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Effective April 1, 2020, the Cook County Department of Revenue is no longer applying its amusement tax to sales of paid television to non-residential customers, such as bars and hotels. The amusement tax ordinance never expressly applied to paid television. Rather, in 2007, the Department issued Amusement Ruling #1, which purported to include paid…

Given the dramatic limitations on business travel and mandatory work-from home policies caused by COVID-19 concerns, multistate employers should evaluate how these disruptions impact their state and local tax obligations related to employment. Following is a brief summary of the state and local employment tax issues that multistate employers may need to address during the…

On March 30, 2020, the California Court of Appeal overruled the city of Oakland’s demurrer regarding the validity of its waste management franchise fees on the grounds the plaintiffs sufficiently alleged that the fees were taxes. The city entered into waste management contracts with two companies. In turn, the companies agreed to pay the franchise…

After nearly a decade of stalled litigation in Illinois state court, the U.S. Court of Appeals for the Seventh Circuit permitted a group of taxpayers to proceed in federal court with their U.S. constitutional challenge to property tax assessments, over Tax Injunction Act and comity objections by Cook County. While the district court held that…

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…