2023 was a year of brisk activity in the state tax world. States remained focused on the digital economy, with numerous new tax proposals being offered in legislatures. Departments of Revenue were also busy issuing regulations and guidance—and in the case of New York’s corporate tax reform regulations, almost a decade in the making. State litigation
Tennessee’s ten cents: Tennessee court holds computer software licenses not subject to business tax
The Tennessee Chancery Court for the Twentieth Judicial District held that software licenses are intangible property and thus the gross receipts from their sale are not subject to tax under Tennessee’s Business Tax Act.
The taxpayer is a software company engaged in the business of selling and licensing software used for various corporate and back
SALT Scoreboard – Third Quarter 2023
This is the third edition of the Eversheds Sutherland SALT Scoreboard for 2023. Since 2016, we have tallied the results of significant taxpayer wins and losses and analyzed those results.
View our Eversheds Sutherland SALT Scoreboard results from the third quarter of 2023 now!
Sourcing: The CAT receipts are in Ohio if the patient is in Ohio
The Ohio Board of Tax Appeals denied an out-of-state healthcare organization’s apportionment of the Commercial Activity Tax related to healthcare services.
The taxpayer sought to apportion its gross receipts related to laboratory services and healthcare provider services based on where the taxpayer’s costs were incurred. The Board rejected the taxpayer’s position and found that the
Fashion faux pas: Ohio Board of Tax Appeals rejects apparel wholesaler’s appeal
The taxpayer, a designer, marketer, and wholesaler of apparel, footwear, jeans, and other fashion accessories, shipped products to Ohio-based distribution centers of major retailers and paid the commercial activity tax for all items shipped to the distribution centers, even those that were ultimately received by customers outside of Ohio. The taxpayer applied for a refund
SALT Scoreboard – Second Quarter 2023
This is the second edition of the Eversheds Sutherland SALT Scoreboard for 2023. Since 2016, we have tallied the results of significant taxpayer wins and losses and analyzed those results.
View our Eversheds Sutherland SALT Scoreboard results from the second quarter of 2023 now!
When being an ostrich is not enough: UK tailor wins dismissal of Illinois qui tam action
An Illinois Appellate Court affirmed a circuit court’s dismissal of a qui tam action filed against a United Kingdom-based tailoring shop. The court held that although the tailor’s failure to investigate its use tax collection obligations was “an ostrich-type situation,” the tailor nevertheless did not violate the Illinois False Claims Act.
The Illinois False Claims
Washington Court of Appeals holds pharmacy benefit provider meets B&O Tax insurance business exemption
On February 27, 2023, the Washington Court of Appeals held that a provider of pharmacy services and pharmacy benefits services (PBM) to its affiliate’s enrollees met the insurance business exemption to the Business and Occupation Tax because its activities were at least functionally related to insurance business. The taxpayer fulfilled the PBM services required by
Louisiana Board of Tax Appeals holds Internet Tax Freedom Act prohibits New Orleans tax on online storage service
On January 12, 2023, the Louisiana Board of Tax Appeals held that sales of remote personal electronic storage capacity services were not subject to the New Orleans French Quarter Economic Development District sales and use tax. A federal statute, the Internet Tax Freedom Act, prohibits states and political subdivisions from imposing taxes on Internet access.
Grounded: D.C. Court of Appeals Holds reversionary interests in land improvements subject to transfer and recordation taxes
On December 29, 2022, the District of Columbia Court of Appeals held that transfer and recordation taxes were due on the portion of consideration from a sale of land and related improvements related to reversionary interests in land improvements. The taxpayers argued that the acquisition consisted of two distinct steps: (1) taxable land sales, via