An Illinois appellate court held that a PepsiCo, Inc. subsidiary—Frito-Lay North America, Inc. (FLNA)—was not an 80/20 company excluded from PepsiCo’s unitary group. Illinois excludes 80/20 companies for the unitary group, where such companies have over 80% of their payroll and property from outside the United States. After a restructuring, PepsiCo created a single-member LLC as a division of FLNA to serve as a global employment company for expatriate employees. By including the expatriate employees in FLNA’s payroll factor, FLNA had over 80% foreign payroll. However, the court held that expatriate employees do not qualify as common law employees of the disregarded entity. Therefore, the court held that without those expatriate employees, FLNA’s foreign payroll did not exceed the 80% threshold to be an 80/20 company excluded from the unitary group.

PepsiCo, Inc. v. Ill. Dep’t, Nos. 16 TT 82, 17 TT 16, 2025 IL App (1st) 230913-U (Ill. Ct. App. Mar. 19, 2025).

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This week’s question: Mississippi enacted a bill that would tax what type of beverage at a rate of 15.5%, more than double the state sales tax?

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!

During the 2025 legislative session, the Georgia General Assembly passed several notable tax related bills including further decreasing the income tax rate and extending the time period for taxpayers to protest and appeal the Department of Revenue’s assessments. Additionally, the legislature passed clean-up legislation to clarify procedural elements of the new Georgia Tax Court which will begin operations in 2026. Within 40 days (May 14, 2025), the Governor may sign or veto legislation that the legislature passed. If the Governor does not act, the bills become law.

The Georgia legislative session is two years. While the 2025 legislative session ended on April 4, 2025, bills that were introduced this session may still pass in the second year of the legislative session. A few of the tax bills to watch in 2026 are also described in our alert.

Read the full Legal Alert here.

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This week’s question: In what northeastern state was a bill recently introduced that would repeal the state’s film tax incentives?

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!

In the latest episode of the SALT Shaker Podcast, Eversheds Sutherland Counsel Jeremy Gove and Chelsea Marmor explore a new, concise podcast format that provides updates on recent noteworthy cases.

Jeremy and Chelsea examine a New Hampshire court’s decision in Hologic, Inc. v. Stepp, covering the facts, the court’s holding, the analysis, and the case’s practical implications.

They wrap up the episode with a new segment, asking “either/or” – do you prefer the vernal equinox or autumn equinox?

You can read our summary of Hologic, Inc. v. Stepp here.

For questions or comments, email SALTonline@eversheds-sutherland.com. Subscribe to receive regular updates hosted on the SALT Shaker blog.

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The Supreme Court of Texas ruled that a corporation that owns and operates correctional facilities was not exempt from sales and use taxes as an unincorporated instrumentality of the United States or Texas. The corporation runs private prisons and enters into contracts with federal and state government agencies to house inmates. The Comptroller assessed the corporation for unpaid sales and use tax on supplies necessary to operate the facilities.  The corporation contended that it was a tax-exempt unincorporated instrumentality of the United States and Texas – a type of “governmental entit[y]” – because it performed quintessential government functions.

On appeal, the court concluded that the corporation failed to establish by a preponderance of the evidence that it was an unincorporated instrumentality of the federal and state governments. First, the corporation did not establish that it was an entity identified by the regulation as exempt. It could not prove that: (1) it is a military entity; (2) its contracts explicitly and unequivocally state that it was an agent of the governments; (3) it is wholly owned by the federal or state government, and (4) its contracts specifically named the corporation as an agent of the United States or Texas. Second, the court determined that the corporation also did not satisfy four of the six required characteristics to qualify as an otherwise exempt government instrumentality. 

GEO Group, Inc. et al. v. Hegar, No. 23-0149 (Tex. Mar. 14, 2025).

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

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This week’s question: The House of which midwestern state recently passed a bill that would changed the progressive tax structure with a flat tax structure?

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 Nevada Supreme Court found that the Nevada Department of Revenue’s (Department) attempt to ignore its email correspondence with a taxpayer violated “basic notions of justice and fair play.”

A Nevada statute requires that, in order to file a petition for judicial review of a tax deficiency, a taxpayer must first either pay the entire deficiency or enter into a “written agreement” with the Department. Prior to filing its petition, the taxpayer’s counsel communicated with a Department lawyer who responded with an email acknowledging an agreement. Nevertheless, the Department (amazingly) moved to dismiss the petition based on the startling contention that its email correspondence did not constitute a “written agreement.”

The Nevada Supreme Court found that the Department’s argument, that an email did not constitute a “written agreement” was “unpersuasive.” The court determined that the “most natural reading of the email is that the Department had come to an agreement” with the taxpayer. The court stated that a taxpayer should be able to rely on the advice they receive from the Department and that the Department “violated basic notions of justice and fair play.”

Hohl Motorsports, Inc. v. Department of Revenue., No. 87189 (Nev. Feb. 10, 2025).

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 proposed a bill to provide various tax exemptions for the Women’s National Basketball Association All-Star Game when held in the state?

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!