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
Income Tax
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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…
Michigan Tax Tribunal holds business with only one location entitled to apportion income
By Charles Capouet on
Posted in Income Tax
On April 17, 2025, the Michigan Tax Tribunal held that a business with only one brick and mortar location was entitled to apportion its income on its city income tax return because it engaged in business activities outside of the city. In this case, a business with only one brick-and-mortar location (located in Lapeer, Michigan)…
Illinois appellate court holds subsidiary not an 80/20 company
By Alla Raykin on
Posted in Income Tax
An Illinois appellate court held that a PepsiCo, Inc. subsidiary—Frito-Lay North America, Inc. (FLNA)—was not an 80/20 company excluded from PepsiCo’s unitary group. Illinois excludes 80/20 companies for the unitary group, where such companies have over 80% of their payroll and property from outside the United States. After a restructuring, PepsiCo created a single-member LLC…
Nevada Department of Revenue cannot backtrack from its email agreement
By Jeffrey Friedman & Sebastian Iagrossi on
Posted in Income Tax
The Nevada Supreme Court found that the Nevada Department of Revenue’s (Department) attempt to ignore its email correspondence with a taxpayer violated “basic notions of justice and fair play.”
A Nevada statute requires that, in order to file a petition for judicial review of a tax deficiency, a taxpayer must first either pay the entire…
New Hampshire Court holds unitary combined group member may offset gains using another member’s losses
By Chelsea Marmor on
Posted in Income Tax
The Merrimack County Superior Court held that the carryback long-term capital losses of one member of a unitary combined group can be used to offset the long-term capital gains of a different member of the group for purposes of computing the group’s Business Profits Tax. The New Hampshire Department of Revenue Administration argued that the…