Shaking things up in state and local tax
Shaking things up in state and local tax
We hope you will join us for the Tax Executives Institute’s Advanced State and Local Tax Controversy Seminar, taking place December 6-7 in Orlando. The two-day seminar focuses solely on state tax controversy and will provide attendees with tools to navigate disputes with state revenue authorities.
We are pleased to have three members of…
The Missouri Department of Revenue (Department) issued guidance stating that gift certificates sold below face value by a radio station, which are redeemable for goods and services purchased at local retailers, are not subject to sales tax. Although the primary determination is not noteworthy, the private letter ruling further stated that the retailers receiving the…
In 2007, Kentucky enacted a nonrefundable income tax credit of up to $1 per gallon of ethanol produced in the state. Under the statute, ethanol producers were required to file a credit claim “on forms prescribed by the department by January 15 following the close of the preceding calendar year.” The Department of Revenue (Department) appears to have…
Georgia has seen a flurry of activity recently around the issue of whether a non-profit must actually put its property to exempt/charitable use to qualify for the “purely public charity” property tax exemption, or whether the property must merely be dedicated to exempt use. The issue frequently arises when a non-profit owns property that is…
A combined case against Cingular Wireless (now AT&T) has been working its way through state and federal courts for some time now. At issue was Cingular’s practice of passing through to its customers, as a line-item surcharge, the Washington business & occupation (B&O) tax assessed against the company. The plaintiffs sued Cingular on the grounds that its…
On October 16, 2012, the Virginia Department of Taxation issued two identical determinations in which it found cable set-top boxes (a/k/a “converters”) exempt from the Business Tangible Personal Property (BTPP) tax (Ruling Nos. PD 12-162 and PD 12-163). Intangible personal property generally is exempt from the BTPP tax. Section 58.1-1101 of the Virginia Code classifies certain…
The Texas Supreme Court upheld the imposition of the franchise tax (often referred to as the Texas Margins Tax) under both the Texas and United States Constitutions. In Re Nestle USA, Inc., No. 12-0518 (Tex. 2012) (opinion delivered Oct. 19, 2012).
Nestle argued that the imposition of the franchise tax was unconstitutional, both facially and as applied. In Texas, the franchise tax rate is 1%, except for those taxpayers “primarily engaged in a wholesale or retail trade,” for whom the rate is 0.5%. Nestle was engaged only in wholesale and retailing activities in Texas, but because it was engaged in manufacturing outside of Texas, it was subject to the 1% franchise tax rate rather than the lower wholesale/retail rate. Specifically, Nestle argued that the differential rate based on the wholesale/retail classification was unconstitutional under the Equal and Uniform Clause of the Texas Constitution and the Equal Protection, Due Process, and Commerce Clauses of the United States Constitution because the tax lacked a reasonable relationship with actual business in Texas and because of the fact that the tax is higher for those with a manufacturing business outside of Texas.Continue Reading That’s the Way the Cookie Crumbles: Nestle Loses Its Battle on the Constitutionality of the Texas Franchise Tax
Although we really think the Supreme Court should accept a nexus case, it has, once again, denied certiorari. Scholastic Book Clubs, Inc. v. Comm’r of Revenue Services, 38 A.3d 1183 (2012), cert. denied, 568 U.S. ___ (2012).
As we previously noted, on October 2, 2012, the California Court of Appeal issued an opinion on rehearing in The Gillette Company et al. v. Franchise Tax Board, reversing in full the trial court’s decision in favor of the Franchise Tax Board (FTB). 207 Cal.App.4th 1369 (Op. on Rehearing, Oct. 2, 2012). Read…
The three-judge panel of the California Court of Appeal has reissued its opinion in The Gillette Company et al. v. Franchise Tax Board, finding on the same grounds as in the court’s initial opinion that California was bound by the UDITPA election in the Multistate Tax Compact. 207 Cal.App.4th 1369 (Op. on Rehearing, Oct.
