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

We will award a prize for the smartest (and fastest) participant.

This week’s question: Which state recently approved a 25% residential property tax cut?

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. This week’s answer will be included in our SALT Shaker Weekly Digest, distributed on Saturday. Be sure to check back then!

The Supreme Court of Mississippi recently held that separate freight fees are not included in Mississippi use tax base. The taxpayer, Tennessee Gas Pipeline Company, paid use tax on certain tangible personal property that it used in Mississippi. It later paid freight charges to a third-party company to ship these goods to Mississippi and did not include the freight charges in its tax base for calculation of the use tax. Upon audit, the Mississippi Department of Revenue assessed use tax on the freight charges. The Supreme Court of Mississippi agreed with the taxpayer that the company’s purchase of the tangible goods from the seller constituted one closed transaction, while its later purchase of third-party shipping services to move those goods from one location to another constituted a second closed transaction. The Court therefore found that the freight charges were not subject to use tax. The Court noted, however, that had the seller participated in both the sale of the goods and the shipping of the goods, the freight charges would likely be part of the use tax calculation.

Mississippi Department of Revenue v. Tennessee Gas Pipeline Company, LLC, Docket No. 2023-SA-01079-SCT.

On April 17, 2025, the Michigan Tax Tribunal held that a business with only one brick and mortar location was entitled to apportion its income on its city income tax return because it engaged in business activities outside of the city. In this case, a business with only one brick-and-mortar location (located in Lapeer, Michigan) that made all of its sales to customers outside of the city apportioned its income under the permitted three-factor formula. However, pursuant to a 2018 regulation, the City of Lapeer argued that the business was not entitled to apportion its income, resulting in a 100% business allocation percentage to the city. 

Under Michigan law, a business may apportion its net profit out of the city “[w]hen the entire net profit of a business subject to the tax is not derived from business activities exclusively within the city.” In 2018, the Lapeer City Commission approved a regulation interpreting this law: 

“The fact that a person fills orders by shipment to an out-of-city destination, when such person has no regularly maintained and established out-of-city location and engages in no out-of-city business activity, does not entitle such person to apportion part of his net profit as being earned as a result of work done, services rendered or other business activity conducted out of the City.”

Reviewing the regulation, the Tribunal concluded that merely not having a business location outside of the city did not prohibit the business from apportioning its income. Rather, it must also engage in no out-of-city business activity. The Tribunal reviewed the business’ activities and found that it engaged in business activities outside of Lapeer because of the strategic planning activities of out-of-city employees. The Tribunal also rejected the City’s argument that the business was not earning net profit as a result of these strategic planning activities. Because the business engaged in business activities outside of the City, the Tribunal concluded that the business was entitled to apportion its income. 

Vidon Plastics Inc. v. City of Lapeer, MTT Dkt. No. 23-002017 (Mich. Tax Trib. Apr. 17, 2025).

This week, Eversheds Sutherland SALT Partners Michele Borens and Jeff Friedman will present at week two of the TEI Houston Chapter’s 2025 Tax School, discussing significant state tax litigation.

In addition, Partners Maria Todorova and Eric Tresh will serve as speakers at the State Tax Roundtable for Utilities & Power’s (STARTUP) 2025 Spring Conference. Their session will cover emerging issues in administrative deference.

Stay tuned for more updates and insights from our SALT team as they continue to lead discussions and share their knowledge at key industry events.

The last four months were active in New York tax law. In addition to numerous legislative proposals, decisions were issued in multiple court cases.

In this installment of NY Tax Talk, a quarterly column in Law360 focused on recent developments in New York tax law, Eversheds Sutherland attorneys Liz Cha and Chelsea Marmor discuss select decisions involving the application of sales tax, preferential tax rates, sourcing and the retroactive application of the New York Department of Taxation and Finance corporate franchise tax regulations.

Read the full article here.

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

We will award a prize for the smartest (and fastest) participant.

This week’s question: Several communities in which state have adopted a 1% local sales tax on groceries?

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. This week’s answer will be included in our SALT Shaker Weekly Digest, distributed on Saturday. Be sure to check back then!

A California appeals court held that taxpayers challenging city fees as unconstitutional without seeking a refund need not exhaust their administrative remedies. The taxpayers alleged that the City of Azusa’s sewer and trash franchise fees violated Proposition 218, Article XIII D of the California Constitution because the fees exceeded the cost of providing those services and the overage was transferred to the City’s general fund. The district court dismissed the taxpayers’ claim for failure to exhaust their administrative remedies, which required the taxpayers to pay the fees under protest and file a refund claim.

The appeals court reversed, holding that the taxpayers’ challenge to the fees sought relief outside of the statutory claims procedure for refunds because the taxpayers only sought mandate and declaratory relief. The taxpayers sought a writ of mandate directing the City to cease further imposition and collection of excessive solid waste service fees and to return all franchise fees transferred to its general fund during the past three years. They also sought a declaration that the City’s solid waste service fees violated and continue to violate Proposition 218. Accordingly, the taxpayer’s action did not involve any issue subject to determination through the administrative refund remedy.

Carachure v. City of Azusa, No. 22STCP03478 (Cal. App. 2025).

Members of our SALT team are excited to present at COST’s 2025 Spring Conference and Audit Sessions, held in New Orleans, LA from April 28 to May 1. Sessions will cover a wide range of topics, including digital products, transfer pricing, sales tax calculation solutions, and the application of AI and machine learning in state tax, among others.

Sessions and speakers from our team include:

  • Emerging Issues in Administrative Deference – Jonathan Feldman
    This session will explore how much consideration taxpayers should give to various types of administrative guidance from state taxing authorities and how courts’ views of administrative guidance have been shifting in favor of taxpayers in recent years.
  • Transfer Pricing and Intercompany Transactions – Documentation, Documentation, Documentation – Eric Tresh
    This session will explore the essential practices for documenting intercompany transactions from the outset, ensuring records are thorough and accurate to withstand audit scrutiny. It will also cover effective strategies for working with auditors to ensure that documentation is understood and any proposed adjustments align with the facts and applicable laws.
  • Best Practices in Maintaining Your Sales Tax Calculation Solutions – Charlie Kearns
    This session will focus on the importance of regularly reviewing and updating your sales tax calculation solution. 
  • Constitutional Issues – Jeff Friedman
    This session will delve into the constitutional challenges asserted by taxpayers. It will also discuss federal laws that preempt state taxes under the Supremacy Clause.

For more information and to register, visit the COST website. We look forward to seeing you there!

Meet Astro, a charming Basenji who belongs to Amanda Nelson, Senior Manager of Indirect Tax at Salesforce. Astro is three years old and got his name from the lovable and loyal character on the Jetsons. Astro’s unique breed is known for being “barkless” and for its curly, donut-shaped tail, making Astro a quiet and pawsitively handsome companion.

Astro loves to spend his days sunbathing like a cat, soaking up the warmth and enjoying the peacefulness. When he’s not lounging indoors, he and Amanda embark on various hikes and adventures around Seattle.

Another one of Astro’s favorite activities is stealing various items around the house, adding a touch of mischief to his otherwise pawfect demeanor. Whether it’s chasing squirrels or running behind a mountain bike, Astro’s playful nature keeps Amanda on her toes.

Welcome to the SALT Pet of the Month family, Astro!

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

We will award a prize for the smartest (and fastest) participant.

This week’s question: Which state enacted bills that would reduce the personal income tax rate and issue rebates of up to $500 to taxpayers?

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. This week’s answer will be included in our SALT Shaker Weekly Digest, distributed on Saturday. Be sure to check back then!