Shaking things up in state and local tax
Shaking things up in state and local tax
By Jessica Eisenmenger and Leah Robinson
The Alabama Tax Tribunal ruled that freight charges paid by the seller but passed through on an invoice to the customer are not subject to sales tax. Alabama law exempts shipping and freight charges “paid by the purchaser” from sales tax. Chief Tax Tribunal Judge Bill Thompson ruled that such…
The Multistate Tax Commission advanced several items of interest during its annual fall meetings held in Charleston, South Carolina, this week, including the creation of a new committee to continue gathering support for its transfer pricing program.
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By Charles Capouet and Open Weaver Banks
The Alabama Department of Revenue has proposed an amendment to the state’s rental tax regulation. If finalized, the regulation would tax the rental of “digital transmissions,” such as “on-demand” movies, television programs, streaming video, streaming audio and other similar programs, regardless of the method of transmission or the…
A day after issuing its decision in Direct Marketing Ass’n v. Brohl, the U.S. Supreme Court decided Alabama Department of Revenue v. CSX Transportation, Inc. The Court held that a rail carrier can show discrimination under subsection (b)(4) of the Railroad Revitalization and Regulatory Reform Act of 1976 by demonstrating that it is…
By Stephen Burroughs and Andrew Appleby
The Alabama Court of Civil Appeals ruled in favor of an out-of-state life insurance company regarding the calculation of its Alabama net worth tax – the Business Privilege Tax (BPT). The BPT requires an insurance company to calculate its Alabama net worth based on the ratio its Alabama premium…
On December 9, the U.S. Supreme Court heard oral arguments in the last of three state and local tax cases that it accepted this term – Alabama Department of Revenue v. CSX Transportation, Inc. (CSX II), a case that had previously been before the Supreme Court. CSX Transportation…
Alabama ALJ Bill Thompson voided a local sales tax assessment asserted against an electronics retailer because the retailer did not have a physical presence in the taxing jurisdictions. Although the retailer sent repairmen into the local taxing jurisdictions, the retailer did not have a physical store or sales representatives in the localities, and therefore lacked…
In the tax world, we are frequently reminded that procedure is important. The Alabama Supreme Court drove this point home in its decision dismissing a $1 million local use tax assessment because the final assessment was signature stamped rather than being signed by hand. City of Huntsville v. Colsa Corp., No. 1091797, 2011…
In an unusual twist of legislative procedure, the Alabama legislature passed a joint resolution (SJR 4) vetoing an Alabama Department of Revenue (Department) regulation that disallowed a Business Privilege Tax (BPT) deduction for equity investments in subsidiaries.
The saga of SJR 4 relates to AT&T Corp. v. Surtees, 953 So. 2d 1240 (Ala. Civ. App. 2006). In AT&T, the Alabama Court of Appeals held that the BPT deduction for investments in subsidiaries found in Ala. Code § 40-14A-23(g)(1) was facially unconstitutional under the Commerce Clause, because the deduction was limited to only those subsidiaries doing business in Alabama. The court did not order the deduction to be stricken, but rather remanded the case to the trial court to afford the Department an opportunity to offer a permissible justification for the discrimination. The parties ultimately settled before the court entered judgment on the remedy issue.Continue Reading Just Say No: Alabama Legislature Vetoes Department of Revenue’s BPT Regulation
The U.S. Supreme Court reversed a U.S. Court of Appeals in holding that a railroad may bring suit to challenge the validity of a discriminatory Alabama sales tax exemption. CSX Transp., Inc. v. Ala. Dep’t of Revenue, No. 09-520, 2011 WL 588790 (U.S. Feb. 22, 2011). Alabama imposes its sales and use tax on the use of diesel fuel for off-road use, including fuel used by railroads, but provides exemptions for fuel used by railroads’ direct competitors, commercial truckers and interstate water carriers. CSX sued to challenge the discriminatory scheme under the Railroad Revitalization and Regulatory Reform Act of 1976 (4-R Act).Continue Reading Discrimination Train Has Left the Station: U.S. Supreme Court Remands Alabama Railroad Case
