Governor Glenn Youngkin has issued his proposed Virginia 2024 – 2026 Budget Bill. The Budget Bill would make three notable changes to Virginia’s tax structure, all of which would take effect on January 1, 2025: (1) increase the sales and use tax rate; (2) expand the sales and use tax base to digital products; and
Landmark state tax cases: The impact of Moorman on apportionment
In this episode of the SALT Shaker Podcast, Eversheds Sutherland Associate Jeremy Gove welcomes Partner Jeff Friedman for another discussion of a landmark state tax case.
For this installment, Jeff and Jeremy jump into Moorman Manufacturing Co. v. Bair, discussing the history of 3-factor apportionment, and how the Moorman decision paved the way for
Pennsylvania Supreme Court holds city wage tax not required to credit Delaware state income tax
The Pennsylvania Supreme Court held that the City of Philadelphia is not required to provide a city wage tax credit for income tax payments that a resident made to another state. For the purposes of a dormant Commerce Clause analysis, the court found that state and local taxes do not need to be considered in
Pennsylvania BF&R rejects request to calculate sales factor by looking through to customers’ sales
On July 13, 2023, the Pennsylvania Board of Finance and Revenue (“BF&R”) denied a pharmaceuticals developer’s corporate net income tax refund claim based on adjustments to its apportionment formula and taxable income. The taxpayer filed, and the Pennsylvania Department of Revenue denied, a refund claim for the 2019 tax year on three grounds: (1) the
Washington Court of Appeals gives no credit to bank’s physical presence and apportionment arguments
The Washington Court of Appeals affirmed a Board of Tax Appeals decision that found an out-of-state bank had a sufficient physical presence in the state to be subject to Washington’s Business & Occupation (B&O) tax. The bank did not have any employees or property in Washington, but issued credit cards, including private label credits cards
What the doctor ordered: Maine court apportions drug company’s income on a “market member basis”
The Maine Supreme Judicial Court held that a prescription drug company’s income should be apportioned based on the location where its prescription drugs are received, rather than the headquarters locations of the health plans or employers paying for the drugs.
The drug company sought income tax apportionment based on a “market client basis,” arguing that
Time’s up: North Carolina DOR’s failure to timely issue required written statement invalidates assessment
A North Carolina Administrative Law Judge held that the Department of Revenue did not have the authority to adjust the taxpayer’s net income because the Department failed to timely issue a statutorily required written statement.
The Department believed the taxpayer had not accurately reported income properly attributable to North Carolina due to intercompany transactions that
South Carolina Court upholds Department’s use of combined reporting under alternative apportionment statute
The South Carolina Administrative Law Court (ALC) held that the South Carolina Department of Revenue could require Tractor Supply and its affiliates to file a combined return notwithstanding that South Carolina law requires corporate taxpayers to file tax returns on a separate-entity basis. In a factually intensive ruling, the ALC found that the Department met
California Office of Tax Appeals finally drops the beet, holds that activities related to deductible income included in apportionment factor
In the pending-precedential decision Appeal of Southern Minnesota Beet Sugar Co-op., the California Office of Tax Appeals (OTA) ruled that payroll, property and sales that generated deductible agricultural cooperative income under Cal. Rev. & Tax. Code Section 24404 must be included in the taxpayer’s corresponding payroll, property and sales factors.
The California Franchise Tax
Colorado Department of Revenue issues ruling that infrequent sales of real property are excluded from Colorado apportionment factor
The Colorado Department of Revenue issued a private letter ruling concluding that a taxpayer’s income arising from the sale of Colorado real property is apportionable income because the property was used in the taxpayer property rental business. However, the proceeds from such sales are not “receipts” and thus not included in its Colorado apportionment factor