This week on the SALT Shaker Podcast, Eversheds Sutherland Associate Jeremy Gove welcomes Chris Emigholz, Chief Government Affairs Officer at the New Jersey Business & Industry Association (NJBIA), to the show.

First, they cover Chris’ role at NJBIA and what NJBIA does for New Jersey taxpayers. They then dive into a meaty tax discussion of current issues and legislative proposals in the state, including corporate tax rate reduction, the state’s remote work tax policies, unemployment insurance payroll taxes, and proposed changes to how New Jersey taxes GILTI.

Jeremy picks his latest overrated/underrated question from a large menu – how do you feel about diners?

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

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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: During Georgia’s 2023 legislative session, which bill would have increased the tax on tobacco and vaping products by 20 cents?

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 a recent unreported decision, the Maryland Appellate Court held that taxpayers were not entitled to a 13 percent interest rate on a judgement after the legislature lowered the state’s refund interest rate during the pendency of the taxpayers’ appeal.

The taxpayers successfully challenged the limits that Maryland state law placed on the tax credit for income taxes paid to other states. The law authorized a tax credit against state income taxes but not county income taxes. While the taxpayers’ claim was pending, the state legislature lowered the interest rate for tax refunds from 13 percent to the 2015 prime lending rate. The court characterized the lower interest rate as “sound fiscal planning” because of the estimated $200 million in potential refund claims that would be paid if the taxpayers prevailed with their claim.

The court held that the legislature set up the tax refund interest rate on “shifting sands,” and that the state has never consistently provided interest on all refunds nor locked the interest rate in place. Accordingly, the taxpayers could not reasonably rely on or have a settled expectation of a specific rate.

The court also noted that this is the fourth appeal to reach an appellate court in this controversy, deeming it a “threequel.”

Wynne v. Comptroller of Maryland, Md. App. No. 1561 (March 15, 2023).

During the 2023 legislative session, the Georgia General Assembly passed significant tax legislation including decoupling from IRC § 174, imposing sales tax on certain digital goods, and revising eligibility for the pass-through entity tax election.

March 29, 2023 was “Sine Die” or the 40th and final legislative day of the 2023 session. Both chambers of the General Assembly passed the below bills before the end of the session. These bills are now transmitted to the Governor, who can sign or veto the legislation within 40 days after the end of the legislative session. If the Governor fails to take any action, the legislation becomes law upon the expiration of the 40-day period (May 8).

Read the full Legal Alert here.

In this week’s episode of the SALT Shaker Podcast, Eversheds Sutherland Associate Jeremy Gove welcomes a fellow New York resident to the show, Partner Todd Betor. Todd recently re-joined the SALT practice in January.

Jeremy and Todd delve into a key area of Todd’s practice, SALT issues arising as a result of mergers, acquisitions, or dispositions.

Jeremy and Todd’s conversation covers a few key reasons why it’s important for SALT advisors to be involved in a deal, such as the potential disconnect between state and federal tax treatment of certain transactions. In addition, they talk about why it’s important to review major SALT considerations that go into a deal, and how the consideration of SALT issues can affect tax savings.   

They conclude with this week’s overrated/underrated consideration – Nashville hot chicken.

As referenced in this week’s show, you can read more of Todd’s key takeaways from his presentation at TEI’s 2023 M&A Seminar here.

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: Which state’s Department of Revenue recently released guidance specifying that sales of “canned” computer software are taxable sales of tangible personal property regardless of the form in which the software is transferred or transmitted?

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!

On Wednesday, March 29, Eversheds Sutherland attorneys Eric Coffill and Chelsea Marmor will participate in the TEI Philadelphia Chapter’s virtual East/West Summit, covering SALT updates on both coasts.

In addition, on Thursday, March 30, Eversheds Sutherland Partners Michele Borens, Jeff Friedman and Tim Gustafson will present at the TEI Virginia Chapter’s SALT Day, covering a legislative update as well as use tax considerations for purchasing electronically delivered software, SaaS, digital services and digital content.

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

The unitary combined reporting method for state corporate income taxation has been adopted by an increasing number of states. While combined reporting requirements vary significantly from state to state, nearly all combined reporting regimes require or allow a water’s-edge method that limits the members of a group return to entities that are incorporated in the United States and meet other combined reporting requirements. 

The water’s-edge combined reporting method makes sense for many taxpayers and stems from criticisms and litigation aimed at the worldwide combined reporting method. Problems with worldwide combined reporting include compliance challenges associated with varying accounting methods required by other countries, conversion of foreign currencies, and even the lack of available data associated with non-U.S. entities.

There are instances when a domestic incorporated entity is largely engaged in business outside the United States. To help solve this problem, many states adopted the Pareto principle, which states that “for many outcomes, roughly 80 percent of consequences come from 20 percent of causes (the ‘vital few’).” Application of an 80/20 rule in the context of water’s-edge combined reporting requires taxpayers to include in a water’s-edge return those foreign entities that conduct at least 20 percent of their business in the United States (an inbound 80/20 company), and exclude those domestic corporations that conduct at least 80 percent of their businesses outside the United States (an outbound 80/20 company).

In this installment of A Pinch of SALT for Tax Notes State, Eversheds Sutherland attorneys Jeff Friedman, Cyavash Ahmadi and Laurin McDonald describe 80/20 rules used by states in the context of water’s-edge combined reporting and the compliance issues that can arise as a result.

Read the full article here.

The Texas Comptroller of Public Accounts amended its franchise tax apportionment rule, as published in proposed form in the March 10 issue of the Texas Register. The rule, which is now final, discards the “receipt-producing, end-product act” test in light of Eversheds Sutherland’s litigation in Sirius XM Radio, Inc. v. Hegar. Taxpayers should consider the new rule and potentially filing refund claims.

Read Eversheds Sutherland’s description of the Comptroller’s now-adopted amendments here. Eversheds Sutherland attorneys will continue to monitor any developments.

48 Tex. Reg. 200 (January 20, 2023) available at:

https://www.sos.state.tx.us/texreg/pdf/backview/0120/0120prop.pdf.

Meet our March SALT Pets of the Month, 12-year-old Sunny and 5-year-old Lily! These lovely ladies belong to David Weiner, Vice President and Tax Counsel for A&E Television Networks. 

Sunny and Lily were both rescued as adult pups and were happy to join David’s family in 2017 and 2020. Sunny, whose coat is an adorable wiry mix of orange and white, and Lily, who has black and white markings, are both mixed breeds and around 50 pounds each. They get along like two peas in a pod!

Sunny was found in Louisiana, which must have been hard for her since she hates the heat.  Sunny wants to stay outside all day (and night!) during the winter. The colder the temps, the better! Prior to the pandemic, Sunny volunteered at schools and government offices as a certified therapy dog with David’s wife, Paula. She offered emotional support and stress relief.

Meanwhile, Lily was an owner surrender from South Carolina. Prior to her adoption, Lily had not spent much time indoors, but she has quickly gotten used to the good life, especially time on the couch. Lily can often be seen lounging on David’s bed, as well.

Around December 2021, Sunny began dragging one of her back legs. She was diagnosed with degenerative myelopathy, which is a genetic condition that affects dogs’ spinal cords. It causes progressive loss of coordination and weakness, but thankfully, the condition has not spread to her front legs. Sunny has adapted very well and uses a dog wheelchair outside. Neighbors and acquaintances are very supportive of her and often stop to inquire about her health or just give her scratches! 

The girls are beloved by David and Paula’s children Sabrina, age 17, and Cole, age 13.

We’re so happy to welcome them to the SALT Pet of the Month family!