Shaking things up in state and local tax
Shaking things up in state and local tax
By Madison Barnett and Jonathan Feldman
The Illinois Supreme Court held that Illinois’ local Retailers’ Occupation Tax (ROT) sourcing regulations—which applied a bright-line test to assign sales to the location where the purchase order was accepted—were not supported by the controlling tax imposition statutes and thus were invalid. The taxpayer, like many others in Illinois, established…
By Zachary Atkins and Prentiss Willson
The Alaska Supreme Court held that a petroleum company and its subsidiaries were engaged in a unitary business and upheld the state’s use of an alternative apportionment formula for corporate income tax purposes. The taxpayer, Tesoro Corporation, was a petroleum refiner and marketer with its subsidiaries organized into five…
Click here to read our October 2013 posts on stateandlocaltax.com or read each article by clicking on the title. A printable PDF is also available here.
…
By Maria Todorova and Prentiss Willson
The Minnesota Tax Court held that computer software consulting and implementation services were not subject to sales tax in Minnesota. The taxpayer, SAP Retail, Inc., licensed enterprise resource planning software. It also provided consultation and implementation services to configure the software to a customer’s particular business activities. The court…
By Todd Betor and Andrew Appleby
The Illinois Department of Revenue granted a taxpayer’s request to use an alternative apportionment method, determining that application of the standard single sales factor formula did not fairly represent the market for the taxpayer’s goods, services or other sources of income. The taxpayer’s only sale during the year in…
By Mary Alexander and Andrew Appleby
The Tennessee Court of Appeals held a wide area network (WAN) service provided by IBM was not taxable because the true object of the service was not a “telecommunications service.” IBM’s WAN service was a technological infrastructure that enabled remote access to information by linking geographically separated computers. The…
In a 6-1 decision, the Illinois Supreme Court affirmed an Illinois Circuit Court holding that Illinois Public Act 96-1544 (The Click-Through Nexus Act), requiring out-of-state retailers to collect and remit use tax, violates the Internet Tax Freedom Act. Performance Marketing Ass’n v. Hamer, Docket No. 114496 (Oct. 18, 2013).
View the full Legal Alert
By Christopher Chang and Timothy Gustafson
The Massachusetts Department of Revenue issued a Letter Ruling stating that, for purposes of determining common control with regard to a combined report, the Department looks to actual voting control as opposed to voting power, which is the test for federal consolidated reporting. Under the Massachusetts combined reporting rules…
By Saabir Kapoor and Andrew Appleby
After the U.S. Court of Appeals for the Tenth Circuit denied an en banc rehearing on October 1, 2013, the Direct Marketing Association (DMA) is expected to bring suit in Colorado District Court to challenge the constitutionality of the Colorado law that requires out-of-state retailers without a physical presence…
By Madison Barnett and Prentiss Willson
The Indiana Department of Revenue determined in a Letter of Finding that an out-of-state information service provider must apportion its receipts from sales to Indiana customers to Indiana in a market-sourcing-like manner, even though the majority of its costs were incurred outside Indiana. The taxpayer provided information services electronically…
