• SALT Pets of the Month: Dante and DaVinci
  Meet Dante and DaVinci, two mini donkeys (aka “the donkey doodles”), belonging to Paychex Inc. Manager of State and Local Tax Dee Waldruff and her family.
• New California Tax Agencies’ Roles Clarified
  On September 16, 2017, California Governor Jerry Brown signed Assembly Bill 131, a budget trailer bill clarifying a number of provisions related to the roles of California’s two new tax agencies, the California Department of Tax and Fee Administration (CDTFA) and the Office of Tax Appeals (OTA), which were created to perform many of the California State Board of Equalization’s (BOE) previous duties by the Taxpayer Transparency and Fairness Act of 2017.
• Delaware Sewer and Water Authority Successfully Challenges Permit “Fee” as Disguised Tax
  The Delaware Chancery Court held that a town’s $27,000 building permit “fee” was in substance a tax that could not be levied against a tax-exempt water and sewer authority.
• Indiana DOR: “Equity” Prevents Application of Throwback Rule
  On August 30, 2017, the Indiana Department of Revenue determined that an out-of-state corporation doing business in Indiana and worldwide was entitled to a reduction of its Indiana sales factor because certain sales in foreign jurisdictions should not have been sourced to Indiana under the state’s “throwback rule.”
• Massachusetts Supreme Judicial Court Holds Taxation of Drop Shipments Is Constitutional
  The Massachusetts Supreme Judicial Court held that an in-state wholesaler was required to collect and remit sales tax on drop shipment sales made to Massachusetts customers.
• New York State Tax Appeals Tribunal: Assessment of Non-Admitted Alien Insurance Companies Violated Tax Treaty and Foreign Commerce Clause
  The New York State Tax Appeals Tribunal (Tribunal) held that the Department’s assessment of two non-admitted German insurance companies violated the United States-Germany Tax Treaty’s anti-discrimination clause and the US Constitution’s Foreign Commerce Clause.
• North Carolina Supreme Court Determines that Bank’s Market Discount Income Is Not Deductible as Interest
  The North Carolina Supreme Court affirmed the North Carolina Business Court’s decision that Fidelity Bank was precluded from deducting “market discount income” from US bonds for North Carolina corporate income tax purposes.
• South Carolina Court of Appeals Sends Taxpayers Clear Signal; Rules DIRECTV Must Source Receipts Based on Satellite Signal Delivery
  The South Carolina Court of Appeals held that all of DIRECTV’s South Carolina customer subscription receipts were properly sourced to the state for purposes of determining DIRECTV’s corporate income tax apportionment factor due to the location of its satellite signal delivery.
• Virginia Supreme Court Limits Corporate Income Tax Addback Exception
  On August 31, 2017, the Virginia Supreme Court issued its opinion in Kohl’s Department Stores, Inc. v. Virginia Department of Taxation, holding that only the portion of royalties that are actually taxed by another state falls within its “subject to tax” exception to Virginia’s addback statute for corporate income tax purposes.

FEATURED PUBLICATIONS

• Blazing a Trail for More Local Taxes by Ballot Initiative
  On Aug. 28, 2017, in California Cannabis Coalition v. City of Upland, the California Supreme Court held local taxes imposed by taxpayers via initiative are subject to less stringent requirements than taxes imposed by local governments pursuant to Proposition 218.

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