Click here to read our December 2013 posts on stateandlocaltax.com or read each article by clicking on the title. A printable PDF is also available here. To read our commentary on the latest state and local tax developments as they are published, be sure to download the Sutherland SALT Shaker mobile app.

• Arizona Court of Appeals Provides Expansive Business Income Definition
  The Arizona Court of Appeals upheld a broad definition of business income, adopting both the transactional and functional tests.
• Arizona Treats Patent Infringement Award as Business Income
  The Arizona Department of Revenue concluded in a Taxpayer Information Ruling that court-ordered proceeds from a patent infringement lawsuit were properly characterized as business income.
• SALT Pet of the Month: Henry
  Meet Henry P. Wienerman, the four-month-old Boston Terrier of Sutherland SALT legal secretary Stephanie Fulps and her husband, Jason.
• Liquidation Exception Evaporates in Arizona
  The Arizona Court of Appeals held that a liquidation exception to the functional test for business income does not exist in Arizona and that a taxpayer’s sale of its wholly owned subsidiary was business income.
• Arizona “Do-It-Yourself” Blues: Taxpayer Must Include Trademark Licensing Subsidiary’s Income in Combined Return
  The Arizona Court of Appeals held that Home Depot U.S.A., Inc. was required to include in its combined Arizona income tax return the income of an out-of-state subsidiary that licensed the retailer’s trademarks.
• Would a Rose Smell as Sweet by Any Other Name? Colorado Determines Digital Images Are Tangible Personal Property for Corporate Income Tax Purposes
  The Colorado Department of Revenue determined that sales of digital images, whether delivered electronically or via tangible medium, are sales of tangible personal property for income tax apportionment purposes.
• Final Destination Part 2: Mississippi’s Highest Court Denies Rehearing in Equifax Case
  The Mississippi Supreme Court denied the taxpayer’s motion for rehearing in Equifax, Inc. v. Mississippi Dep’t of Revenue, a case on which we previously reported.
• Oregon Supreme Court: “Intangible Assets” Means ALL Intangible Assets
  The Oregon Supreme Court held that the state’s sales factor exclusion for gross receipts from intangible assets not derived from a taxpayer’s primary business activity applies to all types of intangible assets.
• Virginia Tax Commissioner Upholds Net Operating Loss Deduction Adjustments Beyond Statute of Limitations
  The Virginia Tax Commissioner determined that the Department of Taxation was permitted to make net operating loss deduction adjustments for taxable years outside the statute of limitations because the adjustments were necessary to determine the correct federal taxable income for the taxable years at issue.