On July 17, 2018, the Wisconsin Court of Appeals held that a taxpayer’s services qualified as taxable “laundry services” and were subject to Wisconsin sales tax. The taxpayer entered into service agreements with clients and provided them contract cleaning services. The taxpayer would hire its clients’ existing laundry department workforces as employees, who would then
appeal
Louisiana’s “Quest” for Market-Based Sourcing Denied: Appellate Court Holds Medical Tests Performed in Texas Are Not Sourced to Louisiana
By Nick Kump and Scott Wright
The Louisiana Court of Appeal held that income derived from diagnostic testing of Louisiana patients’ blood samples and other medical specimens performed in Texas should be sourced to Texas for corporate income tax apportionment purposes. The taxpayer, which operates a multistate network of laboratories where it performs medically prescribed…
Call an Ambulance: Illinois Nonprofit Hospital Exemption Ruled Unconstitutional
By Mike Kerman and Maria Todorova
The Illinois Appellate Court held that a property tax exemption for nonprofit hospitals which provided certain services or subsidies equal in value to their estimated property tax liabilities was facially unconstitutional because it did not require exclusive charitable use of the property, as prescribed under the Illinois Constitution. Carle …
Second Circuit Sides with Taxpayers in Privilege Dispute Over Accounting Firm Memoranda
By Zachary Atkins and Marc Simonetti
The U.S. Court of Appeals for the Second Circuit held that the attorney-client privilege and work-product doctrine protected legal memoranda prepared by an accounting firm that were disclosed to third parties. The Schaeffler Group sought to refinance its acquisition debt held by a consortium of banks and restructure its…
“Please Hang Up and Try Again”: Walkie-Talkie Services Are Not “Telephony” Subject to New York State’s Telecommunications Excise Tax
By Evan Hamme and Charlie Kearns
A New York State Division of Tax Appeals Administrative Law Judge (ALJ) determined that two-way radio communications services, or walkie-talkie services, are not telephone services subject to New York State’s telecommunications excise tax imposed under Tax Law § 186-e (186-e Tax). The petitioner uses specialized equipment or “repeaters” to…
That Was Fast: Michigan Court of Appeals Upholds Retroactive Repeal of Compact
By Jonathan Feldman and Stephen Burroughs
A mere 28 days after oral argument, a three-judge panel of the Michigan Court of Appeals unanimously upheld a Court of Claims decision that sanctioned the Michigan Legislature’s retroactive withdrawal from the Multistate Tax Compact in 2014 PA 282, by ruling for the Michigan Department of Treasury in the…
No Touching: Absent Physical Contacts with Customers, Commissions from Phone and Internet Broker Deals Sourced to Employees’ Location in Seattle Based on Costs of Performance
By Mike Kerman and Open Weaver Banks
The Washington Court of Appeals held that for local business and occupation (B&O) tax purposes, a securities broker with employees in its Seattle office must source to Seattle the receipts from commissions for services performed by the employees via phone and Internet. Under the city ordinance implementing the…
Eleventh Circuit Invalidates Florida’s Rental Tax but Upholds Utility Tax on Electricity Delivered to Tribal Lands
By Michael Penza and Amy Nogid
The U.S. Court of Appeals for the Eleventh Circuit invalidated Florida’s rental tax imposed on the Seminole Tribe of Florida’s (the Tribe) leases of tribal land to non-Indian corporations, but upheld Florida’s utility tax collected from the Tribe.
The Tribe operated casinos on two of its reservations; non-Indian corporations…
Hog Wild: In Harley-Davidson, California Court of Appeal Finds Discrimination, Affirms Nexus
By Michael Penza and Andrew Appleby
The California Court of Appeal held that California’s disparate treatment of intrastate and interstate unitary businesses discriminated against interstate commerce. California requires taxpayers engaged in a unitary business within and without California to calculate their taxable income using combined reporting, but provides taxpayers engaged in a unitary business wholly…
A Proposed Assessment Is Not an Assessment for Statute of Limitations Purposes in Florida
By Zachary T. Atkins and Open Weaver Banks
In a closely followed case, a Florida district court of appeal held that a proposed assessment is not an assessment for statute of limitations purposes. The Florida Department of Revenue generally has three years to “determine and assess” any tax, penalty or interest due. The Department has…