Less than two months after Massachusetts enacted a tax on computer design and software services, the legislation was repealed with the passage of House Bill 3662.
• Take Control! Massachusetts Clarifies Common Ownership Requirement for Combined Reporting
  The Massachusetts Department of Revenue issued a Letter Ruling stating that, for purposes of determining common control with regard to a combined report, the Department looks to actual voting control as opposed to voting power, which is the test for federal consolidated reporting.
• What SAP in Minnesota? No Sales Tax on Software Consulting and Implementation Services, Says Minnesota Tax Court
  The Minnesota Tax Court held that computer software consulting and implementation services were not subject to sales tax in Minnesota.
• Tennessee Clear on Cloud Services: Cloud Services Not Taxable Where Servers Are Out of State
  The Tennessee Department of Revenue determined in a Letter Ruling that a taxpayer’s sale of remote storage services and virtual computing services are not subject to Tennessee sales or use tax where the data centers and servers used to provide such services are located outside the state.
• It’s a WAN! IBM’s WAN Service Not a Telecommunications Service in Tennessee
  The Tennessee Court of Appeals held a wide area network (WAN) service provided by IBM was not taxable because the true object of the service was not a “telecommunications service.”
• Back to the Basics: Tennessee Court of Appeals Rejects Claim that Internet Access Is Taxable as “Basic” Telecommunication Service
  The Tennessee Court of Appeals held that a taxpayer’s wholesale service of converting end-user information into Internet protocol was an “enhanced” service for which the true object or primary purpose was to provide the non-taxable service of “Internet access” and not the taxable service of “telecommunications.”