Shaking things up in state and local tax
Shaking things up in state and local tax
By Christopher Chang and Jack Trachtenberg
The New York State Division of Tax Appeals (DTA) ruled that the dividend income received by a taxpayer holding company from its minority ownership in a publicly traded corporation constituted “investment income” for purposes of New York’s Article 9-A franchise tax on business corporations. The holding company held stock…
The Multistate Tax Commission’s Financial Institutions Working Group held its monthly meeting on April 23, 2013 to discuss a proposed apportionment formula for financial institutions. For additional details about the meeting, read our legal alert, “Hate the Sin, Love the Sinner: MTC’s Financial Institution Apportionment Effort.”
By Zachary Atkins and Pilar Mata
The Colorado Department of Revenue issued a private letter ruling permitting a financial institution to deviate from Colorado’s special industry rules and use an alternative method of apportionment for corporate income tax purposes. The taxpayer, a savings and loan holding company with subsidiaries separately engaged in broker-dealer and banking…
By Saabir Kapoor and Andrew Appleby
The Colorado Department of Revenue (Department) determined that sales tax does not apply to a subscription fee for an interactive stock screening service. The taxpayer, a financial news and research organization, offered proprietary web-based stock screening tools to customers for a monthly subscription fee. To determine whether the subscription…
By Todd Betor and Pilar Mata
Oregon’s $29 million corporate excise tax claim against the taxpayers’ parent company was held to violate both the Due Process and Commerce Clauses of the U.S. Constitution by the U.S. Bankruptcy Court for the District of Delaware. Oregon claimed that Washington Mutual, Inc. (WMI) was liable for its subsidiaries’…
The Virginia Tax Commissioner overturned the Department of Taxation’s adjustments to a taxpayer’s nonresident Virginia income tax return based on a determination that certain transactions between related entities were indeed conducted at arm’s-length, contrary to the Department’s prior findings. The nonresident taxpayer was the majority owner of both an out-of-state LLC as well as a…
The Multistate Tax Commission’s (MTC) Sales and Use Tax Uniformity Subcommittee is moving forward with a broad sales tax nexus model statute that includes click-through, affiliate and attributional nexus provisions. The Subcommittee also discussed a memorandum related to class actions and false claims acts. The nexus and class action projects are in the educational stage…
Retailers and banks continue to get whipsawed on sales tax bad debt deductions where a retailer provides a private label credit card program in conjunction with a third party bank. The Kentucky Board of Tax Appeals ruled that a retailer was not entitled to a bad debt deduction because it was not the party that…
The Oregon Tax Court issued its second decision in less than a month regarding combined returns that include an insurance company, this time finding for the taxpayer. Last month, in Costco Wholesale Corp. v. Oregon Dept. of Rev., TC 4956, (Ore. Tax Ct. July 16, 2012), the court held that the income of Costco’s…
In a case that is interesting both substantively and procedurally, the Mississippi Supreme Court held that a consumer lending subsidiary of a national bank was subject to the Mississippi Finance Company Privilege Tax. Miss. Dep’t of Revenue v. Pikco Finance, Inc., 2012 WL 3031281 (Miss. July 26, 2012). In ruling for the state, the…
