On May 3, the Kansas Legislature overrode Governor Kelly’s veto of SB 50.  As a result, marketplace facilitators will now be required to collect sales and use tax beginning July 1, 2021 if they exceed a $100,000 nexus threshold.  The legislation also requires marketplace facilitators to collect 911 fees beginning April 1, 2022. Please see our previous post here for more information about the marketplace facilitator collection provisions in SB 50.

In addition to requiring marketplace collection, the legislation also decouples the state from GILTI and 163(j) and eliminates the state’s ten-year net operating loss carryforward cap for losses incurred in tax year 2018 or later, among other provisions.

On April 29, California AB 71 was approved by the Assembly Housing and Community Development Committee. AB 71 was approved by the Assembly Committee on Revenue and Taxation earlier in April. The bill will now head to the Assembly Appropriations Committee for consideration. The Appropriations Committee is typically the final committee to consider a bill before it goes to an Assembly floor vote. Please see our previous post here for more information on AB 71’s proposed corporate tax increases, including the inclusion of GILTI and repatriation income of affiliated corporations in a California taxpayer’s gross income.

On April 27, Illinois Governor J.B. Pritzker appointed retired Circuit Court Judge Edward Washington II to the Illinois Independent Tax Tribunal. The appointment was for a vacant position, so it appears that Judges Brian F. Barov and James M. Conway will continue in their roles.

Edward Washington II was a judge of the 5th Subcircuit of the Cook County Judicial Circuit Court in Illinois from 2002 to 2017. He also served in the cabinet with the Illinois Attorney General’s Office and on the Illinois Commerce Commission. Most recently, he was a member of Nixon Peabody’s Complex Commercial Disputes practice group in Chicago.

Judge Washington is the first administrative law judge appointed to the Tribunal by Governor Pritzker and will join Judge Barov and Chief Judge Conway, both of whom have been with the Tribunal since its inception in 2014. Although it is not clear if Judge Washington has “substantial knowledge of State tax laws” as required by the Illinois Independent Tax Tribunal Act, 35 ILCS §1010/1-30, he does have an extensive judicial experience, serving as a Circuit Court Judge for fifteen years.

On April 29, 2021, Georgia Governor Brian Kemp signed SB 185, limiting the application of administrative deference in Georgia tax controversies. This law seeks to level the playing field in state tax litigation matters by reducing the level of deference accorded to the Department of Revenue’s interpretations of ambiguous laws. The law provides that “all questions of law decided by a court or the Georgia Tax Tribunal, including interpretations of constitutional, statutory, and regulatory provisions shall be made without any deference to any determination or interpretation, whether written or unwritten, that may have been made on the matter by the department, except such requirement shall have no effect on the judicial standard of deference accorded to rules promulgated pursuant to Chapter 13 of Title 50, the ‘Georgia Administrative Procedure Act.’” Accordingly, the legislation eliminates all subregulatory deference that may have previously been accorded to the Georgia Department of Revenue in litigation matters and applies to new cases commencing at the Georgia Tax Tribunal or a state Superior Court after April 29, 2021. For more information on SB 185, see our prior coverage, here.

On April 27-28, the Multistate Tax Commission’s Uniformity Committee (UC) held its spring meeting virtually. In addition to voting to adopt a UC Charter, the following uniformity projects were advanced:

  • Partnership Projects
  • Taxation of Digital Goods and Services

Read the full Legal Alert here.

On April 26, 2021, the Massachusetts Department of Revenue issued Technical Information Release 21-5. This TIR was issued in response to New Cingular Wireless PCS LLC v. Commissioner of Revenue, 98 Mass. App. Ct. 356 (2020), where the court held that the Internet Tax Freedom Act (ITFA) preempts the imposition of sales and use taxes on sales of internet access service. Two of the requirements for ITFA preemption were at issue in the case. ITFA requires vendors of internet access to separately state the charges for internet services from other services on the customer’s invoice, or to reasonably identify the internet access charges in its books and records. ITFA also requires that internet access providers offer customers screening software that is designed to permit the customer to limit access to material on the internet that is harmful to minors. The TIR states that the Department will continue to enforce the statutory imposition of sales and use taxes on the sales of internet access services in instances where ITFA does not apply and that as confirmed in the Cingular decision, both the accounting and screening requirements must be met by internet access providers for the prohibition on taxation to apply.

Calling all trivia fans! Don’t miss out on a chance to show off your SALT knowledge!

We will award prizes for the smartest (and fastest) participants.

This week’s question: What state’s governor voted against a marketplace facilitator bill in mid-April?

E-mail your response to SALTonline@eversheds-sutherland.com.

The prize for the first response to today’s question is a $25 UBER Eats gift card.

Answers will be posted on Saturdays in our SALT Weekly Digest. Be sure to check back then!

Our April Pet of the Month feature spotlights an intellectual group of furry friends from New York University School of Law!

Partner Jeff Friedman serves as an adjunct professor, instructing alongside the distinguished Professor Richard Pomp to teach a Multistate Taxation course. During a recent online lecture, Professor Pomp and Jeff encouraged the class to bring their pets into the frame, which resulted in a pup-dorable photo opportunity!

Read on to learn more about some of the pets who spiced up a class on gross receipts taxes. Good dogs, bad taxes!

Ryan Amelio and Ranger, a miniature Aussiedoodle

Jack Klug and Buddy, a Bichon Frise

Hannah Daniels’ family dog Roxy, a Yorkie
“Of course, we think she is the best dog in the world!”

Chris Cochran and Cashew, a Golden Retriever / Cocker Spaniel mix

Jason Kras and Aspen, an English Cream Golden Retriever

Lauren Dehasque

Molly McBride

Professor Richard Pomp, and Ruby, a 10-year-old (mostly) Cavalier King Charles Spaniel

Professor Jeff Friedman and Harry, a Westie

AB 71 was introduced earlier this year (see our prior coverage here) to provide additional state funding for homelessness programs, derived – in part – from increasing taxes on business income. In March, AB 71 was amended to eliminate steep corporate tax increases. The bill as amended, however, still would require corporate taxpayers that make a water’s-edge election to include in gross income 50% of the global intangible low-taxed income and 40% of the repatriation income of affiliated corporations. But, the bill does not allow these taxpayers to take into account the apportionment factors of those affiliated corporations.  For calendar year 2022 only, the bill would allow a taxpayer to revoke its water’s-edge election.

On April 20, the Assembly Committee on Revenue and Taxation held a public hearing on AB 71, where significant testimony was provided on both sides.  After a lengthy debate by the Committee, the bill received a “do pass” recommendation by a vote of 7 to 4.  With that, the bill was re-referred to the Housing and Community Development Committee, which will hold a public hearing on the bill on April 29.