Shaking things up in state and local tax
Shaking things up in state and local tax
By Shane Lord and Prentiss Willson
The Missouri Administrative Hearing Commission held that a telephone company’s interest income received from its parent company was passive, non-Missouri source income and thus excludible from apportionable income as nonbusiness income. The interest income at issue was related to a note between the taxpayer and its parent company pursuant…
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By Zachary Atkins and Douglas Mo
A California appellate court held that an ice cream maker’s property tax appeal involving an alleged failure to make an external obsolescence adjustment was subject to the “substantial evidence” standard of review. The taxpayer asserted that certain production equipment used in its novelty product lines was underutilized as a…
By Todd Betor and Pilar Mata
On July 3, 2013, the Michigan Supreme Court granted International Business Machines Corporation’s (IBM) motion for leave to appeal the Court of Appeals’ November 20, 2012, judgment in favor of Michigan in International Business Machines v. Department of Treasury, Michigan Supreme Ct., Case No. 146440. Consequently, the highest…
By Kathryn Pittman and Andrew Appleby
The Arizona Department of Revenue determined that a taxpayer providing online backup and restoration services was subject to Arizona’s transaction privilege tax (TPT) after concluding that the receipts from such services were taxable as rentals of prewritten software. The taxpayer provided services that automatically backed up and restored files. As…
By Mary Alexander and Prentiss Willson
The Arizona Department of Revenue determined in a private letter ruling that gross receipts from “renting” prewritten software available online are subject to Arizona’s transaction privilege tax (TPT). The definition of tangible personal property for purposes of the TPT includes the electronic delivery of software. Thus, according to the…
By Suzanne Palms and Andrew Appleby
The Arizona Department of Revenue determined that shipping and handling fees were subject to Arizona’s transaction privilege tax (TPT). The company sold tangible personal property via the Internet. The company’s affiliates fulfilled the orders, which included activities such as labeling, packaging and shipping the items via common carrier. The…
By David Pope and Prentiss Willson
The New Jersey Division of Taxation concluded in a technical bulletin that sales of cloud computing services are not subject to sales and use tax in New Jersey. Although this is not a change to the Division’s position, the bulletin specifically identifies software as a service (SaaS), platform as…
By Nicole Boutros and Andrew Appleby
In a case of first impression interpreting when substantial intercorporate transactions are present for purposes of New York’s mandatory combined reporting provisions, a New York State Division of Tax Appeals Administrative Law Judge (ALJ) concluded that the taxpayers could not file on a combined basis. In 2007, New York…
By Stephen Burroughs and Timothy Gustafson
The Texas Comptroller determined that receipts received for the delivery of satellite programming to Texas subscribers should be sourced to the site of the subscriber’s set-top box for apportionment purposes. The taxpayer provides direct broadcast satellite television programming to subscribers in Texas and across the United States. For the…
