Policy and Legislation

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On February 11, the United States Senate approved a permanent extension of the Internet Tax Freedom Act (ITFA), which previously passed the House of Representatives on December 15, 2015. Additionally, ITFA’s Grandfather Clause, which allows certain states to continue to tax Internet access, is phased out. President Obama is expected to sign the permanent extension …

By Evan Hamme and Marc Simonetti

The Texas Court of Appeals held that sovereign immunity bars Machete’s Chop Shop’s declaratory judgment action because Machete failed to plead that the Texas Film Commission acted ultra vires when it denied Machete’s grant application for the 2010 film, Machete. Machete alleged that the Texas Film Commission lacked authority…

By Chris Mehrmann and Scott Wright

The Alabama Tax Tribunal invalidated a regulation requiring a direct pay permit holder, Tyson Chicken, Inc. (Tyson), to purchase all items tax-free, finding that the regulation was both unreasonable and unduly burdensome. Although Tyson purchased most items tax-free using its direct pay permit, Tyson employees used corporate credit or…

By Jessica Eisenmenger and Amy Nogid

The West Virginia Office of Tax Appeals (OTA) upheld a sales tax assessment against an out-of-state company that provided taxable outside maintenance services such as snow removal and window cleaning in the state via independent contractors. The Administrative Law Judge reasoned that since “nothing happens” unless the independent contractors…

By Stephanie Do and Carley Roberts

The U.S. Court of Appeals for the Eleventh Circuit affirmed dismissal of a taxpayer’s complaint, arising from the Alabama Department of Revenue’s assessment and collection of state income tax, for lack of subject matter jurisdiction under the Tax Injunction Act (TIA). The court held that the TIA prohibited…

By Olga Goldberg and Leah Robinson

The West Virginia Office of Tax Appeals (OTA) ruled in favor of a rail transportation company subject to use tax on fuel used in West Virginia because the West Virginia State Tax Department (Department) incorrectly applied the credit against use tax for sales tax paid to “another state.” First…

By Chris Mehrmann and Charlie Kearns

The Tennessee Department of Revenue has issued guidance explaining that the retail sale of, use of, or subscription to a computer software maintenance contract is subject to sales and use tax when: (1) the maintenance contract is sold as part of a taxable sale of computer software; (2) the…

By Elizabeth Cha and Charlie Kearns

Effective for tax years beginning on or after January 5, 2016, the Illinois Department of Revenue adopted amendments to 86 Ill. Adm. Code Sec. 100.3380 that establish special rules for the inclusion in the Illinois sales factor of certain (1) income, gains and losses from hedging transactions; and (2)…

By Jonathan Feldman and Hanish Patel

The Georgia Department of Revenue issued a proposed regulation amending the use of direct pay permits for state and local sales and use taxes. The proposed regulation would cause all current permits to expire on December 31, 2016, and require all current holders to reapply and agree to certain…