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On remand from the Maryland Court of Special Appeals, the Maryland Tax Court held that an unauthorized insurance company owned by Macy’s, was exempt from Maryland corporate income tax. During the years at issue, Leadville, a Vermont captive, did not earn any Maryland insurance or reinsurance premiums but had substantial interest income from intercompany loans…

This is the second edition of the Eversheds Sutherland SALT Scoreboard for 2020. Since 2016, we have tallied the results of significant taxpayer wins and losses and analyzed those results. This edition of the SALT Scoreboard includes a discussion of the Mississippi Supreme Court’s decision on agency deference, insights regarding the First Amendment’s application to…

The California Court of Appeal held that California income tax applies to the entire amount of trust income that is derived from California sources, even though a trust is managed in part by a non-resident trustee. The taxpayer had requested a refund on income taxes paid on capital gains, claiming that the income was incorrectly…

In a recently issued revenue ruling, the Tennessee Department of Revenue determined that a taxpayer’s digital services provided to other businesses were taxable “specified digital products,” a broad term based on definitions (and subject to detailed operating rules) in the Streamlined Sales and Use Tax Agreement. Sellers of business-to-business digital services should review this ruling…

The Delaware Supreme Court reversed a lower court’s ruling and held that Overstock.com was not liable for nearly $7 million in damages because there was insufficient evidence to show that Overstock violated the Delaware False Claims Act by not reporting gift card unredeemed balances. The Plaintiffs – Delaware and the whistleblower who brought this case…

In a recently released letter ruling, the Georgia Department of Revenue concluded that charges for the electronic delivery of medical records, and services related to the management and processing of medical records, are not subject to sales and use tax, while charges for transferring medical records delivered on paper or another “tangible format” are subject…

The Ninth Circuit concluded that a plaintiff had standing to continue her lawsuit against a clothing company alleging that the company wrongly failed to pay interest on refunded Alaska sales taxes. After a related lawsuit was filed alleging that sales taxes were incorrectly collected, LuLaRoe, Inc. refunded the plaintiff $531.25 in sales tax charges. The…

On June 5th, the Maryland Court of Appeals held that a reduced interest rate on refunds paid to taxpayers as a result of the U.S. Supreme Court’s decision in Comptroller of Maryland v. Wynne did not violate the U.S. Constitution’s dormant Commerce Clause.

In 2018, the U.S. Supreme Court held that a Maryland statute that…

The North Carolina Supreme Court affirmed a lower court decision that held that a manufacturer of brake pads used by railroads did not qualify for an exception to the state’s standard three-factor apportionment formula that allows “public utilities” to instead apportion their income using a single-sales factor formula.

In February 2019, the North Carolina Superior…

On May 22, 2020, the Idaho Supreme Court held that the gain realized by a corporate holding company on the sale of its 78.54 percent ownership interest in an LLC was nonbusiness income and therefore not subject to apportionment in Idaho. The LLC was formed in 2003 and manufactured and sold tangible personal property. The…