As employers look forward to reopening after the Covid-19 pandemic and, perhaps more importantly, adjusting to the “new normal” of indefinite telework, they should evaluate the multistate tax obligations that arise out of remote employees. Some states (and a few localities) have passed laws, promulgated regulations, or issued guidance on the impact that Covid-19 has
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Home is Where the Localization Is – Telework and Unemployment Insurance
With remote work spiking in popularity (or infamy), adherence to Covid-19 stay-at-home orders is progressing to permanent teleworking arrangements for some employees. Under normal circumstances, navigating the unemployment insurance (UI) rules on multistate employment may be more complicated than they seem. The Covid-19 pandemic and the resulting remote work mandates exacerbate the potential for such…
New Jersey Appellate Division Upholds Partnership Filing Fee
In an unpublished opinion, the Appellate Division of the New Jersey Superior Court affirmed the Tax Court’s holding that the New Jersey partnership filing fee does not violate the Commerce Clause of the U.S. Constitution. New Jersey statutes require partnerships with more than two owners and income derived from New Jersey sources to pay an…
Indiana Introduces Surcharge Tax Bill Targeting Social Media Platforms
Representative J.D. Prescott (R) introduced Indiana House Bill 1312, which would impose a surcharge tax on social media providers. This proposed bill shares similarities with proposed digital advertising taxes in Maryland and New York, except that Indiana’s proposed surcharge tax is targeted at social media providers deriving revenue from advertising services on their…
A Per Curiam Affirmance by the New Jersey Supreme Court of the Appellate Division Insurance Premium Tax Decision
In a per curiam opinion, the New Jersey Supreme Court affirmed an insurance premium tax (IPT) decision of the Appellate Division “substantially for the reasons expressed” in the Appellate Division’s opinion. The New Jersey Appellate Division held that New Jersey’s IPT for self-procured insurance coverage is based only on the risks insured in the state,…
Your losses may not be lost: Delaware NOL limitation violates state constitution
The Delaware Superior Court granted summary judgment in favor of the taxpayer finding that the Division of Revenue’s limitation on net operating losses violated the state constitution’s uniformity clause and that the Division improperly limited the amount of separate company NOL the taxpayer could claim on its Delaware income tax return to the amount of…
Illinois issues sales tax rules for remote sellers and marketplace facilitators
The Illinois Department of Revenue (IDOR) recently issued updated sales tax rules and guidance for remote sellers and marketplace facilitators. The updated rules and guidance reflect changes made by the 2019 “Leveling the Playing Field for Illinois Retail Act” that became effective on January 1, 2021 (Public Act 101-0031 and Public Act 101-0604).…
Washington ALJ Rules Video Game Developer’s Attendance at Trade Show Created Substantial Nexus
On December 4, 2020, the Washington Department of Revenue Appeals Division determined that an out-of-state company’s participation in an annual three-day trade show in Washington state was sufficient to create substantial nexus with the state and subject the company to both business and occupation tax (B&O tax) and retail sales tax. The taxpayer, an out-of-state…
Florida Senate introduces economic nexus and marketplace facilitator bill
On December 18, SB 50 was filed in the Florida Senate which would require sales tax collection from a person whose remote sales to Florida exceed $100,000 per year. It states that a person whose “taxable remote sales in the previous calendar year” exceed $100,000 has a “substantial number of remote sales” and is therefore…
Ohio Board of Tax Appeals concludes banking software subject to sales tax
The Ohio Board of Tax Appeals found that banking software was subject to sales tax in Cincinnati Federal Savings & Loan v. McClain, Case No. 2018-2247 (December 22, 2020). The banks purchased software for their online banking system. After initially paying tax on the purchases, the banks filed refund claims, claiming that the software…