New York Administrative Court (Again) Holds Royalties Received from Foreign Related Parties Cannot be Excluded from Taxable Income

On December 19, 2019, the New York Division of Tax Appeals (DTA) held that a corporate taxpayer must include royalties received from foreign affiliates in the computation of its entire net income for its 2007 through 2012

By Stephen Burroughs, Jonathan Feldman and Open Weaver Banks

In a significant taxpayer win, the Massachusetts Appellate Tax Board (ATB) held that intercompany interest payments from a wholly owned subsidiary to Massachusetts Mutual Life Insurance Company (MassMutual) were bona fide loans and were deductible for excise tax purposes. The subsidiary (HoldCo) was a holding

New Jersey’s related-member addback provision has five statutory exceptions, but only one is really worthy of comment. 

In their article for State Tax Notes, Sutherland attorneys Leah Robinson and Open Weaver Banks examine the exceptions to New Jersey’s related-member addback provision, focusing on the only exception successfully relied on in the state’s tax court—the

By Kathryn Pittman and Andrew Appleby

In a post-audit challenge by a taxpayer, the Virginia Tax Commissioner addressed entity classification, nexus and royalty add-back issues. The Commissioner found that the taxpayer did not provide sufficient evidence that its single member LLC was a disregarded entity or that certain entities were financial institutions. Turning to nexus

By Kathryn Pittman and Timothy Gustafson

The Virginia Tax Commissioner ruled a taxpayer’s licensing arrangements with a subsidiary intangible holding company (IHC) did not meet the unrelated party exception to Virginia’s intangible expense add-back statute. The taxpayer, a national operator and franchisor of fast food restaurants, created the IHC to hold its intangible property and

By Mary Alexander and Andrew Appleby

The Indiana Department of Revenue disallowed a taxpayer’s deduction for interest expenses accrued to a subsidiary because the Department considered the loan a sham. Unless eligible for an exemption under Ind. Code § 6-3-2-20(c), a taxpayer that is subject to Indiana’s adjusted gross income tax is required to add