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, the US Supreme Court invited the Solicitor General to file a brief in which state tax case involving the denial of a resident’s request for additional credits for taxes paid to another state?

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!

Meet June’s SALT Pet of the Month, Chester! Taking after three of his owners with a ‘C’ name, Chester (the Christmas present!) makes his home with Eversheds Sutherland Counsel, Charles Capouet.

The adorable nine-month-old Mini Bernedoodle keeps his family entertained and on their toes. When he’s not running around in the yard, Chester enjoys wrestling and playing fetch. During breaks from his shenanigans, he can be found refueling with his favorite snack, peanut butter.

Charles and his family are lucky to have a chum like Chester, even when he snacks on socks. Welcome to the SALT Pet of the Month club, Chester! 

On June 7, 2024, the Arizona Supreme Court held that reimbursements received by a hotel when participating in a hotel rewards program were subject to the Transaction Privilege Tax (TPT). The reimbursements were paid to the taxpayer when it provided a guest with a complementary hotel stay under the program. The rewards program required the taxpayer to pay a percentage of room revenues to fund the program. Guests accrued points by staying at participating hotels, spending money with affiliates, purchasing points, or receiving points as a gift.  Because the rewards points came from transactions upon tax had already been paid, the taxpayer argued that the reimbursements were akin to “post-tax” reserves or returns of capital and filed a refund claim for TPT paid between 2012 and 2016.

In finding the reimbursements were taxable gross income under the TPT, the Court relied primarily on the fact that the reimbursements were consideration for the sale of lodging. The Court also found that the taxpayer did not have control over the points credited to guest accounts and that there was no way to determine whether the reimbursements were sourced from the funds contributed by taxpayer. As such, the Court held that the reimbursements were not akin to “post-tax” reserves or returns of capital, and that the reimbursements were subject to the TPT.

Dove Mountain Hotelco, LLC v. Dep’t of Revenue, Ariz., No. CV-23-0176-PR (June 7, 2024).

Eversheds Sutherland Counsel Jeremy Gove and Chelsea Marmor are excited to cover sales tax topics at the Institute for Professionals in Taxation’s 2024 Annual Conference. The conference offers panels that cover a range of topics, including credits and incentives, property tax, sales and use tax, and state income tax. Chelsea’s panel will highlight the taxability of digital goods and digital products in 2024, and Jeremy’s panel will discuss how to manage audits.

Find more information here.

The NYU School of Professional Studies is hosting its annual Introduction to State and Local Taxation Conference, which explores the essentials of sales and use tax and multistate income tax, on July 22-23. Held in Times Square, this SALT school is taught by leading practitioners and is ideal for those who are new to SALT or those who want to brush up on the most important SALT topics.

The conference topics include:

  • Sales and use taxation:
    • The scope of tangible personal property and other key definitions
    • Taxation of information, data processing and other computer-related services
    • Marketplace sales tax collection
    • Exemptions and administration
    • Local sales and use taxes
    • Common audit issues
  • State corporate income taxation:
    • Determining the corporate income tax base
    • Conformity to the federal income tax base
    • The unitary business principle
    • Allocation and apportionment
    • The single sales factor
    • Filing methods, including combined reporting
  • Gross receipts taxes
  • State tax administration
  • And more

We hope to see you there! For more information, or to register, click here.

This week, the New York Court of Appeals agreed to hear Dynamic Logic’s appeal regarding the taxability of its services that measure the effectiveness of advertising campaigns. The state Tax Appeals Tribunal previously held that the services were taxable information services in part because of the primary function test. 

In this Law360 article, SALT Partner Liz Cha noted that the New York State Department of Taxation and Finance has been aggressive in its assessments of what services should be classified as taxable information services and that the case could provide some clarity on the primary function test.

“It’s been a while since the New York Court of Appeals has weighed in on applying the primary function test to the taxation of information services and additional guidance would be helpful in this area,” she said.

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: A new law in Connecticut expands a tax credit program for employers that make what type of payments?

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!

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: Which state’s Senate recently passed a bill establishing a hospital tax to further fund the state’s Medicaid program?

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!

California legislators released bill language addressing Governor Gavin Newsom’s “May Revise” to the state budget that includes the Governor’s so-called “apportionment fix.” If enacted, Assembly Bill 167 and Senate Bill 167 will suspend net operating losses for tax years beginning on or after January 1, 2024 and before January 1, 2027. Similarly, the legislation applies a $5,000,000 limit on most business tax credits for those same years. 

As expected, both bills contain language that retroactively changes California’s apportionment provisions by excluding factors from the apportionment formula if the related income is not taxed.

Read the full Legal Alert here.

The state tax landscape evolved at a significant pace during 2023, and there is no sign of a falloff in 2024. During the 2024 Federation of Tax Administrators’ Annual Meeting, SALT Partner Jeff Friedman will help review and provide his perspective on significant state tax policy developments. Find more information and register here.

In addition, SALT attorneys Eric Tresh and Laurin McDonald will present a state tax controversy update during the TEI Region 8 Conference on June 13, focusing on key developments and trends. Find more information and register here.