On April 25, the Washington Court of Appeals held that a company that arranges and manages displays for installation and placement in multiple retail brands’ stores through subcontractors was subject to the state’s retailing business and occupation tax (the “B&O tax”) and retail sales tax as a retailer making retail sales, rather than a provider of “services and other activities.” According to the court, the company made “retail sales” by arranging and managing such “roll-out” work in Washington.

The company, Dynamic Resources, Inc. (DRI), performs services for various brands and retailers. When one of its clients has a marketing campaign, DRI arranges and manages the installation of visual displays, window displays, branding elements, vinyl decals and in-store marketing promotions in the brands’ locations throughout the country by subcontracting with its network of contractors.

DRI argued that its visual display work did not meet the definition of a “retail sale” and instead fell within the catchall B&O tax classification for “services and other activities” subject to different tax rate and sourcing rules. The court disagreed and held that DRI’s business activities constituted “retail sales” based on a plain reading of the statute. According to the court, DRI: (1) “clearly ‘installed’ personal property performing its roll-out work,” and (2) made statutory “retail sales” in connection with its visual display work by decorating “‘new or existing buildings or other structures under, upon, or above real property.’”

Dynamic Res., Inc. v. Dep’t of Revenue, No. 83281-6-I, Wash. Ct. App. (Apr. 25, 2022).

In this episode of the SALT Shaker Podcast policy series, Eversheds Sutherland Partner and host Nikki Dobay is joined again by Carol Portman, President of the Taxpayers’ Federation of Illinois, for a review of the 2022 Illinois legislative session, which adjourned earlier this year. (You can catch up on their discussion of the 2021 session here!)

Carol explains that while there weren’t any large scale tax measures during the 2022 session, there were several smaller tax breaks aimed at individuals and a few other smaller items to have on your radar. She also provides some updates from the state’s Department of Revenue and opines on the state’s upcoming election.

They conclude with Nikki’s surprise nontax question for the week –  if you were a late night talk show host, who would you invite as your first guest or musical appearance?

The Eversheds Sutherland State and Local Tax 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 state and local tax 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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The Mississippi Department of Revenue withdrew its proposed regulation which sought to expand the state’s sales tax to apply to cloud computing. The proposed regulation amendments defined taxable cloud computing to include software as a service, platform as a service, and infrastructure as a service. Despite the proposed regulation’s withdrawal, there may still be future changes to Mississippi’s sales tax on software, as earlier this year, the Governor signed a bill creating a study committee to analyze the state’s taxation of remote and internet-based computer software products and services.

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: In the first edition of the Eversheds Sutherland SALT Scoreboard for 2022, taxpayers prevailed in how many significant cases?

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!

Meet Sora! Our May Pet of the Month is a delightful, seven-year-old rescue pup belonging to Marji Gordon-Brown, Vice President and Associate Tax Counsel at MacAndrews & Forbes. Marji is also the senior vice president of TEI’s New York Chapter.

While Sora’s exact breed is unknown, we do know he’s pup-dorable. The shelter gave him his name, and Marji’s best guess is that he’s a shepherd and beagle mix.

In addition to being at least 60 pounds, he loves to eat just about anything, which makes walking him in his native Manhattan – filled with outdoor dining – a bit of a challenge.

He especially loves snacks with a crunch, like apples and carrots. According to Marji, as soon as he hears the sound of a knife hitting the cutting board, he runs into the kitchen to see if he can get a nibble!

Beyond his daily trips to the dog park, he loves to sunbathe, howl at passing sirens and play with any toys that squeak.

We’re so glad Sora has joined our Pet of the Month club!

 

In this episode of the SALT Shaker Podcast, Eversheds Sutherland Associate Jeremy Gove speaks with Partner Tim Gustafson and Associate Annie Rothschild regarding California procedure and strategy considerations associated with the different options for challenging corporate tax deficiency assessments.

Tim and Annie recently authored an article in Tax Notes State addressing certain benefits and potential drawbacks of bringing a matter before the relatively new Office of Tax Appeals versus proceeding directly to superior court via a refund action. 

Finally, this week, Jeremy’s overrated/underrated question deals with seltzer water, or as his daughter calls it, “spicy water.”

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: The Wisconsin Department of Revenue recently published updated guidance that states that marketplace providers are responsible for the collection and remittance of what Wisconsin 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!

The Massachusetts Supreme Judicial Court has accepted a direct appeal from an internet retailer contesting the Department’s position that the in-state presence of cookies and apps were sufficient to satisfy the physical presence nexus standards in place prior to the US Supreme Court’s decision in South Dakota v. Wayfair, Inc. The Department assessed use tax on the basis that the cookies and apps placed on the devices of Massachusetts-based consumers was sufficient to create physical presence nexus. The Massachusetts Appellate Tax Board disagreed, determining cookies and apps did not satisfy the physical presence standard for pre-Wayfair periods, while also rejecting the Department’s position that Wayfair should be applied retroactively. Despite its victory at the lower level, the taxpayer initiated the direct appeal to the Supreme Judicial Court once the Department filed a notice of appeal to the Massachusetts court of appeals, an intermediate appellate court.

On May 16, Eversheds Sutherland Partner Nikki Dobay will present Basic Unitary/Filing Methods and State and Local Practice Overview during COST’s SALT Basics School in Atlanta, GA. For more information and to register, click here.

On May 17, Eversheds Sutherland attorneys Maria Todorova and Justin Brown will present The Corporate Income Tax Base and Advanced Domestic State Adjustments during COST’s Intermediate/Advanced State Income Tax School in Atlanta, GA. Nikki Dobay will present Gross Receipts Taxes/Modified Gross Receipts Taxes. For more information and to register, click here.

On May 18, Eversheds Sutherland Partner Jonathan Feldman will present Manufacturing/Construction Sales & Use Tax Issues during COST’s Intermediate/Advanced Sales & Use Tax School in Atlanta, GA. For more information and to register, click here.

In addition, the Tax Practice Group is sponsoring TEI Region 10’s 42nd Annual Tax Conference in La Jolla, CA from May 16 to 18. Speakers and topics include:

  • Diversity and Inclusion – Maria Todorova
  • Audit Panel – Jeff Friedman
  • M&A Panel – Maria Todorova

For more information and to register, click here.

Eversheds Sutherland Partner Charlie Kearns will present a Remote Work session during the National Conference of State Legislatures in Seattle, WA on May 18.

Finally, several members of the SALT team will present during the TEI Los Angeles’ Chapter SALT seminar in Hawthorne, CA on May 19. Speakers and topics include:

  • 2022 Litigation Round up – Jeff Friedman and Michele Borens
  • 2022 SALT Legislative Outlook – Nikki Dobay and John Ormonde
  • Local Taxes: Developments in Increasingly-Aggressive Local Taxation – Nikki Dobay and Michele Borens
  • Combined Reporting – 80/20’s and Other Issues – Jeff Friedman and Cyavash Ahmadi
  • Taxation of Digital Goods and Services – Jeff Friedman and Michele Borens

To register, click here.

In this episode of the SALT Shaker Podcast policy series, host and Eversheds Sutherland Partner Nikki Dobay welcomes back Stephanie Do, Senior Tax Counsel for the Council On State Taxation (COST), for a discussion about two recent proposals to expand the False Claims Acts in Connecticut and New York.

As our listeners know, most states have a false claims act that is modeled after the federal False Claims Act, which includes a bar against tax claims. Stephanie provides an overview of False Claims Act presence in the states and the potential for expansion in some states to include tax matters. Stephanie and Nikki discuss a Connecticut bill from this year’s session that sought to expand the state’s False Claims Act and how the bill was stopped (for now).

Nikki and Stephanie then discuss how these expansions fit into the larger policy space, and how False Claims Act expansion is faring in New York in this legislative session.

Nikki’s surprise non-tax question this week involves Mother’s Day – what is your favorite Mother’s Day tradition?

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. Partner Nikki Dobay, who has an extensive background in tax policy, hosts this series, which is focused on state and local tax policy issues.

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: 

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