Calling all trivia fans! Don’t miss out on a chance to show off your SALT knowledge!

We will award prizes for the smartest (and fastest) participants.

This week’s question: Earlier this month, which east coast state enacted a law providing, among other things, tax credits for converting vacant office buildings into residential units?

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!

Have you ever wondered what goes on behind the bench?  

Join us for the State & Local Tax Controversy Track of TEI’s 2024 Audits & Appeal Seminar.   This year’s seminar includes a panel of distinguished state tax judges moderated by Professor Rick Pomp. The judges will provide their perspective on state tax controversies and reactions to the arguments that they hear.

State Tax Judges Panel

  • Judge Cheryl Akin, California Office of Tax Appeals
  • Hon. Justin L. McAdam, Judge of the Indiana Tax Court
  • Matt Boch, Chief Commissioner of the Arkansas Tax Appeals Commission

Register now!

For more information, please contact: meetings@tei.org

The Massachusetts Appellate Tax Board (ATB) struck down a $17.9 million assessment and held that State Street Corp. (State Street), a bank holding company under the Bank Holding Company Act of 1956, was entitled to approximately $14 million in Massachusetts research tax credits because Massachusetts state tax provisions did not prohibit bank holding companies from benefiting from research credits.  

State Street filed combined reports, including within such reports two financial institutions: State Street Bank Trust Company and Charles River Systems, Inc. State Street ultimately claimed nearly $14 million in research tax credits on its combined return. The Massachusetts Department of Revenue (Department) audited State Street and determined that it was not entitled to claim such credits under Massachusetts law, asserting bank holding companies were taxed under a different provision than general business corporations and as such were ineligible for research credits.

The ATB rejected the Department’s argument, reasoning that the statute did not limit credit eligibility based on the type of business corporation claiming the credit. As such, the ATB determined that the research tax credit provided under G.L. c. 63, § 38M was available to bank holding companies, and therefore, State Street properly claimed the tax credit.

State Street Corp. v. Comm’r of Revenue, Docket No. C344139 (Mass. App. Tax Bd. Aug. 15, 2024).

California’s 2024 tax landscape seems darker than ever. A “no tax increase” budget that increases taxes. Precedential decisions without any precedential effect whatsoever. But don’t despair! Glimmers of hope remain as taxpayers push back at the agencies and courts make headway. On August 27, join Eversheds Sutherland attorneys Tim Gustafson and Eric Coffill as they discuss all things California tax in their second California tax developments webinar of the year.

There’s still time to register here.

Calling all trivia fans! Don’t miss out on a chance to show off your SALT knowledge!

We will award prizes for the smartest (and fastest) participants.

This week’s question: The U.S. Department of the Treasury recently announced that this New England state would join the IRS Direct File program for the 2025 filing season.

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 Massachusetts Appellate Tax Board (ATB) determined that a New Hampshire resident attorney, employed by a Massachusetts-based federal agency, was not entitled to a personal income tax refund for days he did not physically work in Massachusetts during the coronavirus pandemic.

In April 2020, Massachusetts implemented emergency regulation 830 CMR 62.5A.3, which required nonresident employees who worked remotely from March 10, 2020, to September 13, 2021, to compute their apportionment percentage in one of two ways, whichever resulted in lesser tax: 1) nonresident employees could apportion their income based on the percentage of work performed in Massachusetts in January and February of 2020; or 2) nonresident employees could apportion income based on their 2019 (pre-COVID-19) apportionment percentage, if they worked for the same employer. On his 2020 return, the taxpayer reported 260 days worked in Massachusetts and received a refund of $119. The taxpayer proceeded to file an application for abatement, seeking an additional refund of $3,919 on the basis that he only worked 54 days in Massachusetts during the 2020 tax year. The request was deemed denied, and the taxpayer appealed.

On appeal, the taxpayer argued that 830 CMR 62.5A.3 violated his rights under the Due Process and Commerce Clauses of the U.S. Constitution due to lack of taxable nexus with Massachusetts. In agreeing with the Commissioner’s determination, the ATB concluded that several states implemented similar rules during the pandemic (e.g., New York), the taxpayer’s employer did not change his duties or adjust his withholding, and the taxpayer did not question Massachusetts’ taxation of his income prior to the pandemic when he worked remotely two days per week. Notably, the ATB cited South Dakota v. Wayfair, stating that physical presence is no longer a touchstone of constitutionality, and as such, where there is sufficient nexus, the Due Process and Commerce clauses do not prevent Massachusetts from imposing an income tax on non-resident remote workers. Further, the ATB contrasted the issue before it to Comptroller Maryland v. Wynne, reasoning that even if another state had sought to tax the taxpayer’s income, he, unlike the taxpayer in Wynne, would have been entitled to a full credit under 830 CMR 62.5A.3.

Accordingly, the ATB determined that because Massachusetts continued to confer benefits such as police, fire, and road maintenance on the taxpayer’s employer in the state during the pandemic, the taxpayer was rightfully taxable by Massachusetts for the days he worked in New Hampshire.

Sakowski v. Commissioner of Revenue, Docket No. C347594 (Mass. App Tax Bd. July 8, 2024).

In one fell swoop, Loper Bright rebalanced the way in which federal courts will apply federal regulations and other administrative guidelines.

In his Board Brief for Tax Notes State, Eversheds Sutherland SALT Partner Jeff Friedman explains how the U.S. Supreme Court’s decision to reverse Chevron will have short-term and long-term consequences regarding the application of state tax regulations and other administrative guidance.

Many states never adopted Chevron deference in the first place. And those states that have adopted it, will now reconsider it.

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 prizes for the smartest (and fastest) participants.

This week’s question: Last week, the California Office of Tax Appeals released a decision saying that the process of making what substance for its customers was a taxable sale of tangible personal property?

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!

There’s still time to register! On August 13, join Eversheds Sutherland SALT attorneys Charles Capouet and Cat Baron for a review of the long-standing SALT Scoreboard publication and the important state tax cases from the first half of 2024. In addition to recapping case opinions, Charles and Cat will analyze case trends and compare 2024’s results to prior years’ case tallies. Register here.

On August 14 and 15, the Eversheds Sutherland SALT team is pleased to sponsor COST’s 2024 State and Local Tax Workshop for Technology Companies in Cupertino, CA. The two-day workshop will cover key state and local tax issues that technology companies are facing, such as state taxation of Digital Business Inputs, FITFA, sourcing, apportionment, streaming, marketplace facilitators, digital service taxes and much more. Eversheds Sutherland speakers and topics will include:

  • Jeff FriedmanTop 10 Income and Transactional Tax Cases Impacting the Tech Industry
  • Michele Borens Escalating Burden of Gross Receipts Taxes and Local Taxes (Including Recent SF Activity) on Taxpayers
  • Charlie Kearns The Creeping Sales and Use Tax – And Ways to Mitigate the Taxation of Business Inputs as States Expand Their Sales Tax Base to Digital Products and Services

You can find more information and register here.