Shaking things up in state and local tax
Shaking things up in state and local tax
By Douglas Upton and Andrew Appleby
The New Jersey Tax Court determined that credit card issuers must source to New Jersey all of their interest and interchange fee receipts, and half of their credit card service fees, from New Jersey accountholders. The Tax Court concluded that the Division of Taxation’s regulations required the taxpayers to…
By Zachary Atkins and Open Weaver Banks
The New Jersey Tax Court held that apportioning all of a company’s income to New Jersey for corporate business tax purposes, even with the allowance of a credit for taxes paid to separate-return states, failed to fairly reflect the company’s business activities in New Jersey. The court also…
By Charles Capouet and Maria Todorova
The Franklin County Circuit Court held that Netflix’s subscription-based streaming video service was not subject to Kentucky’s gross revenues tax, excise tax and school tax (telecommunications taxes) imposed on “multichannel video programming service” (MVPS). Under Kentucky law, MVPS is programming “provided by or generally considered comparable to programming provided…
By Chris Mehrmann and Charlie Kearns
A New Mexico Taxation and Revenue Department administrative hearing officer found that a seller could not use equitable recoupment as a defense to offset gross receipts (sales) tax assessed on its sales of software licenses. In support of its equitable recoupment argument, the seller maintained that third-party lenders that…
By Nicole Boutros and Marc Simonetti
The Illinois Appellate Court held that a defendant out-of-state retailer was not liable under the state’s False Claims Act because it conducted a good faith inquiry into its use tax collection obligations for both its Internet and catalog sales. The defendant had franchisees operating in Illinois and sold products…
By Alla Raykin and Tim Gustafson
The Colorado Department of Revenue determined that energy purchased by a television broadcaster is exempt from sales tax when used to transmit broadcasts, but taxable when used for other office purposes. Colorado imposes sales tax on electricity and natural gas for commercial consumption. The Department analyzed possible exemptions applicable…
The Louisiana Department of Revenue has proposed a new regulation expansively interpreting Louisiana’s recently enacted related party expense addback statute.
…
By Ted Friedman and Madison Barnett
The Maryland Tax Court held that the Comptroller’s policy of not allowing carryforwards of unsubtracted exempt federal obligation interest violates the Supremacy Clause of the U.S. Constitution. Under the Comptroller’s policy, interest earned on Maryland obligations is subtracted in its entirety when computing Maryland taxable income. As a result…
Sutherland SALT releases the third edition of its SALT Scoreboard, a quarterly publication that tracks significant state tax litigation and controversy developments and tallies the results of taxpayer wins and losses across the country. Our quarterly publication features Sutherland’s observations regarding important state tax decisions and identifies trends by issue, state and forum as they…
By Chelsea Marmor and Andrew Appleby
The Kentucky Court of Appeals held that a Kentucky statute, which retroactively reduced vendors’ 1% deduction of the sales tax collected and remitted to Kentucky to $1,500 in any monthly reporting period, did not violate the Kentucky Constitution. Wal-Mart argued that the statute violated the Kentucky Constitution because the…
