Judges Panel announced!

Eversheds Sutherland is delighted to participate in a full-day program (May 3, 2017) on Managing State and Local Tax Controversies during TEI’s 2017 Audits & Appeals Seminar. Moderated by Professor Richard Pomp, our lunch session will feature the following state tax judges:

  • Richard D. Pomp, Moderator, University of Connecticut School of Law
  • Steven Lasher, Michigan Tax Tribunal
  • Terry Charlton, Illinois Informal Conference Board
  • David Wilmoth, Wisconsin Tax Appeals Commission

More day 3 sessions:

  • Beyond Paper Pushing – Consequences of State Tax Filings
    Speakers: Michele Borens and Andrew Appleby
  • Overcoming the Challenges of State Tax Audit Management
    Speakers: Jeff Friedman and Carley Roberts
  • Pay Up or Protest! Challenging Assessments
    Speakers: Marc Simonetti and Tim Gustafson
  • Resolution Through the Courts
    Speakers: Eric Coffill and Maria Todorova
  • Navigating Through State Tax Controversy – Considerations Everyone Should Know About
    Speakers: Jonathan Feldman and Madison Barnett
  • Industry Perspective of Managing Audits and Litigation
    Featuring:
    • Jim Kennedy, OppenheimerFunds
    • Cooper Monroe, Duke Energy
    • Tom Pucci, Expedia
    • Elena Xu, Facebook

TEI’s Audits & Appeals Seminar will take place May 1-3, 2017, in Seattle, Washington:

  • May 1-2: Insights and Skills for Federal Tax Controversy Success
  • May 3: Managing State and Local Tax Controversies, sponsored by Eversheds Sutherland

View details and register now!

 

By Eric Tresh and Liz Cha

On April 10, 2017, a Tennessee Chancery Court ordered that the Tennessee Department of Revenue is temporarily prohibited from enforcing a regulation that requires out-of-state retailers making annual sales in excess of $500,000 to collect and remit sales tax. The Order arises out of a dispute between the Plaintiffs and the Department of Revenue regarding the Constitutionality of the regulation. The regulation, which became effective January 1, required out-of-state retailers to register with the Department of Revenue by March 1 and to begin collecting state sales taxes after July 1. The Department of Revenue and Plaintiffs, American Catalog Mailers Association and NetChoice jointly requested the court’s order to limit uncertainty in the marketplace while the case is pending. The Court’s order also provides that retailers who may be subject to the regulation may voluntarily comply with the regulation during the pendency of the litigation. Am. Catalog Mailers Ass’n v. Tenn. Dep’t of Revenue, Tenn. Ch. Ct., No. 17-307-IV (complaint filed Mar. 30, 2017).

The Eversheds Sutherland SALT Team is always excited to see what kind of pets our clients and friends have. Our team features a different pet at the end of every month, and we want to feature YOURS! Featured pets will receive a fun prize from the SALT Team. The deadline for April submissions is Tuesday, April 25.

To submit your pet to be featured, visit the Eversheds Sutherland SALT Shaker App, click “Pet of the Month” in the drop-down, then click “Submit A Pet.”

Don’t have the app? It is available for download in the Apple App Store, Google Play and the Amazon Appstore.

View previously-featured furry friends.

Hotel information below:

The TEI room block at the Renaissance Seattle Hotel is now sold out. However, a limited number of rooms are still available at prevailing rates. Other hotels in walking distance are:

Eversheds Sutherland is delighted to participate in a full-day program on Managing State and Local Tax Controversies (May 3, 2017) during TEI’s 2017 Audits & Appeals Seminar. Session details:

  • Beyond Paper Pushing – Consequences of State Tax Filings
    Speakers: Michele Borens and Andrew Appleby
  • Overcoming the Challenges of State Tax Audit Management
    Speakers: Jeff Friedman and Carley Roberts
  • Pay Up or Protest! Challenging Assessments
    Speakers: Marc Simonetti and Tim Gustafson
  • Resolution Through the Courts
    Speakers: Eric Coffill and Maria Todorova
  • Navigating Through State Tax Controversy – Considerations Everyone Should Know About
    Speakers: Jonathan Feldman and Madison Barnett
  • Industry Perspective of Managing Audits and Litigation
    Featuring:

    • Jim Kennedy, OppenheimerFunds
    • Cooper Monroe, Duke Energy
    • Tom Pucci, Expedia
    • Elena Xu, Facebook
  • Lunch panel featuring state tax judges
    • Richard D. Pomp, Moderator, University of Connecticut School of Law
    • Steven Lasher, Michigan Tax Tribunal
    • Terry Charlton, Illinois Informal Conference Board
    • David Wilmoth, Wisconsin Tax Appeals Commission

TEI’s Audits & Appeals Seminar will take place May 1-3, 2017, in Seattle, Washington:

  • May 1-2: Insights and Skills for Federal Tax Controversy Success
  • May 3: Managing State and Local Tax Controversies, sponsored by Eversheds Sutherland

View details and register now

By Open Weaver Banks and Liz Cha

The Arizona Department of Revenue (Department) issued a taxpayer information ruling stating that a taxpayer’s gross income from transactions provided through the use of computer software is not subject to tax under the personal property rental classification for Arizona Transaction Privilege Tax purposes.

The taxpayer’s software provides its customers with subscription billing and reoccurring payment provider services through a web-based portal. The taxpayer charges its client a percentage of successful billing transactions made during a particular time period. If a client violates the payment agreement with the taxpayer, the taxpayer will discontinue provision of its payment processing services and disable access to its software and web-based portal.

Under Arizona case law, software is treated as tangible personal property. The Arizona Transaction Privilege Tax generally subjects tangible personal property to tax when a taxpayer grants its customer the right to the tangible personal property for a perpetual duration (i.e., a sale) or for a fixed period of time at a fixed amount (i.e, a rental). The Department determined that the taxpayer’s activities would not be considered retail sales because the taxpayer’s billing practices were based on (1) a periodic fee and (2) the taxpayer could discontinue service if the customer failed to pay. With regard to whether the taxpayer’s services constituted a rental, the Department relied on Arizona precedent that taxpayer’s customers must gain sufficient control and use of software to constitute the rental of tangible personal property. In this case, the taxpayer’s customers lacked sufficient control of the software because both the taxpayer and customer used the software and the taxpayer updated information on the portal either manually or automatically so that the clients could view the status of payments processed and other analytical information. Accordingly, the Department determined that gross income from taxpayer’s software services was not a taxable activity under the Arizona Transaction Privilege Tax.

Arizona Taxpayer Information Ruling LR 16-011, Arizona Department of Revenue (September 23, 2016).

Eversheds Sutherland SALT releases the fifth edition of the “SALT Scoreboard,” a quarterly publication that tracks significant state tax litigation and controversy developments and tallies the results of taxpayer wins and losses across the country. Our quarterly publication features Eversheds Sutherland’s observations regarding important state tax decisions and will identify trends by issue, state and forum as they emerge during the year. This edition of the SALT Scoreboard includes insights regarding California’s “doing business” standard, Georgia tax credits, and a Spotlight on sales and use tax decisions.

View our Eversheds Sutherland SALT Scoreboard results from the first quarter of 2017!

ES SALT Scoreboard (Q1 2017).jpg

A recent US Supreme Court decision on surcharges strengthened taxpayers’ First Amendment rights when deciding how they present pass-through fees and taxes to their customers.

  • The Supreme Court held that a New York statute prohibiting a seller from imposing a credit surcharge was a speech regulation, subject to heightened scrutiny, because it regulates how retailers communicate their prices.
  • The decision’s reasoning regarding the communication of prices as speech clarifies that the heightened scrutiny standard also applies to state and local tax statutes regulating a taxpayer’s ability to separately identify taxes and fees on customer invoices.

Prior to this decision, courts and states have taken differing positions on whether a seller may be prohibited from separately identifying tax on a customer invoice when the seller is not required to pass through the tax.

View the full Legal Alert.

The Georgia General Assembly passed significant tax legislation impacting selected industries, but failed to pass a number of broader tax bills:

  • Passed legislation impacts telecommunications, film production and music production companies and causes the review of all income and sales and use tax exemptions.
  • Stalled legislation included the reduction of the individual income tax rate, remote sales tax collection, taxation of transportation companies, and the treatment of refunds for direct payment permit holders.

Taxpayers should expect any stalled legislation to be re-introduced in the next legislative session.

View the full Legal Alert.

Read our March 2017 posts on stateandlocaltax.com or read each article by clicking on the title. For the latest coverage and commentary on state and local tax developments delivered directly to your phone, and to submit your pet to be featured in our Pet of the Month, download the latest version of the Eversheds Sutherland SALT Shaker app.

Abby close up.jpgThis month, we are revisiting one of our prior Pets of the Month for a “Closer Look” follow up. This month we honor Abby Fulps, who previously shared her Pet of the Month glory with her sister Olive in 2012. Abby is a female Boston Terrier belonging to Stephanie Fulps, Sacramento SALT Office Coordinator/Paralegal and her husband Jason.abby super model 2.jpg

Also known as Abby Fabulous, Abby-licious, and the Queen, Abby will be 13 years young in May.

Stephanie found Abby’s adoption ad online in early February 2007 on the fourth page of a Google search for “Sacramento Boston Terrier adoption.” In her ad photo, Abby was wearing a black bandana with red kiss marks around her neck and the ad read, “My name is Abby. I am two years old. I get along with other dogs. I do not like cats.” Stephanie was instantly smitten and called the number and spoke to Abby’s owner who told Stephanie that her husband’s Rottweiler was the dominant dog of the house and that Abby wasn’t getting the attention she deserved. It turned out that Abby lived less than a mile away, and Stephanie and Jason were able to meet her that evening. By the weekend, Abby was living in her new home.

abby in grass 2015.jpg

As she’s gotten older, Abby has become much more affectionate. For the longest time, it seemed she would only tolerate being pet, but now she sits with Stephanie every evening for an after work puppy rub-down. When Stephanie stops massaging long enough to take a bite of dinner or change the channel, Abby looks her in the eye and paws at her in protest.

This special gal is so pleased to be March’s Pet of the Month!

To submit YOUR pet to be featured, visit the Eversheds Sutherland SALT Shaker App, click the Pet of the Month in the drop-down, then click “Submit A Pet.”