In this episode of the SALT Shaker Podcast policy series, Eversheds Sutherland Partner and host Nikki Dobay is rejoined by Morgan Scarboro, Senior Director of Tax Policy at MultiState.

Morgan reviews what needs to be on your radar for the upcoming fall elections and why there is such a focus on the elections’ outcome. They then get into the weeds of some specific state elections and how the elections may impact state tax legislation. In addition, they cover potential challenges on the state budget side.

Nikki’s surprise nontax question this week deals with honeymoons. If you were going on a honeymoon, where would you go, and why?

The Eversheds Sutherland SALT team has been engaged in state tax policy work for years, tracking tax legislation, helping clients gauge the impact of various proposals, drafting talking points and rewriting legislation. This series, which is focused on SALT policy issues, is hosted by Partner Nikki Dobay, who has an extensive background in tax policy.

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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Most decisions issued by the California Office of Tax Appeals involve small dollars, but these decisions can still shape precedent.

In this article for Bloomberg Tax, Eversheds Sutherland Senior Counsel Eric Coffill discusses Appeal of R. Sheward, which addresses the Franchise Tax Board’s legal authority to assess tax on unreported income based on an estimate of income and its unwillingness to follow its own regulations.

Read the full article here.

The Texas Comptroller published a private letter ruling concluding that subscriptions to online learning courses for academic subjects, professional topics, and vocational topics are not taxable. However, a company’s subscriptions for the “teacher plan,” which provides teachers lesson plans and other capabilities to integrate into their classrooms, are taxable as data processing. None of the company’s services constituted “information services,” because they do not gather, maintain, or compile information for its customers. The teacher plan was determined to be taxable data processing because the customizable lessons, instruction scheduling, and grade tracking “includes word processing, data entry, data retrieval, data search, information compilation. . . and other computerized data and information storage or manipulation.” Although the teacher plan includes the same elements as other nontaxable services, the teacher plan is sold for one lump sum charge and the taxable portion exceeds 5% of the total charge, thereby making the entire amount taxable. The Comptroller also determined that the taxpayer’s gathering and sale of information on prospective students to universities is a taxable information service. For any taxable information service or data processing, there is a 20% statutory exemption.

On July 1, 2022, the New York State Department of Taxation and Finance issued the third set of “final draft” regulations relating to the corporation franchise tax reform that took effect for tax years beginning on or after January 1, 2015. The third set of draft regulations relate to apportionment, and contain revisions to the apportionment rules that were last updated in 2019.  The first two sets of “final draft” regulations, which address all rules other than those regarding apportionment, were issued on April 29, 2022.

Read the full Legal Alert here.

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 Department of Revenue’s Administrative Review and Hearings Division recently ruled that a company’s account access services provided to credit unions constituted what type of taxable service?

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. Answers will be posted on Saturdays in our SALT Shaker Weekly Digest. Be sure to check back then!

A Posy of Pups! Meet Iris, a 14-week-old pup belonging to Justin Brown, a SALT associate in our Atlanta office. She joins big sister and previous Pet of the Month honoree, Daisy, in bringing plenty of cuteness to Justin’s home.

Justin recently rescued Iris from a local pet adoption agency after realizing Daisy would like to have a companion in the house. According to the adoption agency, Iris’ mom is a blue heeler mix and dad is a beagle, making for a perfectly adorable combination in Miss Iris.

Iris is still limited to puppy food and small training treats. However, lucky for Justin, she doesn’t seem to mind her meals and happily devours them, unlike her discerning big sister.

While eating seems to be no problem, Iris enjoys a few naughty habits, including leaving puppy tooth prints on everything in the house, especially wooden items such as window sills and furniture. She makes up for it by being surprisingly good on a leash, and has already enjoyed a few nice hikes with her dad and big sister.

Justin was initially worried about how Daisy would take to her little sister, but after about two days together at home, they have become best friends and wear each other out on a daily basis, roughhousing and chasing each other around the house and backyard.

Welcome to the SALT Pet of the Month club, sweet Iris!

 

Understanding—let alone navigating—the layers of bureaucracy is no small feat for taxpayers that seek to resolve a California tax controversy, whether through administrative protest and appeals processes or by means of settlement negotiations.

In many states, the counterpart from the department who handles a taxpayer’s protest or appeal also has authority to negotiate a settlement. Not so in California. Also, many states may issue a substantial assessment against a taxpayer and then settle for ten or twenty cents on the dollar during the administrative process. Again, not so in California.

In their article for Tax Executive, Eversheds Sutherland attorneys Tim Gustafson and Liz Cha provide a brief overview of the settlement process in California, followed by key considerations for taxpayers seeking to resolve matters through that process.

Read the full article here.

The Washington Department of Revenue issued an Interim Guidance Statement on the taxability of non-fungible tokens (NFTs). The guidance provides that the purchase of a standalone NFT is generally subject to sales tax as the sale of a digital product, and the seller of the NFT is also subject to the business and occupation (B&O) tax on the gross proceeds of the sale. Receipts from sales of NFTs are sourced according to the existing digital products sourcing hierarchy. Additionally, where a purchaser receives a NFT and another good and/or service, and the NFT is not the object of the customer’s purchase, Washington’s “bundled transaction” guidance controls whether the entire sales price is subject to tax or whether each item is taxed separately. Finally, the guidance will remain in effect until the Department develops and issues permanent and more comprehensive guidance regarding the taxability of NFTs.

In this episode of the SALT Shaker Podcast policy series, Eversheds Sutherland Partner and host Nikki Dobay welcomes Jéanne Rauch-Zender, Editor in Chief of Tax Notes State.

They cover the history of Tax Analysts, the publisher of Tax Notes State, and how it’s functioned as a critical platform in the tax industry for practitioners. Jéanne provides insight into her role, the purpose of the journal, how the advisory board assists with production and drives the conversation in tax. Jéanne then discusses the variety of topics the journal covers and her goal to provide a platform for all views to be shared.

They conclude with Nikki’s surprise nontax question for the week – what is your favorite or most interesting activity to do on the Fourth of July?

The Eversheds Sutherland SALT team has been engaged in state tax policy work for years, tracking tax legislation, helping clients gauge the impact of various proposals, drafting talking points and rewriting legislation. This series, which is focused on SALT policy issues, is hosted by Partner Nikki Dobay, who has an extensive background in tax policy.

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: How did the Wisconsin Tax Appeals Commission recently rule in determining whether an out-of-state travel agent that used independent travel consultants in Wisconsin was responsible for the Wisconsin franchise 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. Answers will be posted on Saturdays in our SALT Shaker Weekly Digest. Be sure to check back then!