Meet Theodora, our May SALT Pet of the Month! With her royal presence, it was only fitting that her owner, SALT Associate Constance Chien, named her after Empress Theodora. Constance welcomed Theodora into her home three years ago when a neighbor was looking to rehome her, and it turned out to be the perfect match.

Theodora has a particular fondness for fishy treats, especially enjoying a bit of tuna before Constance makes a sandwich. She is an avid explorer, having ventured through Maine with Constance during the summer, and now she continues her adventures along the long hallway of their apartment building. Theodora is also extremely vocal, always having something to say whenever she encounters new things.

Her cuddly demeanor and regal disposition even managed to win over Constance’s mom, who was previously afraid of cats and is now considering getting one in the future. We are thrilled to have Theodora as part of the SALT Pet of the Month family!

This is the first edition of the Eversheds Sutherland SALT Scoreboard for 2025. Since 2016, we have tallied the results of significant taxpayer wins and losses and analyzed those results.

This edition includes discussions of the taxability of private line services and content delivery networks, as well as a spotlight on combined reporting decisions.

Dive into the Eversheds Sutherland SALT Scoreboard for the first quarter of 2025 now!

This week, the Eversheds Sutherland SALT team is gearing up for a series of exciting speaking engagements.

TEI Nashville Chapter’s Spring Tax Seminar

On Monday, May 12, 2025, SALT Partners Ted Friedman and Charlie Kearns will cover SALT cases to watch and policy considerations in Nashville, TN for the TEI Nashville Chapter’s Spring Tax Seminar.

TeleStrategies’ Communications Taxation Conference

In addition, our SALT team is pleased to again support this year’s Communications Taxation Conference, held May 13 – 15, 2025 in Nashville, TN. SALT attorneys Liz Cha, Maria Todorova, Eric Tresh and Chelsea Marmor will present on the following topics:

  • Liz Cha and Eric Tresh – State Tax Litigation Update
  • Maria Todorova and Chelsea Marmor – Old and New Frontiers: Gross Receipts Taxes, New Taxes/Fees and Legislative Trends

TEI Denver State and Local Tax Day

On May 14, SALT Partners Todd Betor, Michele Borens, Jeff Friedman, Ted Friedman and Tim Gustafson will present on a variety of state and local tax topics at the TEI Denver’s State and Local Tax Day. Sessions and speakers include:

  • Jeff Friedman and Michele Borens – Litigation and Legislative Roundup
  • Ted Friedman and Tim Gustafson – To Pay or Not to Pay, That is the Question?
  • Todd Betor and Ted Friedman – Are you Gross? Net?
  • Todd Betor, Michele Borens, Tim Gustafson, and Jeff Friedman – C-SALT: What Every Executive Should Know About State and Local Tax

NCSL SALT Task Force Spring 2025 Meeting

Finally, on May 16, SALT Partner Charlie Kearns will present during the NCSL’s SALT Task Force Spring 2025 Meeting. Among other topics, Charlie’s panel will provide an overview of taxes in the communications industry and their current state of play.

Stay tuned for more updates and insights from the Eversheds Sutherland SALT team!

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).