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

We will award a prize for the smartest (and fastest) participant.

This week’s question: Which East Coast city recently proposed a retail delivery fee on orders delivered within city limits?

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!

In this episode of the SALT Shaker Podcast, Partners Jeremy Gove and Chelsea Marmor examine a pivotal moment in any state and local tax controversy: whether to take the next step after a tax assessment has been issued.

Jeremy and Chelsea walk through the key factors they consider when deciding whether to challenge an assessment following an audit. They emphasize that the decision is rarely straightforward and often requires balancing several considerations, such as financial significance, procedural nuances, confidentiality protections, and the forum’s independence and expertise.

Their conversation concludes with a focus on litigation readiness, underscoring why building a strong evidentiary record during the audit stage is critical to preserving options and positioning a case for success beyond the administrative level.

In closing, they wonder if buying a “mystery” book at the bookstore is overrated or underrated.

For questions or comments, email SALTonline@eversheds-sutherland.com. Subscribe to receive regular updates hosted on the SALT Shaker blog.

Listen now:

Subscribe for more:

Members of our SALT team are pleased to participate in Tax Executives Institute’s (TEI) 2026 Midyear Conference, taking place March 16–18 at the Grand Hyatt Washington, DC.

The annual conference brings together in‑house tax professionals and advisors from across industries for timely discussions on corporate and state tax developments. This year, SALT partners will present on several panels addressing key issues impacting multistate businesses, including state tax policy trends, gross receipts taxes, digital taxation, and sourcing challenges.

Speakers and panels include:

  • Todd Betor – Beyond Income Tax: The Latest in Gross Receipts Trends
  • Michele Borens – The Invisible Customer: Navigating State Look‑Through Sourcing
  • Jeff Friedman – Everything Everywhere All at Once: State Taxation of Ads, Data, and Information Services
  • Charlie Kearns – Mapping the Landscape: Emerging Trends in State Tax Policy

We’re pleased to support TEI and look forward to engaging with tax professionals throughout the conference.

The New York Supreme Court, Appellate Division, affirmed a decision of the Tax Appeals Tribunal, which determined that a company’s charges for a proprietary technological platform, referred to as a “vendor management system” (VMS), constituted licenses to use prewritten computer software that were subject to sales tax. The company matched clients with suppliers of contingent and temporary labor and provided services associated with the management, retention and invoicing of the labor. To provide the services, the company used the VMS, access to which was controlled by agreements with each client and each labor supplier. The company maintained that it was not selling software licenses, but that it was providing nontaxable services to customers through its VMS platform. The court rejected the company’s argument, finding that various client agreements demonstrated that the company provided its customers the “right to use” software and, accordingly, a license to use software within the meaning of the New York sales tax law.  The court also upheld the Tribunal’s determination that the use of the VMS software was “central” to the company’s services, rather than incidental, concluding that there were no grounds to disturb the Tribunal’s determination that the license provided by the company was the “core function of the transactions at issue,” rendering them subject to tax as a sale of tangible personal property. 

Matter of Beeline.com, Inc., v. State of N.Y. Tax Appeals Trib., CV-24-1494 (N.Y. App. Div. Jan. 15, 2026).

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

We will award a prize for the smartest (and fastest) participant.

This week’s question: The Multistate Tax Commission is currently working on which of the following uniformity projects?

  • (A) State Taxation of Partnerships
  • (B) Receipts Sourcing Regulation Review
  • (C) Sales Tax on Digital Products
  • (D) All of the above.

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!

This year’s Georgia’s legislative session is quickly progressing and the General Assembly has proposed significant legislation addressing income and property tax reform. Last Friday, March 6, 2026, was “Crossover Day” – the 28th legislative day of 40 total legislative days – marking the deadline by which all bills must have passed one legislative chamber to cross over for consideration by the other chamber. Although there is an opportunity for tax provisions to be added to other bills later, bills that have not passed one chamber prior to crossover are generally dead for this session. Georgia’s Constitution provides that “[a]ll bills for raising revenue…shall originate in the House…”, so the majority of tax bills still alive for the year now go over to the Senate for final passage before the end of the session. However, as indicated in our alert, the Senate has drafted and passed a number of bills related to revenue which have now passed over to the House. The final legislative day, Sine Die, or the 40th legislative day is on April 2, 2026.

Read the full legal alert here.

The Utah State Legislature is poised to enact a “targeted advertising” tax, the first of its kind in the U.S. This tax is similar to, but distinct from, Maryland’s digital advertising gross revenues tax and Chicago’s social media amusement tax.

The legislation enacting the tax, S.B. 287, has been agreed-upon by both chambers and has been signed by the Speaker of the House. Only the Senate President’s signature is needed before the bill is enrolled and transmitted to Governor Spencer Cox. The governor would then have 20 days to sign or veto S.B. 287. Otherwise, the bill will become law on March 26, 2026. If the governor vetoes the bill, the legislature has the opportunity to override the veto with a two-thirds vote in both chambers. Assuming S.B. 287 becomes law, however, the targeted advertising tax takes effect on January 1, 2027, with the first annual return due in 2028.

Utah’s targeted advertising tax will be imposed on a “targeted advertising entity” at the rate of 4.85% of “the targeted advertising entity’s gross receipts for the taxable year derived from targeted advertising in the state.” A “targeted advertising entity” is a business that meets the following three requirements during the taxable year:

  • The entity delivers targeted advertising to an audience or individual located in Utah;
  • The entity generates gross receipts of at least $1M from targeted advertising in Utah and at least $100M from all targeted advertising, regardless of location; and
  • Targeted advertising gross receipts constitute at least 50% of the entity’s total gross receipts.

“Targeted advertising” means, in relevant part, a transaction in which:

  • The entity sells advertising space to the advertiser through a bidding process;
  • The entity obtains or develops individualized data profiles to deliver the advertisements; and
  • An individual viewing the advertisement has the ability to interface with the advertisement to access information or make a purchase, including through a link or a QR code.

The tax base is apportioned based on the ratio of in-state impressions to the total impressions. An “impression” is “a single instance in which targeted advertising is delivered to an audience or individual, regardless of whether the audience or individual interacts with the advertisement.”

A targeted advertising entity must annually remit to the Utah State Tax Commission a return in a format prescribed by the Commission. The bill permits the Commission to create rules for the administration, collection, and enforcement of the tax, including the due date of the annual return.

Most of the revenue from the tax is deposited into a restricted account which can be used for a variety of services for children including, among other things, literacy programs, youth sports or recreational programs, adoption and foster care services, and public education or awareness campaigns regarding the effects of targeted advertising on children, families, and adults.

Eversheds Sutherland will continue to track and analyze ongoing new taxes on digital services.

The Texas Court of Appeals held that crude oil stored in tank farms in San Patricio County solely for export to foreign buyers was constitutionally immune from county ad valorem taxation under the Import-Export Clause of the U.S. Constitution. The court concluded the oil constituted property in the stream of export overseas and therefore could not be taxed by the county.  

The taxpayers, two affiliated U.S. entities of a foreign parent, sold crude oil exclusively to non-U.S. buyers. To fulfill those sales, the taxpayers transported crude oil via a third-party pipeline to export tanks in San Patricio County, where the crude oil was temporarily stored before being loaded onto vessels and shipped overseas. At no point was the oil sold into, or diverted to, the domestic market.  

Affirming the trial court’s decision, the Court of Appeals relied on U.S. Supreme Court and Texas Supreme Court precedent recognizing bright‑line constitutional immunity for property in the stream of export. The court emphasized that the oil’s foreign destination was fixed and irrevocable. The taxpayers’ sales contracts were exclusively with foreign buyers, and the oil was transported to San Patricio County solely to facilitate export. The temporary storage of the oil in export tanks was not a break in transit, but a necessary and integral step in the export process – allowing the oil to await vessel availability and loading for overseas shipment. Because the record established that the oil was committed to foreign export and never entered, or was capable of entering, the domestic market, the court held that San Patricio County was constitutionally prohibited from imposing ad valorem tax on the oil.

San Patricio Cnty. Appraisal Dist. v. Gunvor USA LLC, No. 13-24-00590-CV, 2026 WL 59714 (Tex. App. Jan. 8, 2026).

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

We will award a prize for the smartest (and fastest) participant.

This week’s question: Which state legislature recently introduced a bill that would impose a 50% tax on a private detention facility’s gross revenue?

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 California Office of Tax Appeals held that storing inventory at a third-party warehouse constitutes “doing business” for income and franchise tax purposes.

The taxpayer was a Pennsylvania-based corporation making online sales of apparel through a third-party digital marketplace. The taxpayer also contracted with the marketplace to hold and ship inventory from warehouses (fulfillment centers) to customers in various states. In 2018, the California Department of Tax and Fee Administration (CDTFA) sent the taxpayer a letter informing it that CDTFA received information that appellant had inventory stored in fulfillment centers located in California and as such, met the definition of a retailer engaged in business in California for sales and use tax purposes. CDFTA informed the taxpayer that it was therefore required to register with CDTFA, file sales and use tax returns, and pay tax on sales made to consumers in California – all of which the taxpayer did.

Subsequently, the Franchise Tax Board (FTB) received the taxpayer’s gross sales information from the CDTFA and issued an assessment for the $800 minimum franchise tax plus penalties, and enforcement fee, and interest. The definition of “doing business” in California, specifically, Cal. Rev. & Tax. Code § 23101(b), includes a bright line test: (1) sales of the taxpayer in California exceed the lesser of $500,000 or 25 percent of the taxpayer’s total sales; (2) the real property and tangible personal property of the taxpayer in California exceed the lesser of $50,000 or 25 percent of the taxpayer’s total real property and tangible property; or (3) the amount paid in California by the taxpayer for compensation exceeds the lesser of $50,000 or 25 percent of the total compensation paid by the taxpayer. Although the taxpayer was nowhere near these thresholds, the OTA found that the taxpayer was doing business in California under subdivision (a) of section 23101, finding “appellant’s storage of inventory and sales in California during the 2019 tax year satisfies the criteria of ‘actively engaging in any transaction for the purpose of financial or pecuniary gain or profit’ for income tax purposes.”

This decision is a good reminder that one may be “doing business” in California under section 23101, subdivision (a), even if the bright-line thresholds in subsection (b) are not met, and that the California tax agencies communicate with each other.

Appeal of Fishbone Apparel, Inc., OTA Case No. 230212546, 2025-OTA-141 (December 29, 2025).