In Guild Mortgage Company v. Washington Department of Revenue, the Washington Board of Tax Appeals considered whether certain fees associated with mortgage sales – guaranty fees, loan-level price adjustments (LLPAs), and lender credits – should be included in the taxpayer’s gross income for purposes of the state’s business and occupation (B&O) tax. 

The taxpayer originated residential mortgage loans and sold most to government-sponsored enterprises (GSEs) such as Fannie Mae and Freddie Mac, which securitize the loans into mortgage-backed securities. To participate in the GSE programs, the taxpayer paid guaranty fees and LLPAs. The taxpayer also sometimes provides lender-paid credits to cover borrower closing costs in exchange for a higher interest rate. Following an audit for 2013–2017, the Department assessed B&O tax on all three of these amounts.

The Board held Guaranty fees and LLPAs are not adjustments to the selling price but are expenses incurred to sell loans to GSEs and thus cannot be deducted under Washington’s B&O tax statute. However, the Board agreed with the taxpayer that lender-paid credits were not taxable because they were a capital investment in the loan.

Guild Mortgage Company v. Washington Department of Revenue, Washington Board of Tax Appeals (Docket No. 20-122, Aug. 29, 2025).

The taxpayers, originally residing in New York, were issued a tax assessment for unpaid income tax but they claimed they moved out of the state and settled in Florida in late 2018 (as part of their retirement plan) while still maintaining living quarters in New York. The taxpayer argued that they had changed their domicile to Florida and as support they presented evidence showing that, among other things, they registered as Florida voters, signed a document declaring themselves domiciled in Florida, obtained Florida drivers’ licenses, registered their vehicles in Florida, joined a country club in Florida, and became involved in their Florida condo board. The taxpayers also spent most of the days during the winter months in Florida. However, the taxpayers still maintained connections with New York including having two country club memberships, spending a significant amount of days in New York during the summer months, and one of the taxpayers still owned and collected a salary from a business located in New York. In 2018, the taxpayers spent 132 days in Florida, 195 days in New York (notably in excess of the 183-day statutory residency test), and 38 days in other locations. While in 2019, the taxpayers spent 155 days in Florida, 170 days in New York, and 40 days in other locations.

The Tax Appeals Tribunal upheld the assessment, agreeing with the Division of Taxation that the taxpayers had not completed their change of domicile during the tax periods at issue. The Tribunal noted that “formal declarations of domicile, such as voter registration or motor vehicle registration, have lost their importance in recent years as courts have recognized their self-serving nature[.]” The Tribunal found that the taxpayers continued to have “substantial ties” to their New York businesses and spent a significant amount of time, including holidays, at their “substantial property” in New York which they previously used as their main home in prior years. The Tribunal concluded that, based on this evidence, the taxpayers had “failed to established by clear and convincing evidence” that they had changed their domicile to Florida during the tax periods at issue.

Matter of the Petition of John J. Hoff and Kathleen Ocorr-Hoff, DTA No. 850209 (Oct. 9, 2025).

This week, members of our SALT team are pleased to join the NYU School of Professional Studies’ 44th Institute on State and Local Taxation, held December 8-9 in New York City. The Institute will provide insightful updates, practical advice, and in-depth analysis of the latest developments and current issues in state and local taxation. The full agenda can be found here.

Sessions featuring members of our team include:

  • Constitutional Limitations on State Taxation – Jeff Friedman
  • The Top Ten (Non-Constitutional) Cases – Maria Todorova
  • TaxTok – A Jurisdictional Tour – Jeremy Gove

Eversheds Sutherland is a proud sponsor of the Institute on State and Local Taxation. We hope to see you there!

Our December SALT Pets of the Month are one stylish flock! This feathered family, belonging to Partner Todd Betor, was inspired by a touch of royalty. After binge-watching With Love, Meghan, Todd’s wife, Michelle, decided it was time to make her backyard chicken coop dream a reality.

The first step? Designing a home fit for the flock. With help from a local company, the Betors created a custom-built coop featuring a Dutch door, an automatic sleeping-area door, and even a rainwater collection system for the flock’s water bar. It’s as elegant as it is functional.

For the Betor family, these chickens are a source of calm and connection. Todd and Michelle’s kids love greeting their feathered friends each morning, and with three of the hens now laying eggs, farm-fresh breakfasts have become commonplace in their house.

Meet the Nantucket-inspired flock:

  • Nantucket Nancy
  • Whaling Willow
  • Harbor Henrietta
  • Sconset Sally
  • Cliffside Clara
  • Grey Lady

From their chic coop to their charming names, Todd and Michelle’s chickens remind us that joy often comes with feathers!

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 legislature of which midwestern state recently proposed a sales and use tax exemption for nuclear fusion technology projects?

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 week, SALT Partners Michele Borens, Jeff Friedman and Ted Friedman look forward to joining the speaker lineup of COST’s Pacific Northwest Regional State Tax Seminar in Redmond, WA.

Their panels will cover tax cases, issues and policy matters to watch, as well as an update on the taxation of digital goods and services.

Learn more and register 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: Which state’s governor is weighing a special session to accelerate cuts to personal income tax rates?

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 is the third edition of the Eversheds Sutherland SALT Scoreboard for 2025. Since 2016, we have tallied the results of significant taxpayer wins and losses and analyzed those results.

This edition includes developments in state and local False Claims Acts, corporate income tax apportionment, and manufacturing exemptions. We also spotlight a couple of recent decisions on digital taxation.

Dive into the Eversheds Sutherland SALT Scoreboard for the third quarter of 2025 now!

In this installment of Across State Lines in Tax Notes State, Eversheds Sutherland Senior Counsel Eric Coffill interviews Shane Hofeling, now chief counsel of the California Franchise Tax Board’s Technical Resources Bureau.

In their conversation, Shane shares insights on his vision for the Legal Division, the evolving role of artificial intelligence at the FTB, collaboration between Legal and Audit, the impact of federal changes on state tax administration, and ongoing efforts to improve transparency, customer service and operational efficiency within California’s Franchise Tax Board.

Read the full article here.

In this episode of the SALT Shaker Podcast, SALT Counsel Jeremy Gove and Chelsea Marmor dive into the nuanced world of state and local tax penalties.

They explore why penalty abatement standards, such as “reasonable cause” and “ordinary care,” remain ambiguous despite the frequent appearance of penalties in tax assessments. With limited statutory and case law guidance, these standards often leave taxpayers navigating uncertainty.

Their discussion highlights:

  • New York’s penalty framework and how it compares to other states
  • Practical defenses for abating penalties, including their self-coined “reliance plus” standard
  • The importance of contemporaneous documentation in supporting taxpayer positions

Ultimately, Jeremy and Chelsea underscore the highly technical and interpretive nature of penalty imposition and abatement. For a deeper dive into this topic, read their article in Tax Notes State.

This week’s overrated/underrated segment takes a seasonal turn: Is turkey really the star of Thanksgiving?

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

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