Shaking things up in state and local tax
Shaking things up in state and local tax
By Nick Kump and Charlie Kearns
The Ohio Board of Tax Appeals held that medical transcription services are taxable automatic data processing services, rather than tax-exempt personal or professional services, because of the minimal level of personal skill involved in transcription services. Under Ohio law, personal or professional services are not subject to Ohio sales…
By Liz Cha and Timothy Gustafson
In its first decision on combined unitary reporting since Vermont adopted combined reporting in 2006, the Vermont Supreme Court held that the AIG insurance group was not unitary with its wholly owned ski resort subsidiary, Stowe Mountain Resort. Applying the U.S. Supreme Court’s test for unity articulated in Mobil…
By Samantha Trencs and Open Weaver Banks
The Texas Comptroller of Public Accounts and the New York Courts have treated a former in-house attorney turned whistleblower very differently—Texas made a substantial payment to the individual, and New York kicked him to the proverbial curb.
The Texas Comptroller of Public Accounts paid $117,000 to David Danon…
By Zachary Atkins and Marc Simonetti
The U.S. Court of Appeals for the Second Circuit held that the attorney-client privilege and work-product doctrine protected legal memoranda prepared by an accounting firm that were disclosed to third parties. The Schaeffler Group sought to refinance its acquisition debt held by a consortium of banks and restructure its…
By Nick Kump and Timothy Gustafson
The Wisconsin Tax Appeals Commission overturned a $2.4 million assessment against an intellectual property (IP) holding company, ruling that the company’s income-producing activities for Wisconsin sales factor purposes – IP licensing and related activities – occurred entirely outside of the state. The taxpayer, a wholly owned subsidiary of the…
By Zack Atkins and Timothy Gustafson
The Oregon Tax Court held that the Multistate Tax Compact (Compact), which allows for an equally weighted, three-factor apportionment formula, was an illusory contract and its terms had been effectively disabled by the Oregon Legislature. The statute in question, ORS 314.606, provides that in case of conflict the provisions…
By Charles Capouet and Timothy Gustafson
The Oregon Supreme Court held that an out-of-state taxpayer providing voice and data telecommunications services over a global network was required to use a transactional approach to source sales of other than tangible personal property for Oregon sales factor purposes under Oregon’s costs of performance method. Sales are sourced…
Today, the U.S. Supreme Court vacated the decision of the Massachusetts Supreme Judicial Court in First Marblehead Corp. v. Commissioner of Revenue and remanded the case back to the court for reconsideration in light of the holding in Comptroller of the Treasury v. Wynne. In First Marblehead, a taxpayer was denied the ability…
By Mike Kerman and Andrew Appleby
The Tennessee Supreme Court held that the Tennessee Department of Commerce and Insurance (Department) improperly imposed retaliatory taxes on Pennsylvania-domiciled insurance companies doing business in Tennessee, because Pennsylvania workers’ compensation assessments were not imposed on Tennessee insurance companies, but rather on the insurance companies’ policyholders. Tennessee Code § 56-4-218…
In a significant rebuff of the California State Board of Equalization (BOE), the California Second District Court of Appeal held that a manufacturer’s sale of software on tangible media was exempt from sales tax under the technology transfer agreement (TTA) statutes. Lucent Technologies, Inc. v. State Bd. of Equalization, No. B257808, 2015 WL 5862533.
