Paws and relax as we introduce our November SALT Pets of the Month, Pebbles and Lucy!

The two adorable mutts found their furever home with Kathryn Kelly, State Tax Manager at IHG Hotels and Resorts, after being adopted from BarkVille Dog Rescue and Atlanta Lab Rescue. In December of 2021, 3-year-old English Bulldog and Australian Cattle mix Pebbles was only meant to be fostered through the holiday season but quickly became a “foster fail” after unleashing the love. In September of this year, 2-year-old German Shepherd Lab mix Lucy joined the family as well after winning Kathryn over at an adoption event with her irresistible ears.

These two enjoy piling onto the couch to watch a Braves game after being dog-tired from a long walk and wolfing down anything coated in peanut butter. Pebbles loves to treat herself to rolling in the grass, especially when the temperature drops. Funnily enough, Lucy instantly bonded with Kathryn’s cat Fred, who she is absolutely mutts about!

The journey of rescuing Pebbles and Lucy would not have been possible without BarkVille Dog Rescue and Atlanta Lab Rescue and the work they do within the Atlanta community! Kathryn encourages everyone to find ways to give back to their local rescue shelters to help save one paw at a time.

We are elated to welcome these two pups to our SALT Pet of the Month family!

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 Administrative Law Court upheld the Department of Revenue requirement that the taxpayer and its affiliates file a combined return because separate-entity filings resulted in distortion?

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 posted on Saturday in our SALT Shaker Weekly Digest. Be sure to check back then!

What should federal income tax advisors know about SALT issues? On October 30, Eversheds Sutherland SALT Partner Jonathan Feldman will revisit Wayfair and explore pass-through entity taxes as a panelist during the 58th Annual Southern Federal Tax Institute.

On November 2, Eversheds Sutherland Associate John Ormonde will serve as a panelist during the 2023 Annual Meeting of the California Tax Bar and Tax Policy Conference. His session will focus on the interplay between the California personal income tax law and the tax law for entities in the context of sourcing income.

View and learn more about past and upcoming events and presentations.

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 Massachusetts Department of Revenue recently announced a four percent surtax on taxpayers with taxable income over a certain threshold amount. What is the amount?

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 posted on Saturday in our SALT Shaker Weekly Digest. Be sure to check back then!

In an article for Bloomberg Tax, Eversheds Sutherland attorneys Liz Cha and Chelsea Marmor summarize recent tax developments in New York, including proposed corporate tax reform regulations and two court opinions on income sourcing, Matter of Techar and Matter of Jefferies Group LLC & Subs.

Read the full article here.

This week, Eversheds Sutherland is proud to support Tax Executives Institute’s 2023 Annual Conference—75th Anniversary Celebration. SALT Partners Todd Betor, Ted Friedman and Tim Gustafson will contribute to the comprehensive program that will include nearly 40 sessions focused on US federal, international, and state and local tax, as well as Canadian tax, financial reporting, and corporate tax management issues.

Presenters and topics include:

  • Tim Gustafson – Recent Developments in State Income Tax
  • Todd Betor – Accounting for State and Local Taxes: The Basics Every In-House Tax Professional Should Know
  • Ted Friedman – National SALT Litigation Update

In addition, Eversheds Sutherland is a proud sponsor of the 30th Annual Paul J. Hartman SALT Forum, held October 23 – 25 in Nashville, TN. The forum will discuss current developments as well as the practical solutions and planning opportunities in structuring and reporting state and local tax transactions.

Speakers and topics include:

  • Jeremy Gove – “Do the Due:” What To Do With Due Process
  • Maria Todorova – Market-Based Sourcing – Looking Through the Looking Glass
  • Jeff Friedman – 86-272 Sourcing and Nexus

Finally, on October 24, SALT Partner Dan Schlueter will cover current property tax developments and litigation during the 2023 Broadband Tax Institute (BTI) Annual Conference, held in Scottsdale, AZ.

View and learn more about past and upcoming events and presentations.

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 commissioner recently determined that a data center operator was entitled to a sales and use tax refund on its equipment purchases?

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 posted on Saturday in our SALT Shaker Weekly Digest. Be sure to check back then!

The Ohio Board of Tax Appeals denied an out-of-state healthcare organization’s apportionment of the Commercial Activity Tax related to healthcare services.

The taxpayer sought to apportion its gross receipts related to laboratory services and healthcare provider services based on where the taxpayer’s costs were incurred. The Board rejected the taxpayer’s position and found that the lab work and healthcare provider services are sourced based on where the benefit of these services is received. Citing to Defender Security Co. v. McClain, 162 Ohio St.3d 473 (2020), in which the Ohio Supreme Court held that under Ohio’s sourcing rule, the “paramount” consideration when determining what proportion of the benefit is attributed to Ohio is the physical location where the purchaser actually used and received the benefit of what was purchased. The Board found that while some of the services were conducted outside of Florida, the benefit of the services is received where the Ohio patients are located. 

The Board also noted that even if the laboratory testing and administrative services could be sitused outside of Ohio, the taxpayer failed to support its apportionment method with sufficient documentation. 

Total Renal Care Inc. v. Harris, No. 2019-848 (Ohio Bd. Tax App. July 24, 2023) (unpublished).

The taxpayer, a designer, marketer, and wholesaler of apparel, footwear, jeans, and other fashion accessories, shipped products to Ohio-based distribution centers of major retailers and paid the commercial activity tax for all items shipped to the distribution centers, even those that were ultimately received by customers outside of Ohio. The taxpayer applied for a refund for gross receipts realized from products that were sent to Ohio distribution centers but were ultimately shipped to locations outside of Ohio. The taxpayer provided labels for most of the retailers it shipped to that showed where the products would ultimately be delivered, and the Department of Taxation accepted those as sufficient evidence to situs those sales outside of Ohio. However, for two retailers (DSW and Dressbarn), the labels did not indicate where the products would ultimately be delivered, so the Department sitused those sales to Ohio.

The taxpayer appealed the refund denial to the Ohio Board of Tax Appeals. At the hearing the taxpayer provided evidence in the form of a report showing the distribution of each DSW product throughout all of its stores. This report was based on a data sample collected from DSW’s website over a 3-month period using custom software. The Department argued that the Board should only consider information the taxpayer had at the time it sold the products to DSW and Dressbarn and, that as far as the taxpayer knew at the time, the products were delivered to purchasers in Ohio.

While the Board rejected the Department’s argument that the taxpayer must have contemporaneous knowledge of the ultimate destination of the product at the time it is transported, the Board also determined that the taxpayer failed to meet its burden in proving that the Department’s findings (i.e., that the DSW and Dressbarn products should be sitused to Ohio) were not valid. The Board stated that the representative sample used was related to a time well after the tax period and “extremely short” in comparison (the sample looked at a period of 3 months and the tax period was 6 years). The Board also mentioned that while the taxpayer’s method may be sufficient in other circumstances, it was too far removed and reflected too narrow of a time frame to establish that the products sent to DSW and Dressbarn were ultimately received outside of Ohio. As a result, the Board affirmed the Department’s final determination.

Jones Apparel Group, et al. v. McClain, Case Nos. 2020-53, 2020-54 (Sept. 13, 2023).