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The Supreme Court of Idaho upheld the lower court’s judgment that the Idaho Reimbursement Incentive Act (“IRIA”) does not violate the separation of powers provisions of the Idaho Constitution because the IRIA does not delegate lawmaking powers to an administrative body and the IRIA does not limit judicial review. An administrative agency created under the…

COVID-19 is impacting many aspects of everyday business, and state taxes are not immune. The Eversheds Sutherland State and Local Tax team has put together the following list of considerations that businesses may want to keep in mind from a state and local tax perspective as the Coronavirus crisis continues to play out.

State Tax …

The Florida Department of Revenue determined that a platform software company should source its income from user fees and from its sale of services on a market basis, based on the location of the customer to which the services are provided. The platform software company provided a platform for developers to create and sell software…

The Washington Court of Appeals held that Seattle’s method of apportioning the City’s business and occupation tax (B&O tax) was unconstitutionally applied and unfairly apportioned when the City excluded compensation paid to independent representatives from the apportionment payroll factor. The taxpayer, a financial services firm headquartered in Seattle, generated most of its income through the…

On March 2, 2020, the Oregon Tax Court held that the application of the state’s E911 Tax to a provider of interconnected VoIP services (“Taxpayer”) did not violate the Due Process and Commerce Clauses of the U.S. Constitution. The E911 Tax is imposed on each person with access to Oregon’s emergency communications system, whether through…

The Michigan Court of Appeals recently held that the state’s statutory apportionment formula was unconstitutionally distortive as applied to a taxpayer’s Michigan Business Tax (MBT) liability. Therefore, the taxpayer was entitled to use an alternative formula. The court noted that this is an exceptional case where the taxpayer met its burden to show that the…

During the evening of St. Patrick’s Day, the Maryland State Senate passed on third reading (i.e., a floor vote) H.B. 732, which would impose a new Digital Advertising Gross Revenues Tax and H.B. 932, which would expand Maryland’s sales tax to digital products, including streaming. H.B. 732 passed by a vote of 29-16, and…

The New Jersey Tax Court ruled that an individual owner of a single-member limited liability company (“SMLLC”) correctly reported his distributive share of partnership income reported by the SMLCC. The SMLLC owned a 50% interest in a partnership that reported losses. On his New Jersey gross income tax return, the individual owner of the SMLCC…

On January 9, 2020, the New Jersey Superior Court, Appellate Division, upheld a New Jersey Tax Court decision that income, or “receipts,” earned by a taxpayer from providing broadcast fax, email and voice messaging services were performed within New Jersey and thus the majority of such receipts were properly sourced to New Jersey for purposes…

With the threat of COVID-19 looming, several state legislatures will halt or temporarily suspend their legislative sessions, including: Colorado, Delaware, Connecticut, Georgia, Kentucky, Maine, Maryland, New Hampshire, and Vermont. For many states, this is an unprecedented move while in others, the legislature has not adjourned early since the Civil War. Other state legislatures, like California’s…