Shaking things up in state and local tax
Shaking things up in state and local tax
By Olga Goldberg and Andrew Appleby
The Texas Court of Appeals held that a taxpayer was not entitled to elect the Multistate Tax Compact (MTC) three-factor formula because the Texas franchise (margin) tax is not an “income tax,” as defined in the MTC. Specifically, the court ruled that the franchise tax is not…
By Stephen Burroughs and Amy Nogid
The Superior Court of Arizona, Maricopa County, rejected the Department of Revenue’s request that rental car companies be granted only prospective relief from the court’s earlier decision which declared the car rental charge illegal. The voter-approved surcharge was enacted for the Arizona Tourism and Sports Authority to finance the…
Sutherland Asbill & Brennan LLP invites you to join us for a State and Local Tax Roundtable in Houston, Texas on September 10.This program will cover a variety of topics, including:
By Olga Goldberg and Madison Barnett
The Texas Court of Appeals ruled that Rent-A-Center is primarily engaged in retail trade and thus qualifies for the lower 0.5% franchise tax rate available to retailers and wholesalers. The Comptroller argued that the rent-to-own business is a rental service rather than the sale of merchandise in a retail…
By Chris Mehrmann and Open Weaver Banks
A New York appellate court denied a nuclear power company’s bid for manufacturing tax credits, finding that equipment used at two power plants to produce steam and water during the electricity generation process was not used for manufacturing. The taxpayer argued that the process of creating steam and…
The Michigan Supreme Court held that an electric utility’s transmission and distribution equipment used for both taxable and exempt purposes qualifies for a partial sales and use tax exemption. See Detroit Edison Co. v. Dept. of Treasury, No. 148753 (Mich. July 22, 2015). This marks the latest in a line of cases addressing whether…
By Michael Penza and Andrew Appleby
The California Court of Appeal held that California’s disparate treatment of intrastate and interstate unitary businesses discriminated against interstate commerce. California requires taxpayers engaged in a unitary business within and without California to calculate their taxable income using combined reporting, but provides taxpayers engaged in a unitary business wholly…
By Stephen Burroughs, Jonathan Feldman and Open Weaver Banks
In a significant taxpayer win, the Massachusetts Appellate Tax Board (ATB) held that intercompany interest payments from a wholly owned subsidiary to Massachusetts Mutual Life Insurance Company (MassMutual) were bona fide loans and were deductible for excise tax purposes. The subsidiary (HoldCo) was a holding…
By Madison Barnett and Jonathan Feldman
Eight months ago, the Georgia Tax Tribunal held in Rosenberg that the Texas franchise tax (TFT) is a tax “on or measured by income” that qualifies for the pass-through entity owner’s subtraction modification available to individual Georgia residents (See prior coverage). Practitioners have been anxiously awaiting word…
By Evan M. Hamme and Madison J. Barnett
The Washington Court of Appeals upheld a broad application of the Washington Business and Occupation (B&O) tax to sales between an out-of-state seller and out-of-state purchasers when the products are delivered in Washington. Although the taxpayer maintained a research and product development facility in Washington, none of…
