Shaking things up in state and local tax
Shaking things up in state and local tax
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…
By Mike Penza and Madison Barnett
The New York Supreme Court, Albany County, held that New York’s unapportioned vehicle registration fees violated the Commerce Clause. The court found that the flat fees—imposed on all carriers operating motor vehicles in New York—were indistinguishable from those struck down by the U.S. Supreme Court in American Trucking Ass’ns.…
By Stephanie Do and Todd Lard
The U.S. District Court for the Eastern District of Kentucky preliminarily enjoined Kentucky from denying tax incentives to a religious-based theme park. The court held that excluding the company from the state’s tax incentives program on the basis of the company’s religious beliefs, message and conduct violated the Establishment and…
By Hanish Patel and Open Weaver Banks
A New York Division of Tax Appeals Administrative Law Judge (ALJ) held that an electricity producer’s purchases, installations and repairs of “step-up transformers” were not subject to sales and use tax because the transformers were “used directly” in the production of electricity. Step-up transformers are used to “step…
By Evan Hamme and Marc Simonetti
The Texas Court of Appeals held that sovereign immunity bars Machete’s Chop Shop’s declaratory judgment action because Machete failed to plead that the Texas Film Commission acted ultra vires when it denied Machete’s grant application for the 2010 film, Machete. Machete alleged that the Texas Film Commission lacked authority…
By Chris Mehrmann and Scott Wright
The Alabama Tax Tribunal invalidated a regulation requiring a direct pay permit holder, Tyson Chicken, Inc. (Tyson), to purchase all items tax-free, finding that the regulation was both unreasonable and unduly burdensome. Although Tyson purchased most items tax-free using its direct pay permit, Tyson employees used corporate credit or…
By Jessica Eisenmenger and Amy Nogid
The West Virginia Office of Tax Appeals (OTA) upheld a sales tax assessment against an out-of-state company that provided taxable outside maintenance services such as snow removal and window cleaning in the state via independent contractors. The Administrative Law Judge reasoned that since “nothing happens” unless the independent contractors…
By Stephanie Do and Carley Roberts
The U.S. Court of Appeals for the Eleventh Circuit affirmed dismissal of a taxpayer’s complaint, arising from the Alabama Department of Revenue’s assessment and collection of state income tax, for lack of subject matter jurisdiction under the Tax Injunction Act (TIA). The court held that the TIA prohibited…
