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On June 14, 2019, an Illinois Appellate Court held that a taxpayer’s subsidiaries are financial organizations that were excluded from the taxpayer’s Illinois combined return. During 2006, 2007 and 2008, Illinois excluded from a combined return those affiliates that apply a different apportionment method. (Note that, for taxable years ending on or after December 31,…

On June 28, the New Jersey Tax Court held that the state’s alternative minimum tax (known as the “Alternative Minimum Assessment,” or AMA) – which was repealed for tax years beginning on or after January 1, 2018 – is preempted by P.L. 86-272, a federal statute that bars states from imposing a net income tax…

The New York Division of Tax Appeals (DTA) held that the retroactive application of an amended statute did not violate a non-resident individual’s due process rights.  In 2009, the individual entered into an agreement to sell his shares in an S corporation and made an IRC 338(h)(10) election, pursuant to which the transaction was treated…

The South Carolina Department of Revenue issued a private letter ruling advising a company that its charges for developing and conducting surveys tailored to its clients’ needs are not subject to sales and use tax as communications services. Although taxable communications services include “charges to access an individual website,” and the company provided its clients…

The Maryland Court of Special Appeals upheld the Maryland Tax Court’s decision holding that the State Comptroller can subject an out-of-state holding company to tax because the holding company did not have economic substance apart from its parent, which was conducting business in the state. In addition to upholding the assessment of tax, the Court…

On June 26, 2019, the New York Court of Appeals held that a price comparison service was taxable as an information service because the information was not personal or individual in nature, which would exclude the service from sales tax.

The taxpayer operated a chain of grocery stores. As part of its pricing strategy, the…

While group exercise classes led by instructors are especially popular these days, a recent decision subjects such classes to a special New York City sales tax. In a May 23, 2019, decision, a New York Administrative Law Judge (ALJ) determined that SoulCycle, Inc. indoor cycling classes were subject to a special New York City 4.5%…

A taxpayer’s spent carbon reactivation process did not qualify as “manufacturing” for the purposes of Texas’ manufacturing sales tax exemption, according to recently released guidance from the Texas Comptroller of Public Accounts. In a private letter ruling, the Comptroller holds that a taxpayer who operates a carbon reactivation plant is ineligible for the exemption because…

New York’s highest court dismissed taxpayers’ appeal of an Appellate Division ruling that the payment of tax on intangible income to New York as statutory residents, without a credit for tax paid to Connecticut as domiciliaries, determining that the appeal did not raise a “substantial constitutional question.” Edelman v. New York State Dep’t of Taxation …

The Washington Court of Appeals upheld the Washington Department of Revenue’s denial of a sales tax exclusion for trade-ins of software and hardware. GameStop provides customers with a trade-in credit for software and hardware and allows customers to apply these credits towards future purchases of software and hardware. The Department denied GameStop’s exclusion for two…