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The Maryland Court of Special Appeals upheld the Comptroller’s determination that an out-of-state pet food seller did not qualify for Public Law 86-272 protection because the seller’s collection of competitive information in Maryland by its employees was not ancillary to solicitation of sales and not de minimis. The out-of-state pet food seller maintained a limited…

The New Mexico Administrative Hearings Office determined that UPS may depart from the statutory apportionment method for trucking companies, based on mileage driven in the state, because it produces a result that bears no rational relationship to UPS’s New Mexico business activity.

Echoing a 1992 Montana Supreme Court case also involving UPS, the Administrative Hearings…

The Utah Supreme Court upheld the constitutionality of Utah’s taxing scheme, which provides a credit against taxes paid to other states, but not against taxes paid to foreign governments.

The taxpayers – Utah residents who owned interests in a Subchapter S corporation doing business throughout the world – argued that this scheme taxed a disproportionate…

The Maryland Tax Court reversed the Comptroller’s disallowance of NOLs and essentially struck down a regulation that limited the usage of pre-nexus NOLs. The Comptroller disallowed the taxpayer’s use of NOLs accumulates by entities with no nexus in Maryland that subsequently merged into the taxpayer. The Comptroller relied on a regulation enacted in 2007 that…

Massachusetts Court of Appeals held that a taxpayer could not rely on timely applications for refund of deficiency assessments to also seek refund resulting from alleged overstatement of sales factor in corresponding years’ returns, where the initial application for abatement did not include the sales factor argument and statute of limitations had since lapsed.

The…

The Montana Supreme Court held that the Department erred in determining that Exxon Mobil was entitled to only an 80% exclusion for dividends received from domestic corporations excluded from the water’s-edge combined return, and concluded that 100% of the actual dividends it received from such entities are excluded from income. Pursuant to Montana statute, Exxon…

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held that the state’s alternative minimum tax (known as the “Alternative Minimum Assessment,” or AMA) – which was repealed for tax years beginning on or after January 1, 2018 – is preempted by P.L. 86-272, a federal statute that bars states from imposing a net income tax…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

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 Colorado Supreme Court issued two decisions simultaneously holding that neither Oracle Corporation nor Agilent Technologies, Inc. were required to include in their combined income tax returns holding companies that did not meet the statutory definition of an “includable C corporation.” To be included in a combined return in Colorado, an affiliate must have more…