Noteworthy Cases

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The Ohio Supreme Court recently heard oral arguments in three cases that could test the constitutionality of the Ohio commercial activity tax (CAT). These cases turn on whether the CAT’s “bright-line” nexus standard violates the dormant Commerce Clause of the United States Constitution. The Ohio Department of Taxation argues, among other things, that the taxpayers&rsquo…

By Charles Capouet and Jeff Friedman

In a 4-4 decision, the U.S. Supreme Court affirmed the Nevada courts’ exercise of jurisdiction over the California Franchise Tax Board (FTB), but held, by a majority of the justices, that the taxpayer could only receive the damages Nevada provides for suits by private citizens against Nevada agencies. The…

By Evan Hamme and Marc Simonetti

The Texas Comptroller upheld a taxpayer’s separate Franchise Tax return filing position, rejecting an Administrative Law Judge’s finding that the taxpayer and its affiliate shared a strong centralized management structure that required a unitary combined report. Although the companies were commonly owned and shared an administrator, the Comptroller found…

By Elizabeth Cha and Charlie Kearns

In Hegar v. CheckFree Serv. Corp., a Texas Court of Appeals affirmed the trial court’s decision and held that the taxpayer’s online bill pay service was not a taxable data processing service for Texas sales tax purposes. Based on the trial court’s uncontested factual findings, the taxpayer provided…

By Stephen Burroughs and Michele Borens

The Circuit Court of Henrico County, Virginia, recently affirmed a ruling by the Commissioner of the Virginia Department of Taxation (Commissioner) that determined a cable provider’s set-top boxes are not “machines” for local property tax purposes and therefore not subject to Henrico County property tax. Virginia statute classifies property…

By Ted Friedman and Leah Robinson

The Michigan Court of Appeals reversed a trial court ruling and held that three companies did not constitute a statutorily defined “unitary business group” for Michigan Business Tax (MBT) purposes. It was undisputed that there was insufficient “direct” ownership among the companies to give rise to a “unitary business…

By Charles Capouet and Todd Lard

The New Jersey Tax Court ruled on the sourcing of mortgage-related receipts received by a bank and also held that the Division of Taxation could not throw out receipts from the bank’s denominator. The taxpayer originated loans for its New Jersey borrowers through its New Jersey lending office employees…

Sutherland SALT has launched the “SALT Scoreboard,” a quarterly publication that tracks significant state tax litigation and controversy developments and tallies the results of taxpayer wins and losses across the country. Our quarterly publication will feature Sutherland’s observations regarding important state tax decisions and will identify trends by issue, state and forum as they emerge…

By Zack Atkins and Eric Coffill

The Alabama Tax Tribunal concluded that an out-of-state retailer was required to collect and remit use tax on the sales of books and educational materials to in-state teachers and students, and that neither the Due Process Clause nor the Commerce Clause impeded the Alabama Department of Revenue’s authority to…