Shaking things up in state and local tax
Shaking things up in state and local tax
By Maria Todorova and Jack Trachtenberg
The U.S. District Court for the Southern District of Ohio ruled that the Tax Injunction Act (TIA) served as a jurisdictional bar, depriving the court of subject matter jurisdiction in a case involving claims of a discriminatory real property foreclosure proceeding and unpaid property taxes. The taxpayers challenging the…
We hope you enjoy this very special edition of the Sutherland SALT Shaker newsletter. In this issue:
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As March comes to a close, we invite you to read all of our articles from the past month here on our website, or read each article by clicking on the title. If you prefer, you may also view a printable PDF version.
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By Sahang-Hee Hahn and Prentiss Willson
The New York State Department of Taxation and Finance ruled in an Advisory Opinion that a Virginia corporation was subject to New York corporation franchise tax because it hired independent contractors to store its consigned inventory and to solicit orders from and deliver products to New York customers. In…
By Christopher Chang and Timothy Gustafson
A prepaid telephone card and long-distance service provider’s attempt to source phone card sales receipts outside of Texas was rebuffed by the Texas Comptroller because the taxpayer failed to carry its burden of proof. After initially sourcing 100% of its gross receipts to Texas and unsuccessfully claiming a cost-of-goods-sold…
By Madison Barnett and Jack Trachtenberg
The Michigan Court of Appeals ruled in two consolidated cases that the state’s estimated corporate income tax assessments were invalid because the taxpayers’ sales factors were improperly calculated using an alternative population-based formula rather than the statutory costs of performance (COP) formula. The two taxpayers were out-of-state book publishers…
By Zachary Atkins and Andrew Appleby
The Oregon Supreme Court held that a taxpayer’s sale of an FCC license as part of a liquidation generated apportionable business income. The taxpayer, Crystal Communications, Inc., sold all of its assets to AT&T, including an FCC license. The gain on the FCC license was treated by the taxpayer…
By Todd Betor and Pilar Mata
Oregon’s $29 million corporate excise tax claim against the taxpayers’ parent company was held to violate both the Due Process and Commerce Clauses of the U.S. Constitution by the U.S. Bankruptcy Court for the District of Delaware. Oregon claimed that Washington Mutual, Inc. (WMI) was liable for its subsidiaries’…
By David Pope and Timothy Gustafson
The abatement of late payment and tax amnesty penalties was upheld in favor of several United Parcel Services (UPS) subsidiaries by the New Jersey Superior Court, Appellate Division. The taxpayers and their parent company utilized a cash management system designed to ensure that all subsidiaries had access to cash…
By Zachary Atkins and Jack Trachtenberg
The Commonwealth notched another win before the Massachusetts Appeals Court in a case of first impression affirming corporate excise tax assessments based on a disallowance of the taxpayers’ interest and royalty expenses for pre-addback (pre-2002) and addback tax years (post-2001). Under a clear and convincing evidence standard, the court…
