Policy and Legislation

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Yesterday, the U.S. Court of Appeals for the Tenth Circuit issued its opinion in Direct Marketing Association v. Brohl, reversing the district court’s order granting summary judgment. The Tenth Circuit held that Colorado’s notice and reporting requirements imposed on non-collecting retailers did not violate the dormant Commerce Clause because they neither discriminated against, nor …

By Stephen Burroughs and Tim Gustafson

The Massachusetts Supreme Judicial Court denied a freight company’s Commerce Clause challenge to the application of an unapportioned use tax on its vehicles purchased out-of-state but used in Massachusetts. The company used its trucks to deliver freight in multiple states, but the court upheld taxation of the vehicles’ full…

By Nicole Boutros and Jeff Friedman

The Director of the Arizona Department of Revenue affirmed an Administrative Law Judge determination that a taxpayer must pay the Transaction Privilege Tax on sales of access to the taxpayer’s subscription-based online research service. The Director reasoned that these sales were taxable as rentals of tangible personal property—and not…

By Zack Atkins and Eric Coffill

A Virginia trial court held that royalties paid to related members that are reported to, but not taxed by, other states do not qualify for the exception to the state’s corporate income tax addback statute. In granting summary judgment in favor of the Virginia Department of Taxation, the court…

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…