On February 12, 2019, the Michigan Court of Appeals upheld the imposition of use tax on phones that were given away for no charge by a company in conjunction with its sale of mobile phone service contracts. The company sold service contracts for a single mobile phone service provider and also purchased phones from the provider. The company did not remit sales or use tax on the phones that it purchased from the provider “for purposes of resale.” On audit, the company was assessed use tax based on the price it paid the provider for the phones. The company argued that its purchase price for the phones was zero, asserting that it had been reimbursed by the provider for the cost of phones. The Court, however, determined that the company was not reimbursed by the provider but instead was paid a commission by the provider for the sale of service contracts. Accordingly, the Court upheld the determination that the company owed use tax on its disposition of the phones. Emery Electronics, Inc. v. Dept. of Treasury, Dkt. No. 342250 (Mich. Ct. App. Feb. 12, 2019) (unpublished).

The Texas Comptroller determined that a taxpayer was required to include in its sales factor numerator its receipts from sales of bunker fuel oil to foreign ships in Texas ports. The taxpayer argued that the sales were not from “business done” in Texas even though the oil was delivered to ships in Texas ports. The Comptroller rejected this argument, citing a regulation that provides that receipts from transactions occurring in Texas waters are considered Texas receipts. The taxpayer further argued that this regulation is unconstitutional, but the Comptroller declined to address the argument due to its lack of authority to rule on constitutional matters. (Hearing No. 114,750).

Conventional wisdom states that one does not pick up the nicest habits hanging around a track. However, having spent his youth racing, Rocket, the pet of Jéanne Rauch-Zender, editor in chief of State Tax Notes, nonetheless grew into quite the gentleman. For example, he loves to eat cheese but the only “trick” he learned is to jump slightly to grab it when offered.

Rocket, who was named by son Luke, just turned 11 this month and came to the Rauch-Zender family via Greyhound Pets of America after a career in North Carolina. 

One thing that Rocket did pick up from his misspent youth is an uncanny ability to sneak into his favorite spot. Jeanne reports that every day when they come home, they find Rocket lying on her husband’s side of the bed. They do everything they can to prevent it, such as closing the door and blocking the stairs, but somehow Rocket is able to break in.

Rocket spends his afternoons playing a short game of catch with the kids after they get home from school before returning to his nap.
 

 

He is a wonderful pet and perfect for the family. We are so happy to feature Rocket as our February Pet of the Month!

This is the twelfth edition of the Eversheds Sutherland SALT Scoreboard, and the last edition from 2018. Since 2016, Eversheds Sutherland has tallied the results of what we deem to be significant taxpayer wins and losses and analyzed those results. This edition of the SALT Scoreboard includes insights regarding Louisiana’s refund procedure, credit for taxes paid, and a spotlight on New Jersey cases.

View our Eversheds Sutherland SALT Scoreboard results from the fourth quarter of 2018!

 

On February 14, 2019, the Georgia House Ways and Means Committee voted in favor of House Bill 182. Effective for January 1, 2020, the bill would amend O.C.G.A. § 48-8-2(8)(M.1) to lower the sales threshold on the requirement to collect or report sales and use tax from $250,000 to $100,000 and would repeal subsection (c.2) of O.C.G.A. § 48-8-30 in its entirety to eliminate the option to provide notification to the purchaser and state in lieu of collecting and remitting tax.

O.C.G.A. § 48-8-2 currently requires out-of-state sellers to collect and remit sales tax if the seller obtains gross revenue of more than $250,000 from the retail sales of tangible personal property delivered within Georgia or if the seller conducts 200 or more separate retail sales of tangible personal property delivered within Georgia. Alternatively, O.C.G.A. § 48-8-30 currently gives retailers that reach that threshold the option to instead provide specified information and notification to the purchaser and to the Department of Revenue stating that sales or use tax may be due. House Bill 182 would remove the option for sellers to provide the required notification instead of collecting and remitting tax.

House Bill 182 adopts the same sales threshold used by the South Dakota statute at issue in South Dakota v. Wayfair, 138 S. Ct. 2080 (2018). If enacted, the legislation would be effective for sales made on or after January 1, 2020.

A Georgia marketplace bill has also been introduced, House Bill 276, that if enacted would also become effective January 1, 2020.

 

 

Here is associate Chris Lee in his Atlanta “Studio.”

You can listen to the latest episodes of our SALT podcasts by finding the Eversheds Sutherland Legal Insights Podcast Channel wherever you listen to podcasts (iTunes, Spotify, Google Podcasts) or via the below links.

 

New Jersey apportionment of GILTI

P.L. 86-272 Protection for Deliveries