Read our October 2015 posts on stateandlocaltax.com or read each article by clicking on the title. For the latest coverage and commentary on state and local tax developments delivered directly to your phone, download the latest version of the Sutherland SALT Shaker mobile app.
- Going Nowhere: Taxpayer Must Show Out-of-State Use of Software Licenses for Use Tax Exemption
The Indiana Department of Revenue (Department) found that a medical research company that purchased software licenses was entitled to an exemption from use tax for purchases of taxable computer software as long as it could show the licenses were ultimately used outside of Indiana.
- SALT Pet of the Month: Gracie
Meet Gracie, the two-year-old Rat Terrier who was recently adopted by Atlanta SALT secretary Rether White.
- That Was Fast: Michigan Court of Appeals Upholds Retroactive Repeal of Compact
A mere 28 days after oral argument, a three-judge panel of the Michigan Court of Appeals unanimously upheld a Court of Claims decision that sanctioned the Michigan Legislature’s retroactive withdrawal from the Multistate Tax Compact in 2014 PA 282, by ruling for the Michigan Department of Treasury in the consolidated appeal.
- “Please Hang Up and Try Again”: Walkie-Talkie Services Are Not “Telephony” Subject to New York State’s Telecommunications Excise Tax
A New York State Division of Tax Appeals Administrative Law Judge (ALJ) determined that two-way radio communications services, or walkie-talkie services, are not telephone services subject to New York State’s telecommunications excise tax imposed under Tax Law § 186-e (186-e Tax).
- Sorry, Wrong Number: Oregon Supreme Court Adopts Transactional Approach for Costs of Performance Sourcing
The Oregon Supreme Court held that an out-of-state taxpayer providing voice and data telecommunications services over a global network was required to use a transactional approach to source sales of other than tangible personal property for Oregon sales factor purposes under Oregon’s costs of performance method.
- Use Your Illusion, Too: Oregon Tax Court Finds Multistate Compact Is an Illusory Contract
The Oregon Tax Court held that the Multistate Tax Compact (Compact), which allows for an equally weighted, three-factor apportionment formula, was an illusory contract and its terms had been effectively disabled by the Oregon Legislature.
- Don’t Retaliate: Tennessee Retaliatory Tax Improperly Included Pennsylvania Workers’ Compensation Assessments
The Tennessee Supreme Court held that the Tennessee Department of Commerce and Insurance (Department) improperly imposed retaliatory taxes on Pennsylvania-domiciled insurance companies doing business in Tennessee, because Pennsylvania workers’ compensation assessments were not imposed on Tennessee insurance companies, but rather on the insurance companies’ policyholders.
- Who’s the Boss? Utah Includes Leased Employees’ Compensation in Taxpayer’s Payroll Factor
The Utah State Tax Commission ruled that a Utah-based manufacturing and marketing company’s payroll factor must include compensation paid to a third-party “professional employer organization” (PEO) pursuant to a lease agreement for employees working at the taxpayer’s Utah facilities.
- If It Doesn’t Fit, You Can’t Tax It: Wisconsin Rejects Market-Based Sourcing Approach for Skechers’ IP Holding Company Royalty Income
The Wisconsin Tax Appeals Commission overturned a $2.4 million assessment against an intellectual property (IP) holding company, ruling that the company’s income-producing activities for Wisconsin sales factor purposes – IP licensing and related activities – occurred entirely outside of the state.
- Missed Connections: Wyoming Board Rules that Temporary Storage Does Not Trigger Use Tax
The Wyoming State Board of Equalization held that telecommunications equipment shipped to and temporarily stored in Wyoming by a purchaser before being transported by the purchaser for installation in Montana by the manufacturer was not subject to the state’s use tax.