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Meet Petunia, the adorable six-month-old French Bulldog belonging to Sutherland SALT Associate Jessica Allen and her fiancé, Erik. Jessica and Erik adopted Petunia at eight weeks old, so they have enjoyed seeing her grow up!

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Petunia loves her people and enjoys laps and snuggle time immensely. She is a curious, sociable puppy and thinks Jessica’s three horses are just really big dogs. Only one of the three tolerates her puppy antics and will acknowledge Petunia when she visits the stables.

Naps, treats and toys are at the top of Petunia’s daily to-do list. She sniffs along the ground searching for food like a little piggy rooting for truffles. And when it’s play time, Petunia prefers the random limbs and scraps of her worn-out toys rather than her new ones.

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This little cutie is so excited to be September’s Pet of the Month!

By Alla Raykin andf Eric Coffill

The Minnesota Supreme Court upheld the Minnesota Tax Court’s award of attorney’s fees to a taxpayer that had challenged the Minnesota Commissioner of Revenue’s assessment of sales and use tax. The Minnesota Supreme Court affirmed the Tax Court decision, because it reasonably concluded that the Commissioner’s additional use tax assessment was not “substantially justified.” The Minnesota Supreme Court also held that the taxpayer’s request for attorney’s fees was timely filed, because the 30-day statute of limitations did not begin to run until the stay of entry of judgment expired to make the Tax Court’s decision final. Commissioner of Revenue v. Dahmes Stainless, Inc.,  No. A15-1920 (Minn. Sup. Ct. Aug. 31, 2016).

By Ted Friedman and Charlie Kearns

The New York City Tax Appeals Tribunal held that the Petitioner, a Delaware LLC, owed New York City real property transfer tax (RPTT) on the transfer of an interest in certain real property. The Tribunal applied the step transaction doctrine and treated the contribution of the Petitioner’s tenant-in-common interest in the property to a newly formed LLC in exchange for a membership interest in the LLC, and the sale of that membership interest to a third party in exchange for cash and relief from liability under a mortgage, as interrelated steps in a single, taxable transaction.  In the Matter of GKK 2 Herald LLC, No. TAT (E) 13-25 (RP) (NYC Tax App. Trib. July 15, 2016).

By Jessica Eisenmenger and Tim Gustafson

The Supreme Court of Mississippi held that a county had the right to a jury trial in an appeal of the county’s ad valorem tax assessment. In reaching its decision, the court relied on centuries-old customs, practices and decisions upholding the right to a jury trial in tax assessment cases that pre-dated the state’s 1890 Constitution. Because the statute authorizing ad valorem tax assessment appeals was silent on whether a right to a jury trial exists, the court found that Mississippi’s common law right to a jury trial in tax cases prevailed. Riverboat Corp. of Miss. v. Harrison Cty. Bd. of Supervisors, No. 2014-IA-01358-SCT (Miss. July 28, 2016).

By Robert Merten and Madison Barnett

The Oregon Tax Court held that Oregon was not constitutionally prohibited from determining the applicable graduated income tax rate of a part-year resident individual based on the individual’s full-year taxable income, even though a majority of that income was earned outside of the state. The taxpayer argued that applying a higher tax rate based on income earned outside of the state, while the taxpayer was not a resident, violated the dormant Commerce Clause of the U.S. Constitution under the Comptroller of the Treasury v. Wynne, 135 S. Ct 1787 (2015). The taxpayer earned income during the first half of 2014 in California and then moved to and earned income in Oregon for the second half of the year. The court upheld Oregon’s personal income tax scheme because “if every state adopted a scheme of applying a percentage of state income to federal income and allowed for a credit for out-of-state taxes paid, the Oregon law passed the internal consistency test.” The court determined that double taxation was avoided because only the taxpayer’s Oregon source income was taxed in Oregon, and tax credits were available in both states for taxes paid to the other state.  Brillenz v. Dep’t of Revenue, TC-MD 150518C.

By Nick Kump and Scott Wright

The Louisiana Court of Appeal held that income derived from diagnostic testing of Louisiana patients’ blood samples and other medical specimens performed in Texas should be sourced to Texas for corporate income tax apportionment purposes. The taxpayer, which operates a multistate network of laboratories where it performs medically prescribed diagnostic services, had sought a refund for overpayments on its 2005 and 2006 income taxes. The court held that because the taxpayer is a service business and not a manufacturer or a merchandiser the income it derives from performing services does not constitute “net sales” (which refers to sales of tangible items) under the states’ general apportionment formula. While noting that Louisiana had expressly adopted market-based sourcing beginning in 2016, the court concluded that for prior years the state’s apportionment formula “clearly does not look to the location of the taxpayer’s market or customers; instead, the source of the income is the state where the income-producing service is performed.” Accordingly, the court held that the income derived from services performed in Texas was attributable to Texas and not to Louisiana. Quest Diagnostics Clinical Labs., Inc. v. Barfield, No. 2015-0926 (La. App. 1 Cir. 9/9/16).

By Chris Mehrmann and Open Weaver Banks

The Michigan Supreme Court denied an application for leave to appeal a Michigan Court of Appeals decision that sanctioned the Michigan’s Legislature’s retroactive withdrawal from the Multistate Tax Compact. The court summarily denied the appeal—which was filed by Harley Davidson Motor Company, Inc. and 13 other taxpayers—explaining that “we are not persuaded that the questions presented should be revised by this Court.” View a copy of the court’s order.The legislation at issue (2014 P.A. 282) repealed the Compact’s election retroactive to 2008, thereby preventing the taxpayers’ three-factor apportionment election for tax years 2008 to 2010. See Sutherland’s previous coverage: That Was Fast: Michigan Court of Appeals Upholds Retroactive Repeal of Compact and Legal Alert: Court of Appeals Hears Michigan’s Compact Election Cases.

We are pleased to announce that our SALT practice has expanded with the recent addition of five associates: Jessica N. Allen in Sacramento, Chelsea E. Marmor and Douglas J. Upton in New York, DeAndre R. Morrow in Washington DC and Alla Raykin in Atlanta.

The group’s arrival to Sutherland’s more than 100-strong tax practice brings the total number of attorneys on the SALT team to 40, one of the largest in the country.

“Our SALT practice has experienced tremendous growth over the past several years. The team’s newest additions in four different offices underscore our commitment to providing the highest quality service to clients for their state tax issues across the U.S.,” said Partner Jeffrey A. Friedman of Sutherland’s SALT practice.

Ms. Allen joins Sutherland after serving as an intern for the California Franchise Tax Board. Ms. Allen earned her J.D. from the University of California, Hastings College of the Law, and a B.S., cum laude, from California State University, Sacramento. 1

Prior to joining Sutherland, Ms. Marmor served as an associate at Andersen Tax, LLC, where she also prepared and reviewed federal and state tax returns and advised clients on SALT matters, including tax litigation and controversy. Ms. Marmor earned her J.D. from St. John’s University School of Law, and a B.A., magna cum laude, from the State University of New York at Binghamton.

Mr. Morrow joins Sutherland after serving as a staff tax attorney for the Revenue Administration Division of the Comptroller of Maryland. Mr. Morrow earned his J.D. from the Charleston School of Law and a B.A. from Lafayette College.

Before joining Sutherland, Ms. Raykin was a staff attorney for the Georgia Department of Revenue, where she provided counsel on compliance and collections matters, drafted regulations, and handled administrative protests and proceedings. Ms. Raykin earned her J.D., with honors, from Emory University School of Law, and a B.S., magna cum laude, from Boston University. While attending law school, she interned at the Northern District of Georgia Bankruptcy Court.

Prior to joining Sutherland, Mr. Upton was a SALT senior associate in KPMG’s New York office. Mr. Upton earned his LL.M. from New York School of Law, his J.D., magna cum laude, from the Michigan State College of Law, and his B.A. and M.M. from Michigan State University.

Sutherland has been a leading adviser on state and local tax issues for more than 60 years and maintains one of the largest SALT practices in the country. Sutherland SALT serves as national state tax counsel to some of the world’s largest companies, including nearly 30 of the Fortune 100 and numerous other industry-leading businesses, advising clients on state and local tax consulting, planning, compliance, litigation and policy matters. The team works with clients on the full spectrum of issues and tax types, including income, property, sales and use, and telecommunications taxes.

Read our full announcement here.

Read our August 2016 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, download the latest version of the Sutherland SALT Shaker app.

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Meet Blue, the lovable feline companion of Sutherland SALT admin, Antonia Saenz. An avid Los Angeles Dodgers fan, Tonia named him for the color “Dodger Blue.” He also goes by Boo Boy, Mr. Man Head and My Handsomeness.

Blue is just over three years old and was adopted by Tonia at an animal shelter in Indiana. Tonia only had Blue for two months when she moved back to California, and the two made the long trek over five days in the middle of winter.

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Blue is a sociable boy and loves playing with his best friend Frosty, who belongs to Tonia’s roommate. They never get tired of chasing each other around the house no matter the time of day. Blue will play with anything he can get his paws on, including cat and kid toys, coasters, keys and phones. And all that play time works up an appetite! Whenever Tonia opens the fridge, Blue pushes past her and tries to climb in. He knows where to find the treats. Turkey lunch meat is his favorite!

This silly kitty often tries to “talk” to Tonia. He’ll look right at her, and open and close his mouth several times without making a sound. He’s probably asking for more turkey. When Blue is not chasing Frosty, playing with toys or trying to talk, you can find him sitting by an open window enjoying the breeze. 

Blue is so happy to be August’s Pet of the Month!

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