On April 2, 2026, the Supreme Judicial Court of Maine ruled that a liquor supplier was subject to Maine income tax and owed nearly $750,000 in state income tax, penalties, and interest for the 2011-2017 tax years.
The liquor supplier argued that it was not subject to income tax because it did not have nexus
Income Tax
Nexus, apportionment, market-based sourcing, voluntary disclosures... no single business can stay on top of all the state-by-state legislation and regulatory guidance changing SALT income tax strategies today.
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A valid business purpose: Virginia letter ruling concludes no add back required
By John Ormonde & Mark Saporsky on
Posted in Income Tax
In a recent letter ruling, the Virginia Tax Commissioner granted a corporate taxpayer relief from Virginia’s intercompany interest add‑back requirement, concluding that the taxpayer satisfied the statutory business purpose exception.
The case arose from a centralized cash management structure in which subsidiaries deposited cash with the parent entity and relied on intercompany loans when they…
Florida Circuit Court reinforces COP rule by sourcing online bill pay services to the location of the taxpayer’s own activities
By Diane Beleckas on
Posted in Income Tax
The Florida Second Judicial Circuit granted summary judgment in favor of Checkfree Services Corporation, finding that Florida’s corporate income tax cost of performance apportionment rule required the sourcing of receipts from Checkfree’s online bill pay services based on Checkfree’s own transactions and activities.
Checkfree acted as an agent for financial institution clients and facilitated online…
Wisconsin Tax Appeals Commission rejects taxpayer’s look-through sourcing position
By Scott Wright & Madison Ball on
Posted in Income Tax
The Wisconsin Tax Appeals Commission held that a taxpayer could not look through an intermediary and source receipts to the location of software use by end-users.
The taxpayer created database management system software to be used by the software developers. Epic Systems Corporation (Epic), a Wisconsin-based software developer, created and licensed software used in the…
Snowbirds beware: New York couple fails to establish new domicile in Florida
By Charlie Kearns & Sebastian Iagrossi on
Posted in Income Tax, New York
The taxpayers, originally residing in New York, were issued a tax assessment for unpaid income tax but they claimed they moved out of the state and settled in Florida in late 2018 (as part of their retirement plan) while still maintaining living quarters in New York. The taxpayer argued that they had changed their domicile…
Florida court upholds apportionment formula for airlines
By Ted Friedman & Madison Ball on
Posted in Income Tax
A Florida circuit court held for the Department of Revenue in a dispute over Florida’s apportionment formula applicable to companies providing transportation services in the state. Florida apportions income of transportation companies by multiplying the taxpayer’s income by a fraction, the numerator of which is “revenue miles in [Florida]” and the denominator of which is…
Pennsylvania Court clarifies IRS-triggered refund statute of limitations
By Laurin E. McDonald on
Posted in Income Tax
The Pennsylvania Commonwealth Court found that while a three-year statute of limitations generally governs the time for taxpayers to file a refund, a separate, more specific statute of limitations applies when a corporate taxpayer’s request for a refund is precipitated by a change to taxable income made by the IRS. The Court explained that the…
New Jersey rules regulation’s amendment retroactively cures unconstitutionality for pre-amendment tax years
By Alla Raykin on
Posted in Income Tax
The New Jersey Superior Court, Appellate Division upheld the application of New Jersey’s 2020 amendment to its royalty addback regulation retroactively to tax years prior to the regulation’s amendment. In 2020, New Jersey amended its regulation (N.J. Admin. Code § 18:7-5.18) to delete geographical limitations in the addback exception for royalty payments made to a…
Round two: New York upholds the convenience of the employer rule
By Chelsea Marmor on
Posted in Income Tax, New York
The Tax Appeals Tribunal upheld an ALJ’s determination that a taxpayer’s wages earned from working remotely in Connecticut were sourced to New York and subject to tax. For decades, New York has adopted the convenience of the employer test (Rule), which deems a nonresident who teleworks outside the state to be working at its employer’s…
Massachusetts Appellate Tax Board decision clarifies “manufacturing corporation” classification
By John Ormonde on
Posted in Income Tax
The Massachusetts Appellate Tax Board (ATB) found that an out-of-state footwear company qualified as a “manufacturing corporation” for purposes of the state corporate excise (income) tax despite outsourcing the manufacturing of its shoes to third parties. The consequence of the “manufacturing corporation” classification was that the taxpayer had to use a single-sales factor apportionment formula…