Meet sweet Zita, our August Pet of the Month and rescue pup belonging to Jace Chevalier, Senior Tax Manager at T-Mobile. Named after the children’s book series “Zita the Spacegirl,” Zita joined the Chevalier family in 2021 by way of the Houston K-911 Rescue.

Jace and his family speculate that Zita is a Corgi and Pit Bull mix. They are one hundred percent certain, though, that she’s a good girl!

The five-year-old’s favorite munchies are bananas and sunflower seeds, and she also enjoys her two daily walks, chasing balls at the park and sunbathing on the deck.

Her morning routine of stretching, rolling around on her back, and making good morning sounds is pretty funny. It also didn’t take her long to figure out how to remove that sweater she’s wearing in the picture below!

We’re happy to have you, Zita!

On August 9, join Eversheds Sutherland attorneys Charles Capouet, Cyavash Ahmadi and Meriem El-Khattabi for a review of the long-standing SALT Scoreboard publication and the important state tax cases from the first half of 2023. In addition to recapping case opinions, Charles, Cyavash and Meriem will analyze case trends and compare 2023’s results to prior years’ case tallies.

Register to join us here.

An Illinois Appellate Court affirmed a circuit court’s dismissal of a qui tam action filed against a United Kingdom-based tailoring shop. The court held that although the tailor’s failure to investigate its use tax collection obligations was “an ostrich-type situation,” the tailor nevertheless did not violate the Illinois False Claims Act.

 The Illinois False Claims Act provides two theories of liability:

  1. knowingly making, using, or causing to be made or used a false record or statement material to an obligation to pay or transmit money or property to the State; or
  2. knowingly concealing or knowingly and improperly avoiding or decreasing an obligation to pay or transmit money or property to the State.

The Act defines “knowingly” to include a person: (i) having actual knowledge of the information; (ii) acting in deliberate ignorance of the truth or falsity of the information; or (iii) acting in “reckless disregard” of the truth or falsity of the information.  The Relator claimed the tailor’s failure to investigate its tax responsibilities was reckless disregard of the tax law. 

The tailor’s failure to investigate its use tax obligation could have been sufficient to demonstrate that it acted with reckless disregard, but the Relator failed to seek and submit discovery on the tailor’s nexus with Illinois to support a finding of scienter, i.e. the requisite knowledge under the False Claims Act.

Further, in choosing to use the words “avoid” and “conceal,” the court found that the legislature intended to cover only those persons who intentionally choose not to meet their tax obligation, rather than a merely failing to pay tax.

The record failed to show the tailor knowingly concealed, avoided, or decreased an overpayment it received from the State of Illinois. Therefore a dismissal of the qui tam action was warranted.

People ex rel. Stephen B. Diamond PC v. Henry Poole & Co. LTD, No. 2018 L 10136 (Ill. App. Ct. June 30, 2023).

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 legislature recently overrode a governor’s veto of a bill that creates a payroll tax to increase funding for child care?

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 power and reach of administrative agencies — often led by unelected officials — has long been a source of controversy. Nearly 40 years ago, in Chevron U.S.A. Inc. v. Natural Resources Defense Council Inc., the U.S. Supreme Court held that an administrative agency’s interpretation of a statute administered by that agency should be given deference if (1) the statutory provision is ambiguous and (2) the agency’s interpretation is merely reasonable. Since then, the case “has become ‘the most cited case in modern public law.’” For state tax practitioners, this is nothing new — deference to a tax collector’s interpretation of the tax law was taken for granted well before Chevron was decided, and its application extended beyond formally promulgated regulations.

Wide variation between and within states’ administrative deference doctrines are problematic for obvious reasons. Taxpayers and businesses are harmed when there is uncertainty whether the law will be applied the same way in factually (and substantively) similar circumstances. But the rise of state tax tribunals, recent judicial opinions, and legislative and voter actions call into question the continued existence and viability of Chevron and related doctrines: How much deference should tax administrators be entitled to (if any)?

In this installment of A Pinch of SALT in Tax Notes State, Eversheds Sutherland attorneys Jonathan Feldman, Cyavash Ahmadi and Cat Baron explore the deference afforded to state administrative agencies and suggest that, perhaps, the high-water mark is behind us.

Read the full article here.

The New Mexico Taxation and Revenue Department recently updated FYI-206, which describes the gross receipts tax collection responsibilities for online marketplace providers and sellers. The updated guidance reflects the new reduced gross receipts tax rate used for out-of-state taxpayers, 4.875%. Additionally, the updated guidance provides that marketplace providers may use Form TRD-31117, Marketplace Provider Data Sharing Agreement, to report to the Department a list of marketplace sellers it facilities sales for and paying gross receipts tax on those sales.

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 recently approved legislation that requires its revenue services department to study the possibility of creating a blanket sales and use tax exemption for nonprofit organizations?

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!

Curious what the top 10 sales tax issues for 2023 are? Join Eversheds Sutherland attorneys Jonathan Feldman and Alla Raykin as they cover this topic during the Southeastern Association of Tax Administrators (SEATA) 73rd Annual Conference in Little Rock, AR on July 18.

For more information and to register, click here.

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

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 Washington Court of Appeals recently held that a provider of what type of services for its affiliate’s enrollees met the insurance business exemption to the B&O tax?

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!