On October 15, 2022, the Utah State Tax Commission published a proposed amendment to its rule governing the taxation of custom software for sales and use tax purposes, clarifying that the sale, rental or lease of custom computer software constitutes a sale of personal services that is not subject to tax, regardless of the form in which the software is purchased. The proposed amendment is a clarification of the Tax Commission’s longstanding position that such transactions are not subject to the sales and use tax. Under the current rule, charges for services such as software maintenance, consultation in connection with a sale or lease, enhancements, or upgrading of custom software likewise are not taxable.

According to the notice, comments on the proposed amendment are due November 14, 2022, and, if approved, the amendment is expected to take effect on November 21, 2022.

UTAH STATE BULLETIN, October 15, 2022, Vol. 2022, No. 20, R865-19S-92.

Approximately 34 states require market sourcing to source sales of other than tangible personal property. Many states adopted market-sourcing rules in recent years and are only now beginning to finalize regulations regarding their implementation. A number of states have also adopted market-sourcing regulations attempting to provide additional clarity through more detailed rules.

In this installment of A Pinch of SALT in Tax Notes State, Eversheds Sutherland attorneys Eric Tresh and Liz Cha examine market-sourcing regulations in California, Illinois, and New York, and advise taxpayers to use customer-specific information in their books and records to determine what sourcing approach to use.

Read the full article here.

This episode of the SALT Shaker Podcast, hosted by Eversheds Sutherland Associate Jeremy Gove, launches a new series in the history of the podcast – discussing landmark tax cases and analyzing their continued impact on state and local tax.

For the first episode of this series, Jeremy welcomes the series’ recurring guest, Partner Jeff Friedman, to discuss the U.S. Supreme Court’s foundational state tax dormant Commerce Clause case, Complete Auto Transit, Inc. v. Brady. Jeremy and Jeff discuss the history of cases that gave rise to the Complete Auto dispute, while contextualizing what the 4-prong test laid out in Complete Auto still means. They also share a few interesting insights from Justice Harry Blackmun, the author of the Court’s unanimous decision in Complete Auto.

Once their in-depth conversation concludes, Jeremy wraps up with another edition of overrated/underrated – Is not giving out candy on Halloween overrated or underrated?

Plus, don’t miss your chance to win some Eversheds Sutherland swag!

Questions or comments? Email SALTonline@eversheds-sutherland.com. You can also subscribe to receive our regular updates hosted on the SALT Shaker blog.





Listen now: 

Subscribe for more:


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 Supreme Court of Mississippi held that which digital product is not subject to sales tax as tangible personal property or specified digital products?

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. Answers will be posted on Saturdays in our SALT Shaker Weekly Digest. Be sure to check back then!

Our SALT team loves nothing more than the chance to have some fun, and this year’s Halloween holiday was no different!

From furry friends to festive kiddos, check out our team’s creative costumes.

Feel free to send along your SALT family costumes to SALTonline@eversheds-sutherland.com!

1: Partner Charlie Kearns donned glasses and a name badge as Milton from the movie Office Space, while his daughter Ella was a witch this year.

2: Partner Jeff Friedman’s daughter Sarah paid homage to the late Supreme Court Justice Ruth Bader Ginsburg.

3: Counsel Charles Capouet’s daughters Charlotte and Chloe celebrated a successful Halloween outing.

4, 8: Tori Caracci and her husband Matthew dressed as Fred, Wilma, Pebbles and Dino Flintstone with the help of their daughter, Rosalind and furchild.

5: Partner Ted Friedman’s son Van and daughter Georgie got in on the fun as a knight and fairy princess.

6: Partner Nikki Dobay’s pup Rosie (our SALT October Pet of the Month!) said you should eat mor chikin!

7: Associate Sam Trencs’ son Jack was easily the cutest pumpkin in the patch.

9: Associate Cat Baron’s dog Winston (another SALT Pet of the Month honoree!) took a play out of his mom’s book, and dressed up as the SALT cap!

10: Associate Alla Raykin’s dog Claude was the fiercest Bat-dog at the dog park.

11, 12: Paralegal specialist Jaime Lane joined her kids Cassidy and Cooper in on the fun, as the group dressed as a vintage cheerleader, dark angel and twisted ring leader.

13, 14: Candice Alba’s daughter Olivia tried her hand as Padme from Star Wars, while son Marcos was an intense dragon.

15: Associate Jeremy Gove’s son Archer dressed as Peter Venkman from the Ghostbusters.

16: Halloween was a family affair for Associate John Ormonde, with costumes on both he, his wife and their two daughters, Betsy and Audrey.

17, 21: Melissa Bragg’s daughters Emma and Madelyn didn’t miss the chance to dress up, opting for Stitch from Lilo & Stitch, as well as Dorothy from the Wizard of Oz. And, you can’t forget pumpkin pup Lola!

18: Partner Maria Todorova’s son Nicholas spooked the neighborhood as Jason Voorhees from Friday the 13th, while daughter Addison transformed into a dead Alice in Wonderland.

19: Partner Tim Gustafson’s son Luke donned his best pirate skeleton costume, and daughter Cate dressed as a pink cow.

20: Partner Jonathan Feldman slipped on a long, curly wig as Adam Neumann of WeWork fame, while his wife Jenifer dressed up as Anna Delvey from Inventing Anna.

22: Business Development Specialist Pamela Wimmer’s son Nathan collected a lot of candy as Mario!

D.C. Attorney General Karl Racine announced on October 27th that his office filed suit against a delivery service company, claiming that the company’s workers are employees, not independent contractors.[1] The AG argues that the Company’s delivery drivers “bear all the hallmarks of employee status.”[2] This lawsuit follows another tax-related complaint filed by the AG earlier this year.

D.C. Universal Paid Leave Act: Payroll Tax

Generally, businesses that pay unemployment insurance taxes also must pay the District’s Universal Paid Leave Act (“UPLA”) payroll tax as of July 1, 2019.  The AG alleges that the Company was a “covered employer” required to – but that did not – pay taxes related to its drivers.[3]

Determining employer tax liability under the UPLA is similar to determining employer liability for unemployment insurance tax purposes. Under the UPLA, the default rule is that if a covered employer pays District unemployment insurance tax on an employee for a quarter, then the employee is presumed to be a covered employee. Employers may rebut this presumption by showing that: (1) the employee worked at least 50 percent of their work time in a single jurisdiction outside of the District, and (2) the work performed outside of the District was not incidental in nature, temporary or transitory in nature, or consisting of isolated transactions.

In addition to underpaid UPLA taxes, the AG also seeks penalties and interest as allowed under the UPLA.[4] Penalties and interest under the UPLA are calculated in the same manner as under the District’s unemployment insurance tax law – interest accrues at 11.5% per month on unpaid tax and penalties accrue at 10% of the amount due.[5]

Other Allegations and Claims for Relief

On top of alleging violations of the UPLA, the AG also alleges violations of the District’s: Minimum Wage Revision Act, D.C. Code § 32-1001, et seq.;[6] Sick and Safe Leave Act, D.C. Code § 32-531.01, et seq.;[7] Wage Payment and Collection Law, D.C. Code § 32-1301, et seq.;[8] and Workers’ Compensation Act, D.C. Code § 32-1501, et seq.[9]

The AG seeks a declaratory judgment that the Company’s alleged worker misclassification violates the above-referenced District law and the workers at issue should have been classified as employees under those provisions, as well as an injunction that the Company should be prohibited from allegedly continuing to misclassify its workers. The AG alleges various damages, including unpaid wages due to the alleged “employees,” and statutory penalties associated with the alleged violations of District law.

Stay tuned to Eversheds Sutherland’s SALT Shaker Blog for continuing information on this case, D.C. payroll tax matters and the AG’s continued pursuit of tax cases.

[1] District of Columbia v. Shipt, Inc., Case No. 2022-4909 (D.C. Super. Ct. filed Oct. 24, 2022) (“Complaint”).

[2] Complaint at ¶ 5.

[3] See Count V, ¶¶ 95-96 (citing D.C. Code §§ 32-541.01(22), -(3)–(4)).

[4] Complaint at Prayer for Relief, ¶ f.

[5] D.C. Code §§ 32-541.03(f), 51-104(c).

[6] Complaint Counts I and II, ¶¶ 70-81.

[7] Complaint Count III, ¶¶ 82-85.

[8] Complaint Count IV, ¶¶ 86-93.

[9] Complaint Count VI, ¶¶ 99-104.

This week, Eversheds Sutherland Partners Jeff Friedman, Charlie Kearns and Dan Schlueter will present on a variety of tax topics during the 2022 Broadband Tax Institute Annual Conference in Palm Beach, FL.

Topics will include:

  • October 31 − Litigation Trends in State Taxation – Jeff Friedman
  • October 31 − State Tax Policy − Charlie Kearns
  • November 1 − Property Tax – Current Developments/LitigationDan Schlueter

In addition, Eversheds Sutherland Partners Nikki Dobay and Tim Gustafson will present during the 2022 Annual Meeting of the California Tax Bar and California Tax Policy Conference, held in San Diego, CA from November 2–4, 2022.

Nikki will help present Legislative Updates, covering a review of this year’s legislation and other pertinent issues related to legislation. In addition, Tim will present What’s New in Local Taxes?, discussing California’s local tax developments and its impacts on local jurisdictions, taxpayers and local tax law.

View and learn more about past and upcoming events and presentations for the SALT team.

Meet Rose of Pinot Noir, a.k.a. Rosie! Rosie makes her home in the Pacific Northwest with Partner Nikki Dobay and her husband, Per. Rosie leapt into their lives and hearts in April, and gets her name as an homage to her older sister Grapes, who passed away earlier this year. Rosie was born two days after Grapes’ passing, so Nikki and Per are fairly certain she is Grapes’ reincarnation!

As an eight-month-old Rat Terrier, she’s wiggled her way into their hearts with her terrier attitude and little ear nibbles. Rosie loves to munch on any and all treats, but she is particularly fond of scones. Rosie’s fondness was acquired at a young age when Nikki and Per took her to a local coffee shop each day to socialize her. Now, she gets very upset after her morning run if the scone delivery has not been made!

When she isn’t munching on scones, Rosie loves to run on the trails in Forest Park in Portland. She also loves to play with other dogs – the bigger, the better! She’s developing a fondness for wine tasting, like Grapes before her. She gets a lot of attention at local wineries, and with a name like Rose of Pinot Noir, plus a cute face, how can they resist?

Waking up with Rosie is really something – after having her breakfast and a trip to the yard, she bounds back up to bed where she proceeds to become Lady Piranha – a high energy pup who wakes her owners up with kisses and nibbles!

Nikki and Per are thrilled to have the sweet and loving addition to their family. They miss Grapes every day, but are looking forward to many years with Rosie and the possibility of her having a sister in the future.

Welcome, sweet Rosie!


In this episode of the SALT Shaker Podcast policy series, Eversheds Sutherland attorneys Nikki Dobay and Cat Baron tackle part II of their discussion about the need for a multistate Power of Attorney (POA) form and the progress being made in the quest to create one. In case you missed it, you can catch up on part I of their discussion here.

For part II of the series, Nikki and Cat welcome Nicole Power, Research and Relationships Manager at Stripe Tax, as well as Scott Peterson, Vice President of U.S. Tax Policy and Government Relations at Avalara for a discussion of the significance of the project.  Nicole and Scott explain why streamlining the POA process is so critical. They also discuss what would be helpful from a states’ perspective in order to embrace the proposed changes and next steps.

Nikki wraps up the episode with their choice of a timely non-tax question – what are you going to dress up as for Halloween, or what’s your favorite Halloween wine?

The Eversheds Sutherland State and Local Tax team has been engaged in state tax policy work for years, tracking tax legislation, helping clients gauge the impact of various proposals, drafting talking points and rewriting legislation. Partner Nikki Dobay, who has an extensive background in tax policy, hosts this series, which is focused on state and local tax policy issues.

Questions or comments? Email SALTonline@eversheds-sutherland.com. You can also subscribe to receive our regular updates hosted on the SALT Shaker blog.

Listen now: 

Subscribe for more: