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This is the first edition of the Eversheds Sutherland SALT Scoreboard for 2019. Since 2016, we have tallied the results of what we deem to be significant taxpayer wins and losses and analyzed those results. This edition of the SALT Scoreboard includes insights regarding Virginia’s costs of performance sourcing, New Jersey’s addbacks of intercompany expenses,…

The Court of Appeals of Ohio held that a Georgia-based wholesaler of lawn and garden products established nexus and its sales were properly included in the Commercial Activity Tax (CAT) base.

The taxpayer was a wholesaler of garden equipment that did not have property, employees or other presence in Ohio. The Taxpayer’s primary customers were…

The North Carolina legislature has introduced S.B. 622, which would make significant changes to a wide range of North Carolina taxes.

Among those changes, the legislation would allow a deduction, to the extent included in federal taxable income, for amounts received from specified economic incentive programs in North Carolina—the Job Maintenance and Capital Development…

On March 26, 2019, the Washington Court of Appeals held that a pharmacy benefit management company’s payments from clients (e.g., health maintenance organizations, health insurers, etc.) for the value of prescription drugs, were subject to the Washington B&O tax. The taxpayer manages the clients’ prescription drug benefit programs and performs activities, including contracting with third-party…

The Tennessee Court of Appeals held that a business that sold and installed automotive glass and also made repairs to automotive glass was properly classified as a seller of tangible personal property (glass), and not as a seller of services, for purposes of the Tennessee business tax. The Tennessee Department of Revenue audited the taxpayer’s…

The New York Division of Tax Appeals denied a refund claim to a taxpayer that sought to apply the income sourcing rules for registered broker-dealers to accept receipts from its separate investment advisory business. The taxpayer structured its broker-dealer operations and investment advisory operations into two different single-member Limited Liability Companies (LLCs). The taxpayer claimed…

The South Carolina Court of Appeals upheld the imposition of sales tax on sales of optional “waivers,” which were sold to renters and relieved them from liability of damaged or stolen rental property. Rent-A-Center East, Inc. and Rent Way, Inc. (collectively, the “Taxpayers”) operated retail stores in South Carolina from which customers could rent-to-own durable…

The Indiana Supreme Court recently held that a company properly classified a driver as an independent contractor, not an employee, for unemployment insurance tax purposes. The company connected drivers with vehicle manufacturers that needed large vehicles driven to their customers or dealerships. When a former driver filed a claim for state UI benefits, the Indiana…

On March 8, 2019, the New York Department of Taxation and Finance released an Advisory Opinion ruling that an online marketplace operator that facilitates taxable software sales is a “vendor” liable to collect sales tax. The Department relied on a rarely-used portion of the definition of “vendor,” which states that “when in the opinion of…