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 a recently-released fact sheet from the Minnesota Department of Revenue, it explains how to calculate sales tax when the price of an item is affected by which five things?

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 New York Division of Tax Appeals determined that an online loan marketplace was not a taxable information service. The taxpayer operates an online loan marketplace where it connects and matches prospective borrowers seeking loans (and other credit-based products) with lenders that are seeking qualified borrowers. The taxpayer generated revenue through agreements with each lender upfront matching fees and/or closed loan fees. The Department assessed the taxpayer for sales tax, asserting that its receipts were taxable information service, which requires the primary function be the business of furnishing information, including collecting, compiling, or analyzing information. The ALJ determined that the taxpayer’s primary function was not a taxable information service, but the facilitation of its customers writing loans to prospective borrowers. The ALJ concluded that the primary function of the service, and not the means of effectuating the service, determine its taxability as an information service.

The Wisconsin Tax Appeals Commission sided with the Department of Revenue, ruling that American Honda Motor Co.’s sale of environmental credits generated apportionable income for corporate income and franchise tax purposes. American Honda bought vehicles from related companies and resold them to car dealerships and other retailers in the U.S.

When American Honda sold its environmental credits to other automakers, it reported the sale proceeds as non-apportionable income, sourced outside of Wisconsin. In analyzing whether the sales generated apportionable income, the Commission explained that under Wisconsin law, the income is apportionable if it is unitary income, operational income, or other income with a taxable presence in the state.  After determining that the income did not have a taxable presence in the state, the Commission found that the sales generated operational income because the credits were integral to American Honda’s unitary business and did not serve an investment function.  The Commission reasoned that the company earned the credits through its manufacture and distribution of fuel-efficient and low-polluting vehicles, which is the combined group’s unitary business activity. Further, if American Honda needed to use the credits in the future, they would be integral operational assets that would save the company the expense of meeting fuel efficiency and emissions standards. As such, the Commission concluded that the credits are integral to the company’s automating operations.

Next, the Commission ruled that American Honda’s income from selling the credits was also unitary income. The company’s activities to comply with federal environmental standards, which generated the credits, were unitary because they are “very much related” to the automaking business and benefit the combined group, which could use or sell the credits. The Commission noted that these compliance activities “are clearly functionally integrated” with the vehicle manufacturing activities to the benefit of the group. Because the unitary enterprise generates the credits and the sale of credits requires the coordination of company unitary resources, the sale of the credits generated apportionable income.

American Honda Motor Co., Inc. v. Wis. Dept. Rev., Wisconsin Tax Appeals Commission Dkt. No. 19-I-227 (Nov. 29, 2021)

Happy holidays from the very dapper Doug E. Fresh!

Our December SALT Pet of the Month is a terrier mix belonging to Meredith Beeson, Director of State Government Affairs with the Global Business Alliance (GBA). She’s also a frequent guest on our SALT Shaker Podcast – check out her episodes here!

Meredith adopted her furry family member from a rural dog rescue in February of this year, and decided the simple name of Doug didn’t quite fit his big personality. So, she decided to lengthen it to Doug E. Fresh, after the famous 80s rapper.

The nearly two-year-old pup loves chicken roasters, and really anything meaty, and enjoys walking down by the river. He also can’t miss an opportunity to chase critters he comes across, as well as take many trips to the dog park.

When he isn’t finding rambunctious fun outdoors, he can be known to steal a sock or two – and carry them around in triumph!

However, he’s most well-known around his house for his love of belly rubs and snuggles, and pulling the stuffing out of his toys. His latest victims include a lamb, gumby and a gator, so he might be on the naughty list this year!

We’re thrilled to feature Doug E. Fresh this month. Welcome to the SALT Pet of the Month family!

In this episode of the SALT Shaker Podcast policy series, host and Eversheds Sutherland Partner Nikki Dobay welcomes back Doug Lindholm, President and Executive Director of the Council On State Taxation (COST) and Morgan Scarboro, Manager of Tax Policy and Economics at MultiState.

Together, they discuss the top SALT policy issues of 2021, and whether they’re here to stay for 2022. The conversation covers a whole host of issues—from digital advertising taxes and the Maryland litigation to state tax revenue cuts to whether there will be a renewed interest in GILTI by the states in 2022. Finally, they conclude with the surprise nontax question – if you were Santa Claus, what kind of cookie would you want left out for you?

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.

 

 

 

 

 

 

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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: Which New York Division of Tax Appeals determination held that a California-based company’s sale of memberships to access its online medical technology platform was the provision of a nontaxable service rather than a taxable sale of prewritten software?

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 Minnesota Department of Revenue updated its fact sheet relating to calculating sales tax for certain discounts, including online deals and cryptocurrency. Specifically, for “Daily Deal Website Vouchers and Coupons,” the fact sheet states that the purchase of the discount voucher is not taxable, but once redeemed, the retailer should charge tax on the amount the customer paid for the discount voucher, if known. If not known, the retailer should charge tax on the discount voucher’s face value. Additionally, gift cards and cryptocurrency are a form of currency, and should be treated as cash for sales tax purposes.

On December 13 and 14, Eversheds Sutherland Partners Michele Borens, Nikki Dobay and Jeff Friedman will present webinars during the 40th NYU School of Professional Studies’ Institute on State and Local Taxation. Register here.

Speakers and topics include:

  • Taxation of Digital Information and Products – Partner Michele Borens – Monday, December 13
  • Overview and Preview of Federal Constitutional Issues – Partner Jeff Friedman – Monday, December 13
  • Local Taxes – Partner Nikki Dobay – Tuesday, December 14
In addition, on December 14, Eversheds Sutherland Associate Justin Brown will co-present a webinar for Strafford Publications, covering the critical sales and use, real estate transfer and other transaction taxes arising from a merger and acquisition event. Register here. 

Eversheds Sutherland is a proud sponsor of the SALT Session during the 58th Annual TEI New York Chapter Tax Symposium. Partners Jeff Friedman and Charlie Kearns will present, focusing on the state and local tax implications of remote working. Register here.

Finally, Eversheds Sutherland Counsel Michael Hilkin will help present a webcast for the New Jersey State Bar Association, covering sales and use taxes, as well as New Jersey tax registration. Register here.

 

In this episode of the SALT Shaker Podcast, host and Eversheds Sutherland Associate Jeremy Gove rolls out a new discussion format—East/West/Middle. Joining Jeremy for this discussion are Partners Nikki Dobay and Breen Schiller, and Counsel Michael Hilkin, and the four discuss the similarities and differences of protesting an assessment in New York (East), Oregon (West) and Illinois (Middle). Together, the group discusses the forum, the process, pay-to-play requirements and much, much more.

Finally, they conclude with Jeremy’s always engaging overrated/underrated? This week, they tackle radio stations that play holiday music 24/7 starting after Thanksgiving.

Questions or comments? Email SALTonline@eversheds-sutherland.com.

 

 

 

 

 

 

 

 

 

 

 

 

 

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 recently published private letter ruling concluded that a taxpayer’s service via a Software as a Service (SaaS) model was not a transfer or sale of tangible personal property, and therefore not a taxable transaction?

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!