Shaking things up in state and local tax
Shaking things up in state and local tax
By Charles Capouet and Andrew Appleby
A New York State Division of Tax Appeals ALJ determined that payments by a corporation to its captive insurance company did not qualify as deductible insurance premiums because the arrangement lacked risk shifting and risk distribution. The taxpayer primarily owned and operated convenience stores and gas stations, and insured…
By Evan Hamme and Andrew Appleby
The Oklahoma Supreme Court held that an initiative to amend the state’s constitution does not violate the state’s constitutional rule that a public vote to amend the constitution must address only one general subject (one general subject rule). Although the proposed constitutional amendment contains multiple sections making multiple proposals…
By Samantha Trencs and Eric Tresh
The Michigan Court of Appeals held that the mandatory apportionment provision of the Michigan Single Business Tax Act did not impliedly repeal Michigan’s enactment of the Multistate Tax Compact’s alternative apportionment election provision. In addition, the court held that the Single Business Tax (SBT) was an income tax under…
By Todd Betor and Jonathan Feldman
On February 11, the Wisconsin Court of Appeals held that the receipts earned by Orbitz, an online travel company, from its services and markups for reserved rooms are not subject to sales tax. Specifically, the court determined that Orbitz is not “furnishing” rooms or lodging for purposes of Wisconsin…
By Mike Kerman and Andrew Appleby
The Louisiana Court of Appeals held that a paperboard products manufacturer was entitled to refunds of sales tax it paid on purchases of chemicals it used in the manufacturing process under the “further processing” exclusion. The chemicals met the exclusion’s three-part test because they: (1) were identifiable components of…
Yesterday, the U.S. Court of Appeals for the Tenth Circuit issued its opinion in Direct Marketing Association v. Brohl, reversing the district court’s order granting summary judgment. The Tenth Circuit held that Colorado’s notice and reporting requirements imposed on non-collecting retailers did not violate the dormant Commerce Clause because they neither discriminated against, nor …
By Stephen Burroughs and Tim Gustafson
The Massachusetts Supreme Judicial Court denied a freight company’s Commerce Clause challenge to the application of an unapportioned use tax on its vehicles purchased out-of-state but used in Massachusetts. The company used its trucks to deliver freight in multiple states, but the court upheld taxation of the vehicles’ full…
By Nicole Boutros and Jeff Friedman
The Director of the Arizona Department of Revenue affirmed an Administrative Law Judge determination that a taxpayer must pay the Transaction Privilege Tax on sales of access to the taxpayer’s subscription-based online research service. The Director reasoned that these sales were taxable as rentals of tangible personal property—and not…
By Zack Atkins and Eric Coffill
A Virginia trial court held that royalties paid to related members that are reported to, but not taxed by, other states do not qualify for the exception to the state’s corporate income tax addback statute. In granting summary judgment in favor of the Virginia Department of Taxation, the court…
By Ted Friedman and Carley Roberts
The West Virginia Office of Tax Appeals (OTA) ruled that an out-of-state corporation, with no physical location or employees in West Virginia, owed sales and use tax on sales of garage equipment in the state. The OTA determined that the corporation had nexus with West Virginia based on its…
