Shaking things up in state and local tax
Shaking things up in state and local tax
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…
By Scott Booth and Andrew Appleby
Although states continue to challenge the validity of captive insurance companies, Wendy’s has notched several taxpayer victories. In a win involving Scioto Insurance Company (Scioto), Wendy’s captive insurance company, the Illinois Appellate Court held that Scioto constituted a bona fide insurance company that was properly excluded from Wendy’s combined…
By Zachary Atkins and Douglas Mo
A Florida trial court ruled that imposing different tax rates on cable and satellite television services did not violate the Commerce Clause or the Equal Protection Clause of the U.S. Constitution. The statute in question imposes a statewide communications services tax at a higher rate on satellite service than…
By Shane Lord and Timothy Gustafson
The Tennessee Court of Appeals held that a taxpayer’s wholesale service of converting end-user information into Internet protocol was an “enhanced” service for which the true object or primary purpose was to provide the non-taxable service of “Internet access” and not the taxable service of “telecommunications.” Adopting definitions set forth…
Click here to read our September 2013 posts on stateandlocaltax.com or read each article by clicking on the title. A printable PDF is also available here.
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By Jessica Kerner and Andrew Appleby
The Virginia Tax Commissioner concluded that a taxpayer was not permitted to deduct a portion of the royalties it had paid to an affiliate by narrowly construing the “subject to tax” exception to the state’s addback statute. This exception provides that the deduction will be permitted if the “corresponding…
By Zachary Atkins and Douglas Mo
The California Supreme Court held that the State Board of Equalization (SBOE) violated the state’s Administrative Procedures Act (APA) when it promulgated Cal. Code Regs., tit. 18, § 474 (Rule 474). Rule 474, a specialized property tax rule relating to the assessment of petroleum refineries, creates a rebuttable presumption…
By Kathryn Pittman and Andrew Appleby
A Washington Superior Court held that using leased specialized railroad cars to transport products in Washington did not rise to the level of “substantial nexus.” The taxpayer, a California company, sold food products into the state by transferring its products into specially leased railroad cars that traveled to Washington.
