Shaking things up in state and local tax
Shaking things up in state and local tax
By Zachary Atkins and Pilar Mata
The Louisiana Supreme Court rejected the Louisiana Department of Revenue’s attempt to look through a foreign single member limited liability company (SMLLC) and assess its owner for unpaid sales tax. The owner, a resident of Louisiana, formed the SMLLC under the laws of Montana and caused it to purchase…
By Stephanie Do and Andrew Appleby
The Texas Comptroller determined that an integrated circuit manufacturer’s purchases of software tools used to design and test the software code embedded in its semiconductor chips did not qualify for the manufacturing exemption for sales and use tax purposes. For Texas’s manufacturing exemption, software manufacturing begins with software design…
By Sahang-Hee Hahn and Timothy Gustafson
The New York State Tax Appeals Tribunal ruled the New York State Department of Taxation and Finance could not decombine taxpayers’ New York combined filing group for tax years 2002-2004. The Tribunal’s ruling upholds the ALJ’s determination that there was a sufficient flow of value between entities engaged in…
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By Derek Takehara and Andrew Appleby
The Virginia Tax Commissioner issued a taxpayer-favorable ruling addressing Virginia sales and use tax on (1) computer software sold to manufacturers and (2) cloud computing services. The Commissioner determined that Virginia’s manufacturing exemption can apply to sales of computer software if the software is used directly in the manufacturer’s…
By Kathryn Pittman and Timothy Gustafson
The Oklahoma Supreme Court held Oklahoma’s deduction for capital gains arising from the sale of a company headquartered in the state for three or more years does not violate the dormant commerce clause of the U.S. Constitution. The taxpayer, a California company with its headquarters in Florida, sold…
By Jessica Kerner and Pilar Mata
The Michigan Court of Claims held that cloud computing, or software as a service (SaaS), is a nontaxable service rather than a taxable use of prewritten software. The taxpayer, an insurance company, entered into various transactions that provided the taxpayer with remote access to third parties’ software. The Michigan…
By Zachary Atkins and Pilar Mata
A California Court of Appeal held that a mobile telecommunications service provider could pursue refund actions against local taxing authorities in California without first having to refund the disputed taxes to its customers. Pursuant to a settlement agreement, New Cingular, the provider, filed refund claims against 132 California cities…
By Christopher Chang and Pilar Mata
The New Jersey appeals court ruled that BIS LP, Inc. (BIS) was entitled to receive a New Jersey Corporation Business Tax (CBT) refund in the ongoing BIS litigation saga. In 2011, BIS, an out-of-state limited corporate partner, prevailed before the appeals court, securing a decision that found BIS lacked…
By Jonathan Maddison and Andrew Appleby
The Commonwealth Court of Pennsylvania held that tax records detailing yearly totals of room rental tax and other occupancy data submitted by hotel taxpayers to a locality were not subject to disclosure under Pennsylvania’s Right-to-Know Law (RTKL). A newspaper, under the RTKL, requested that Lancaster County provide detailed tax…
