In this episode of the SALT Shaker Podcast, host and SALT Counsel Jeremy Gove sits down with Partner Tim Gustafson to explore the historical evolution and current challenges surrounding California’s sales factor.

The conversation traces California’s apportionment journey from its original equally weighted three-factor formula to today’s dominant single sales factor approach. Jeremy and Tim unpack key developments, including:

  • California Supreme Court decisions shaping the definition of “gross receipts”
  • A voter-approved initiative accelerating the shift to a single sales factor
  • Regulatory amendments relating to market-based sourcing

The episode concludes with a discussion of a recent legislative change redefining “gross sales” as “net sales” – a retroactive adjustment now facing legal challenges for its conflict with prior judicial interpretations.

Plus, don’t miss the overrated/underrated segment, where Jeremy and Tim share their hot takes on card games.

For a deeper dive into this topic, check out Tim’s article, published in Tax Notes State, which he co-wrote with Associate Constance Chien.

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

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On November 13, SALT Partner Tim Gustafson looks forward to speaking at the 2025 California All-Tax Conference, presented by the California Lawyers Association. Tim’s session will provide the latest updates from the California Office of Tax Appeals, featuring a comprehensive year-in-review of key developments and opinions, insights into recent updates from the past year and a live Q&A with OTA staff.

Learn more and register here.

Meet Luna and Yordy, two lovable rescue pups who have brought plenty of personality (and a little bit of chaos!) to the home of Joe Moore, Vice President, Corporate Tax at Costco.

Luna, a two-year-old white Labrador, is a big, goofy sweetheart who likes to avoid tiny humans at all costs. Her family has learned to steer clear of parks and morning bus stops, but when it comes to hanging out with other dogs, she’s all in!

Yordy, a three-year-old shepherd mix, is the chiller member of the duo. That is, until a bunny or squirrel dares to cross his path – that’s when the chase begins!

Both pups have had their fair share of adventures, including a couple of great escapes. These days, they sport trackers on their collars, just in case curiosity gets the better of them again.

Training is ongoing (and often entertaining). Luna is still working through her feelings of being left alone in the house, and her humans have discovered that leaving a grocery bag on the counter is a surefire way to ease her anxiety without causing too much damage. She will grab the bag off the counter and shred it for comfort. 

Despite their quirks, Luna and Yordy are adorable and always ready for a cuddle at the end of the day.

Welcome to the SALT Pet of the Month family, Luna and Yordy!

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 recently sued California alleging that the occasional sale rule applicable for purposes of apportioning corporate income is unconstitutional?

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 adopted UDITPA in 1966, with its equally weighted three-factor formula for apportioning multistate income – property, payroll, and sales. Over time, however, the sales factor has emerged as the primary mechanism for determining tax liability in California.

Today, California’s sales factor is the same as it was nearly 60 years ago. Although the fraction itself may not have changed, its interpretation and application have evolved at the hands of the Legislature, the California Franchise Tax Board, and California courts. And that evolution continues apace.

In this installment of “A Pinch of SALT,” published by Tax Notes State, Eversheds Sutherland attorneys Tim Gustafson and Constance Chien provide a brief timeline of key California sales factor developments over the past 25 years and examine issues that will drive change for the next 25 years and beyond.

Read the full article here.

This week, SALT Partners Michele Borens and Charlie Kearns are pleased to present at the ETA Payments Compliance Conference, held November 5–6 in Pentagon City, VA. On Thursday, their session will focus on considerations for payments companies in light of changes to state sales tax laws.

For more information and to register, click here.

In addition, SALT Partners Jonathan Feldman and Scott Wright will share a SALT update at the 2025 Georgia Tax Forum, hosted by The Georgia Society of CPAs. Their presentation will highlight recent developments in state and local tax policy, litigation trends, and planning opportunities for Georgia-based businesses.

You can find more information here.

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 mayor of which midwestern city included a new social media tax as part of the 2026 proposed budget?

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, SALT Counsel Jeremy Gove and Chelsea Marmor dive into the evolving intersection of artificial intelligence (AI) and SALT.

As AI technology continues to advance, Jeremy and Chelsea draw a parallel for tax purposes to the early days of the internet – when Congress passed the ITFA to avoid taxes stifling innovation. They explore whether the existing framework for taxing software and digital products is sufficient to address AI, or if new legislation will be needed to keep pace.

Jeremy and Chelsea highlight recent developments in Indiana and Illinois, where revenue rulings classified remote generative AI chatbot services as non-taxable under the states’ existing definitions of SaaS and electronically delivered software.

The episode wraps with a brief discussion on the potential for federal intervention in regulating and taxing AI, leaving listeners with key questions about how SALT professionals should prepare for what’s next.

And, as always, the hosts close out with their overrated/underrated segment – this time tackling the world of science fiction.

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

Listen now:

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A Florida circuit court held for the Department of Revenue in a dispute over Florida’s apportionment formula applicable to companies providing transportation services in the state. Florida apportions income of transportation companies by multiplying the taxpayer’s income by a fraction, the numerator of which is “revenue miles in [Florida]” and the denominator of which is “revenue miles everywhere.” Florida defines the phrase “revenue miles in [Florida]” to include all miles traversed within Florida’s geographic borders and an area of ocean contiguous to Florida’s coastline.

An airline asserted that the Florida apportionment statute was unconstitutional because it violated the “internal consistency” test of the Dormant Commerce Clause. The airline argued that the statute was not internally consistent because it used air miles flown both over Florida’s landmass and over the ocean contiguous to Florida’s coastline to calculate the share of the airline’s income attributable to Florida. The court disagreed with the airline, holding that Florida’s statute was internally consistent because “if a hypothetical state were to directly import Florida’s geographical description minus Florida’s landmass, its statute would still not be ‘identical’ to Florida’s structure, because Florida’s apportionment structure is related to its own land mass by contiguity.”

JetBlue Airways Corp. v. Dep’t of Revenue, No. 2024CA1177 (Fla. Cir. Ct. Sept. 1, 2025).

The Eversheds Sutherland SALT team is coast-to-coast this week, joining three major conferences to share insights on the latest developments in SALT.

Western States Association of Tax Administrators (WSATA) Annual Conference

SALT Partner Jeff Friedman returns to the WSATA Annual Conference in Albuquerque, NM to share his perspective on recent developments shaping the SALT landscape.

Explore the full conference agenda and register here.

Tax Executives Institute (TEI) 80th Annual Conference

Partner Michele Borens will speak at TEI’s 80th Annual Conference, taking place this week in San Francisco, CA. Michele will address some of the most pressing challenges in state and local taxation, offering practical strategies for navigating complex state sourcing rules.

This year’s TEI conference promises a robust agenda and networking opportunities. Find out more information and register here.

32nd Annual Paul J. Hartman SALT Forum

Finally, SALT Partners Jonathan Feldman and Jeff Friedman will speak the 32nd Annual Paul J. Hartman SALT Forum in Nashville, TN, diving into two timely topics:

  • Precedent and deference: How agency guidance, judicial deference, and statutory interpretation can shape the outcome of a state tax dispute – and what one state’s approach might mean for others.
  • Hot constitutional topics in SALT: A deep dive into how states are testing the limits of the US Constitution in their taxing authority, with focus on the Due Process Clause, Commerce Clause, Equal Protection Clause, and more.

Whether you’re attending in person or following along online, we’re excited to connect and share insights from these events.