Noteworthy Cases

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By Nick Kump and Amy Nogid

The Colorado Department of Revenue (Department) released a non-binding general information letter,  concluding that a marketplace provider’s payment of sales tax on transactions involving “jointly responsible” third-party retailers discharges the obligations of the third-party retailers to collect and remit sales tax. By statute, the Department has discretionary authority to…

By Christopher Lutz and Jeff Friedman

On December 15, 2016, the Tennessee Joint Government Operations Committee held a hearing regarding the governor’s proposal to establish an economic nexus standard for the state sales tax. Under the proposal, remote sellers would be subject to collection obligations in the state if their Tennessee sales exceed $500,000. The…

By Charles Capouet and Andrew Appleby

The Washington Supreme Court held that drop shipments and sales from out-of-state are subject to the Washington business and occupation (B&O) tax even when an in-state office was not involved in placing or completing the sales. A wholesaler of electronic components and computer technology worldwide sold products through its…

By Stephen Burroughs and Maria Todorova

The Commonwealth Court of Pennsylvania recently reaffirmed its decision that Level 3’s network infrastructure services (including local dial networks, telephone numbers and modems, i.e., Internet “backbone”) sold to retail Internet service providers (ISPs) constitute non-taxable Internet access services. The Commonwealth Court previously held that the taxpayer’s facility was an…

By Jessica Allen and Jonathan Feldman

The New York City Tax Appeals Tribunal administrative law judge (ALJ) determined that a taxpayer’s receipts for consulting services should be allocated based on where the services were rendered, not where the solicitation and payment for the services occurred. The taxpayer’s non-commissioned salespeople entered into lump-sum subscription agreements with…

By Elizabeth Cha and Timothy Gustafson

On October 26, 2016, the South Carolina Court of Appeals reversed a lower court ruling and determined the Department of Revenue (Department) failed to satisfy its burden of showing that the statutory apportionment formula did not fairly represent Rent-A-Center West Inc.’s (RAC) business activities in South Carolina. This case…

By Douglas Upton and Andrew Appleby

The New Jersey Tax Court determined that credit card issuers must source to New Jersey all of their interest and interchange fee receipts, and half of their credit card service fees, from New Jersey accountholders. The Tax Court concluded that the Division of Taxation’s regulations required the taxpayers to…

By Zachary Atkins and Open Weaver Banks

The New Jersey Tax Court held that apportioning all of a company’s income to New Jersey for corporate business tax purposes, even with the allowance of a credit for taxes paid to separate-return states, failed to fairly reflect the company’s business activities in New Jersey.  The court also…

By Charles Capouet and Maria Todorova

The Franklin County Circuit Court held that Netflix’s subscription-based streaming video service was not subject to Kentucky’s gross revenues tax, excise tax and school tax (telecommunications taxes) imposed on “multichannel video programming service” (MVPS).  Under Kentucky law, MVPS is programming “provided by or generally considered comparable to programming provided…

By Nicole Boutros and Marc Simonetti

The Illinois Appellate Court held that a defendant out-of-state retailer was not liable under the state’s False Claims Act because it conducted a good faith inquiry into its use tax collection obligations for both its Internet and catalog sales.  The defendant had franchisees operating in Illinois and sold products…